EXHIBIT 10.1
TRANSFER AND SERVICING AGREEMENT
among
DISTRIBUTION FINANCIAL SERVICES RV TRUST 1999-3,
as Issuer,
DEUTSCHE RECREATIONAL ASSET FUNDING CORPORATION,
as Depositor
and
DEUTSCHE FINANCIAL SERVICES CORPORATION,
as Servicer
Dated as of July 1, 1999
TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01. Definitions............................................. 1
SECTION 1.02. Other Definitional Provisions........................... 1
ARTICLE II
Contribution of Receivables
SECTION 2.01. Contribution............................................ 2
SECTION 2.02. Intent of the Parties................................... 2
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties with
Respect to the Receivables............................. 3
SECTION 3.02. Custody of Receivable Files............................. 5
SECTION 3.03. Duties of Servicer as Custodian......................... 6
SECTION 3.04. Instructions; Authority To Act.......................... 6
SECTION 3.05. Custodian's Indemnification............................. 6
SECTION 3.06. Effective Period and Termination........................ 7
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer...................................... 7
SECTION 4.02. Collection and Application of Receivable Payments....... 8
SECTION 4.03. Realization upon Receivables............................ 8
SECTION 4.04. Physical Damage Insurance............................... 9
SECTION 4.05. Maintenance of Security Interests in Financed Vehicles.. 9
SECTION 4.06. Covenants of Servicer................................... 9
SECTION 4.07. Purchase of Receivables upon Breach..................... 9
SECTION 4.08. Servicing Fee........................................... 10
SECTION 4.09. Servicer's Certificate.................................. 10
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.... 10
SECTION 4.11. Annual Independent Certified Public Accountants' Report. 11
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables.................................. 11
SECTION 4.13. Servicer Expenses....................................... 11
SECTION 4.14. Appointment of Subservicer.............................. 12
SECTION 4.15. Fidelity Bond; Errors and Omissions Insurance........... 12
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ARTICLE V
Distributions; Statements to Noteholders
SECTION 5.01. Establishment of Trust Accounts.......................... 12
SECTION 5.02. Collections.............................................. 16
SECTION 5.03. Application of Collections............................... 17
SECTION 5.04. Advances................................................. 17
SECTION 5.05. Additional Deposits...................................... 18
SECTION 5.06. Distributions............................................ 18
SECTION 5.07. Reserve Account.......................................... 19
SECTION 5.08. Statements to Noteholders................................ 20
ARTICLE VI
The Depositor
SECTION 6.01. Representations of Depositor............................. 21
SECTION 6.02. Corporate Existence...................................... 22
SECTION 6.03. Liability of the Depositor............................... 22
SECTION 6.04. Indemnification.......................................... 22
SECTION 6.05. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor............................... 23
SECTION 6.06. Limitation on Liability of Depositor and Others.......... 24
SECTION 6.07. Depositor May Own Notes.................................. 24
SECTION 6.08. Pennsylvania Motor Vehicle Sales Finance Act License..... 24
SECTION 6.09. Notice of Events......................................... 25
ARTICLE VII
The Servicer
SECTION 7.01. Representations and Warranties of the Servicer........... 24
SECTION 7.02. Indemnities, etc. of Servicer............................ 26
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer................................ 27
SECTION 7.04. Limitation on Liability of Servicer and Others........... 27
SECTION 7.05. Resignation of Servicer.................................. 28
ARTICLE VIII
Servicer Default
SECTION 8.01. Servicer Default......................................... 29
SECTION 8.02. Appointment of Successor................................. 30
SECTION 8.03. Repayment of Advances.................................... 31
SECTION 8.04. Notification to Noteholders.............................. 31
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SECTION 8.05. Waiver of Past Defaults................................. 31
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables.................... 31
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment.............................................. 32
SECTION 10.02. Protection of Title to Trust; Change of Name,
Identity, Corporate Structure or Location of
the Depositor, Etc.................................... 33
SECTION 10.03. Notices................................................ 34
SECTION 10.04. Assignment............................................. 35
SECTION 10.05. Limitations on Rights of Others........................ 35
SECTION 10.06. Severability........................................... 35
SECTION 10.07. Separate Counterparts.................................. 35
SECTION 10.08. Headings............................................... 36
SECTION 10.09. Governing Law.......................................... 36
SECTION 10.10. Nonpetition Covenants.................................. 36
SECTION 10.11. Limitation of Liability of Owner Trustee and
Indenture Trustee..................................... 36
SECTION 10.12. Waiver................................................. 37
SECTION 10.13. Separate Corporate Existence........................... 37
SECTION 10.14. Submission to Jurisdiction............................. 39
SECTION 10.15. Tax Treatment.......................................... 40
APPENDIX A Definitions (Section 1.01)
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of the Receivable Files (Section 3.03(b))
EXHIBIT A Form of Monthly Payment Date Statement to Noteholders
(Section 5.08)
EXHIBIT B Form of Servicer's Certificate (Section 4.09)
EXHIBIT C Final Certification of Custodian (Section 3.02)
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TRANSFER AND SERVICING AGREEMENT dated as of July 1, 1999 (this
"Agreement") among DISTRIBUTION FINANCIAL SERVICES RV TRUST 1999-3, a New York
common law trust (the "Issuer"), DEUTSCHE RECREATIONAL ASSET FUNDING
CORPORATION, a Nevada corporation, as Depositor (the "Depositor"), and DEUTSCHE
FINANCIAL SERVICES CORPORATION, a Nevada corporation ("DFS"), as Servicer.
WHEREAS, the Issuer desires to acquire Receivables from the Depositor;
WHEREAS, the Depositor is willing to contribute such Receivables to the
Issuer; and
WHEREAS, the Depositor acquired such Receivables from the Transferor
pursuant to the Ganis/Depositor Transfer Agreement, and the Transferor acquired
certain of such Receivables from DFS pursuant to the DFS/Ganis Transfer
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Definitions. Except as otherwise specified herein or as the
context may otherwise require, capitalized terms used herein (including in the
recitals hereto) have the respective meanings assigned thereto in Appendix A for
all purposes of this Agreement.
SECTION 1.02. Other Definitional Provisions.
(a) All terms defined in Appendix A attached hereto shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto, accounting terms not defined in this Agreement or
in any such certificate or other document, and accounting terms partly defined
in this Agreement or in any such certificate or other document to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of accounting
terms in this Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(c) The words "hereof", "herein", "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular
provision of this Agreement; Article, Section, Schedule and Exhibit references
contained in this Agreement are references to Articles, Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation".
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, amended and
restated or otherwise modified and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated
therein; references to a Person are also to its permitted successors and
assigns.
(f) Each reference to the "close of business" on a particular day shall
mean 5:00 p.m. Pacific Time on such day.
ARTICLE II
Contribution of Receivables
---------------------------
SECTION 2.01. Contribution. The Depositor does hereby transfer, assign, set
over and otherwise convey to the Issuer, as a capital contribution, without
recourse (subject to the obligations of the Depositor set forth herein), all
right, title and interest of the Depositor in, to and under (but none of the
obligations of the Depositor under):
(a) the Receivables, the DFS/Ganis Transfer Agreement and the other
Transferor Conveyed Property;
(b) the Ganis/Depositor Transfer Agreement; and
(c) the proceeds of any and all of the foregoing.
The Receivables and other items covered by clauses (a)-(c) of this Section
2.01 shall be referred to collectively as the "Depositor Conveyed Property".
SECTION 2.02. Intent of the Parties.
(a) The Depositor and the Issuer intend that the conveyance by the
Depositor to the Issuer of the right, title and interest of the Depositor in, to
and under the Receivables and the other Depositor Conveyed Property pursuant to
this Agreement shall constitute a capital contribution and not a loan. However,
in the event that, notwithstanding the intent of the parties, such conveyance is
deemed to be a transfer for security and not a capital contribution, then
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(i) the Depositor shall be deemed to have granted, and in such event does hereby
grant, to the Issuer a first priority security interest in all of its right,
title and interest in, to and under the Depositor Conveyed Property, and (ii)
this Agreement shall constitute a security agreement under applicable law with
respect to such conveyance. If such conveyance is deemed to be a transfer for
security and not a capital contribution, the Depositor consents to the Issuer
hypothecating and transferring such security interest in favor of any assignee
or assignees and transferring the obligations secured thereby to such assignee
or assignees.
(b) No party hereto shall take any action that is inconsistent with the
ownership of the Depositor Conveyed Property by the Issuer, and each party
hereto shall inform any Person inquiring about the Receivables that the Issuer
owns the Depositor Conveyed Property. Without limiting the generality of the
foregoing, for accounting, tax and other purposes the Depositor and the Issuer
shall treat the transfer of the Depositor Conveyed Property by the Depositor to
the Issuer as a capital contribution by the Depositor to the Issuer.
Notwithstanding any other provision of this Agreement, no Person shall have any
recourse to DFS, the Transferor, the Depositor or the Servicer on account of the
financial inability of any Obligor to make payments in respect of a Receivable.
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties with Respect to the
Receivables. DFS has made the representations and warranties set forth in
Section 3.01 of the DFS/Ganis Transfer Agreement, and has consented to the
assignment by the Transferor to the Depositor and by the Depositor to the Issuer
of the Transferor's rights with respect thereto. The Transferor has made the
representations and warranties set forth in Section 3.01 of the Ganis/Depositor
Transfer Agreement, and has consented to the assignment by the Depositor to the
Issuer of the Depositor's rights with respect thereto. Pursuant to Section 2.01
of this Agreement, the Depositor has transferred to the Issuer all of the
Depositor's right, title and interest in, to and under the DFS/Ganis Transfer
Agreement and the Ganis/Depositor Transfer Agreement, which shall be understood
to include the representations and warranties of DFS and the Transferor therein,
upon which the Issuer relies in accepting the Receivables, together with all
rights of the Depositor with respect to any breach thereof, including the right
to require DFS or the Transferor, as the case may be, to purchase Receivables in
accordance with the DFS/Ganis Transfer Agreement or the Ganis/Depositor
Transferor Agreement, as the case may be.
The Depositor makes the following representations and warranties as to the
Receivables on which the Issuer is deemed to have relied in acquiring the
Receivables. Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date, but shall survive the
transfer and assignment of the Receivables to the Issuer and the pledge thereof
to the Indenture Trustee pursuant to the Indenture.
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(a) Title. No Receivable has been sold, transferred, assigned or pledged by
the Depositor to any Person other than the Issuer. Immediately prior to the
transfer and assignment by the Depositor to the Issuer, the Depositor had good
and marketable title to each Receivable, free and clear of all Liens and,
immediately upon the transfer thereof, the Issuer shall have good and marketable
title to each Receivable, free and clear of all Liens; and such transfer has
been perfected under the UCC.
(b) All Filings Made. All filings (including UCC filings) necessary in any
jurisdiction to give (i) the Issuer a first perfected ownership interest in the
Receivables and (ii) the Indenture Trustee a first perfected security interest
in the Receivables have been made.
Upon discovery by the Depositor, the Servicer, the Owner Trustee or the
Indenture Trustee of a breach of any of the representations and warranties of
the Depositor set forth in this Section, of the Transferor set forth in Section
3.01 of the Ganis/Depositor Transfer Agreement or of DFS set forth in Section
3.01 of the DFS/Ganis Transfer Agreement, in each case which materially and
adversely affects the value of the Receivables or the interest therein of the
Issuer or the Indenture Trustee (or which materially and adversely affects the
interest of the Issuer or the Indenture Trustee in the related Receivable in the
case of a representation and warranty relating to a particular Receivable), the
Person discovering such breach shall give prompt written notice to the other
parties hereto. On the last day of the Collection Period following the
Collection Period during which the Depositor discovers or receives notice of any
such breach of any such representation or warranty, if such breach shall not
have been cured in all material respects by such last day, then the Depositor
shall purchase (and, if applicable, the Depositor shall enforce the obligation
of DFS, under the DFS/Ganis Transfer Agreement, or Ganis, under the
Ganis/Depositor Transfer Agreement, to purchase) such Receivable from the Issuer
as of such last day at a price equal to the Purchase Amount of such Receivable,
which price the Depositor shall remit in the manner specified in Section 5.05;
provided that this section is subject to the longer time period for a breach of
Section 3.01(xiii) of the DFS/Ganis Transfer Agreement and Section 3.01(xiii) of
the Ganis/Depositor Transfer Agreement set forth in Section 3.01 of such
agreements; provided, further, however, that the obligation of the Depositor to
purchase any Receivable that arises as a result of a breach of the
representations and warranties of DFS or the Transferor under the DFS/Ganis
Transfer Agreement or the Ganis/Depositor Agreement, as the case may be, is
subject to the payment of the Purchase Amount by DFS or the Transferor in
accordance with the DFS/Ganis Transfer Agreement or the Ganis/Depositor Transfer
Agreement, as the case may be. Subject to the indemnification provisions
contained in the last paragraph of this Section, the sole remedy of the Issuer,
the Owner Trustee, the Indenture Trustee, the Residual Interestholder and the
Noteholders with respect to a breach of representations and warranties of the
Depositor set forth in this Section shall be to require the Depositor to
purchase Receivables pursuant to this Section, subject to the conditions
contained herein; provided that this Section shall not limit the right of the
Servicer, the Owner Trustee or the Indenture Trustee to enforce (or to cause the
Depositor to enforce) the obligation of DFS or the Transferor to purchase
Receivables pursuant to the DFS/Ganis Transfer Agreement or the Ganis/Depositor
Transfer Agreement, as the case may be.
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The Depositor shall indemnify the Issuer, the Owner Trustee and the
Indenture Trustee and hold each harmless against any loss, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Depositor's representations
and warranties contained in this Agreement; provided that the Depositor shall
not be liable for any indirect damages or for any loss, damage, penalty, fine,
forfeiture, legal fees and related costs, judgments and other costs and expenses
caused by the wilful misconduct of the Issuer, the Owner Trustee or the
Indenture Trustee.
SECTION 3.02. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer hereby
revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the following documents or instruments which are hereby or shall
hereby be constructively delivered to the Indenture Trustee, as pledgee of the
Issuer, as of the Closing Date with respect to each Receivable:
(a) the fully executed original Receivable;
(b) a fully executed assignment of the Receivable in blank or from the
related Dealer to DFS or the Transferor, as the case may be, if such Receivable
was acquired by DFS or the Transferor, as the case may be, from a Dealer.
(c) a certificate of physical damage insurance, application form for such
insurance signed by the Obligor or a signed representation letter from the
Obligor named in the Receivable pursuant to which the Obligor has agreed to
obtain physical damage insurance for the Financed Vehicle, or copies thereof;
(d) the Lien Certificate or application therefor or a certification from
the Servicer that it has received confirmation from an authorized official of
the appropriate governmental office of the existence of the first lien of DFS or
the Transferor with respect to the related Financed Vehicle; and
(e) a credit application signed by the Obligor, or a copy thereof.
Within 120 days after the Closing Date, the Servicer, as custodian, shall
ascertain whether all of the Receivable Files are in its possession, and shall
deliver to the Indenture Trustee a certification ("Final Certification")
substantially in the form attached as Exhibit C hereto. During the term of this
Agreement, in the event the Servicer, as custodian, discovers any defect with
respect to the Receivable File, the Servicer, as custodian, shall give written
specification of such defect to the Indenture Trustee.
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SECTION 3.03. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the Receivable Files as custodian
for the benefit of the Issuer and the Indenture Trustee and maintain such
accurate and complete accounts, records and computer systems pertaining to each
Receivable File as shall enable the Issuer to comply with this Agreement. In
performing its duties as custodian the Servicer shall act with reasonable care,
using that degree of skill and attention that the Servicer exercises with
respect to the receivable files relating to all comparable recreational vehicle
receivables that the Servicer services for itself or others. The Servicer shall
conduct, or cause to be conducted, periodic audits of the Receivable Files held
by it under this Agreement and of the related accounts, records and computer
systems, in such a manner as shall enable the Issuer or the Indenture Trustee to
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Issuer and the Indenture Trustee any failure on its part
to hold the Receivable Files and maintain its accounts, records and computer
systems as herein provided and shall promptly take appropriate action to remedy
any such failure.
(b) Maintenance of and Access to Records. The Servicer shall maintain each
Receivable File at its office specified in Schedule B or at such other office as
shall be specified to the Issuer and the Indenture Trustee by written notice not
later than 90 days after any change in location. The Servicer shall make
available to the Issuer and the Indenture Trustee or their respective duly
authorized representatives, attorneys or auditors a list of locations of the
Receivable Files, and access to such Receivable Files and the related accounts,
records and computer systems maintained by the Servicer at such times during
normal business hours as the Issuer or the Indenture Trustee shall instruct.
Access to Receivable Files by Noteholders, Note Owners and the Residual
Interestholder is covered by Section 4.12. Nothing in this Section shall affect
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the Servicer
to provide access to information as a result of such obligation shall not
constitute a breach of this Section.
(c) Release of Documents. Upon written instruction from the Indenture
Trustee, the Servicer shall release any Receivable File to the Indenture
Trustee, the Indenture Trustee's agent or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may designate,
as soon as practicable following the Servicer's receipt of such written
instruction.
SECTION 3.04. Instructions; Authority To Act. The Servicer shall be deemed
to have received proper instructions with respect to the Receivable Files upon
its receipt of written instructions signed by a Trust Officer of the Indenture
Trustee.
SECTION 3.05. Custodian's Indemnification. The Servicer as custodian shall
indemnify the Trust, the Owner Trustee and the Indenture Trustee and each of
their respective officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or asserted
against the Trust, the Owner Trustee or the Indenture Trustee or any of their
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respective officers, directors, employees and agents as the result of any
improper act or omission in any way relating to the maintenance and custody of
the Receivable Files by the Servicer as custodian thereof; provided, however,
that the Servicer shall not be liable to the Owner Trustee for any portion of
any such amount resulting from the willful misfeasance, bad faith or negligence
of the Owner Trustee, and the Servicer shall not be liable to the Indenture
Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Indenture Trustee.
SECTION 3.06 Effective Period and Termination. The Servicer's appointment
as custodian shall become effective as of the Cutoff Date and shall continue in
full force and effect until terminated pursuant to this Section. If DFS shall
resign as Servicer in accordance with Article VII of this Agreement or if all of
the rights and obligations of any Servicer shall have been terminated pursuant
to Section 8.01, the appointment of such Servicer as custodian shall be
terminated by the Indenture Trustee or by the Holders of Notes evidencing not
less than 25% of the Outstanding Amount of the Notes (or, if Notes have been
paid in full, by the Owner Trustee or by the Residual Interestholder, in the
same manner as the Indenture Trustee or such Holders of Notes may terminate the
rights and obligations of the Servicer under Section 8.01). The Indenture
Trustee or, with the consent of the Indenture Trustee, the Owner Trustee may
terminate the Servicer's appointment as custodian, with cause, at any time upon
written notification to the Servicer and, without cause, upon 30 days' prior
written notification to the Servicer. As soon as practicable after any
termination of such appointment, the Servicer shall deliver the Receivable Files
to the Indenture Trustee or the Indenture Trustee's agent at such place or
places as the Indenture Trustee may reasonably designate.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01 Duties of Servicer. The Servicer, for the benefit of the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable recreational vehicle receivables that
it services for itself or others. The Servicer's duties shall include collection
and posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, accounting for collections, furnishing
monthly and annual statements to the Owner Trustee and the Indenture Trustee
with respect to distributions and making Advances pursuant to Section 5.04.
Subject to the provisions of Section 4.02, the Servicer shall follow its
customary standards, policies and procedures in performing its duties as
Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the Residual
Interestholder or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables
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or to the Financed Vehicles securing such Receivables. If the Servicer shall
commence a legal proceeding to enforce a Receivable, the Issuer (in the case of
a Receivable other than a Purchased Receivable) shall thereupon be deemed to
have automatically assigned, solely for the purpose of collection, such
Receivable to the Servicer. If in any enforcement suit or legal proceeding it
shall be held that the Servicer may not enforce a Receivable on the grounds that
it shall not be a real party in interest or a holder entitled to enforce such
Receivable, the Owner Trustee shall, at the Servicer's expense and direction,
take steps to enforce such Receivable, including bringing suit in its name or
the name of the Owner Trustee, the Indenture Trustee, the Residual
Interestholder or the Noteholders. The Owner Trustee shall upon the written
request of the Servicer furnish the Servicer with any powers of attorney and
other documents reasonably necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder.
SECTION 4.02. Collection and Application of Receivable Payments. The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables as and when the same shall become
due and shall follow such collection procedures as it follows with respect to
all comparable recreational vehicle receivables that it services for itself or
others. Subject to the foregoing, the Servicer may grant extensions, rebates or
adjustments on a Receivable, which shall not, for the purposes of this
Agreement, modify the original due dates (except that DFS as Servicer may, for
administrative purposes, modify the due date of a Receivable to a different date
in the same month, which date shall be reflected in its servicing records) or
amounts of the originally scheduled payments of interest on Receivables;
provided, however, that if the Servicer extends the date for final payment by
the Obligor of any Receivable beyond the Final Scheduled Maturity Date, it shall
promptly purchase the Receivable from the Issuer in accordance with the terms of
Section 4.07. The Servicer may in its discretion waive any late payment charge
or any other fees that may be collected in the ordinary course of servicing a
Receivable. The Servicer shall not agree to any alteration of the interest rate
or the originally scheduled payments on any Receivable. The Servicer shall apply
payments by or on behalf of Obligors in accordance with Section 5.03.
SECTION 4.03. Realization upon Receivables. On behalf of the Issuer, the
Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Financed
Vehicles securing any Receivable as to which the Servicer shall have determined
eventual payment in full is unlikely. The Servicer shall follow such customary
and usual practices and procedures as it shall deem necessary or advisable in
its servicing of the Receivables, which may include reasonable efforts to
realize upon any recourse to Dealers and selling the Financed Vehicle at public
or private sale. The Servicer shall be entitled to reimbursement out of
recoveries on such Defaulted Receivable for its reasonable, out-of-pocket costs
and expenses incurred in realizing upon any Financed Vehicle securing any
Receivable that becomes a Defaulted Receivable or in attempting to repossess any
Financed Vehicle and in prosecuting legal action against any Obligor in respect
of any Receivable. The foregoing shall be subject to the provision that, in any
case in which the Financed Vehicle shall have suffered damage, (i) the Servicer
shall not expend funds in connection with the repair or the repossession of such
Financed Vehicle unless it shall determine in its discretion that such repair
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and/or repossession shall increase the Liquidation Proceeds by an amount greater
than the amount of its expenses in connection with such repair and/or
repossession, and (ii) the Servicer may, subject to Section 4.01, allow Obligors
to use the proceeds of the applicable Insurance Policy to repair or replace such
Financed Vehicle rather than to prepay the related Receivable.
SECTION 4.04. Physical Damage Insurance. The Servicer shall, in accordance
with its customary servicing procedures, require that each Obligor shall have
obtained physical damage insurance covering the Financed Vehicle as of the
execution of the Receivable.
SECTION 4.05. Maintenance of Security Interests in Financed Vehicles. The
Servicer shall, in accordance with its customary servicing procedures, take such
steps as are necessary to maintain perfection of the security interest created
by each Receivable in the related Financed Vehicle. The Servicer is hereby
authorized to take such steps as are necessary to re-perfect such security
interest on behalf of the Issuer and the Indenture Trustee in the event of the
relocation of a Financed Vehicle or for any other reason.
SECTION 4.06. Covenants of Servicer. The Servicer shall not release the
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part (except in the event of payment in full by
the Obligor thereunder or repossession, or except as ordered by a court of
competent jurisdiction), nor shall the Servicer impair the rights of the Issuer,
the Indenture Trustee, the Residual Interestholder or the Noteholders in such
Receivable, nor shall the Servicer increase the number of scheduled payments due
under a Receivable.
SECTION 4.07. Purchase of Receivables upon Breach. The Servicer or the
Owner Trustee shall inform the other party and the Indenture Trustee and the
Depositor promptly, in writing, upon the discovery of any breach of the
Servicer's obligations under Section 4.02, 4.05 or 4.06. Unless the breach shall
have been cured by the last day of the second Collection Period following such
discovery (or, at the Servicer's election, the last day of the first following
Collection Period), the Servicer shall purchase from the Trust any Receivable
materially and adversely affected by such breach as of such last day. If the
Servicer takes any action during any Collection Period pursuant to Section 4.02
that impairs the rights of the Issuer, the Indenture Trustee, the Noteholders or
the Residual Interestholder in any Receivable or as otherwise provided in
Section 4.02, the Servicer shall purchase such Receivable from the Trust as of
the close of business on the last day of such Collection Period. In
consideration of the purchase of any such Receivable pursuant to either of the
two preceding sentences, the Servicer shall remit the Purchase Amount in the
manner specified in Section 5.05. Subject to Section 7.02, the sole remedy of
the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders or the
Residual Interestholder with respect to a breach pursuant to Section 4.02, 4.05
or 4.06 shall be to require the Servicer to purchase Receivables pursuant to
this Section. The Owner Trustee and the Indenture Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any condition
requiring the purchase of any Receivable pursuant to this Section.
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SECTION 4.08. Servicing Fee. The Servicing Fee for each Monthly Payment
Date shall equal the product of (a) one-twelfth, (b) the Servicing Fee Rate and
(c) the Pool Balance as of the first day of the preceding Collection Period. The
Servicer shall also be entitled to keep all late fees, prepayment charges and
other administrative fees or similar charges provided for under the Receivables
or allowed by applicable law, in each case, to the extent not prohibited by
applicable law, collected (from whatever source) on the Receivables, plus any
reimbursement pursuant to the last paragraph of Section 7.02, plus amounts
distributed from the Reserve Account in accordance with Section 5.07(c).
SECTION 4.09. Servicer's Certificate. At least two Business Days prior to
each Determination Date the Servicer shall provide to the Indenture Trustee
sufficient information relating to the Receivables for the applicable Collection
Period to enable the Indenture Trustee to prepare Section VII of the Servicer's
Certificate. Not later than 11:00 A.M. (New York time) on each Determination
Date, the Servicer shall deliver to the Owner Trustee, each Paying Agent, the
Indenture Trustee and the Depositor, with a copy to the Rating Agencies, a
Servicer's Certificate containing all information necessary to make the
distributions to be made on the related Monthly Payment Date pursuant to
Sections 5.05 and 5.06 for the related Collection Period. Receivables to be
purchased by the Servicer, the Depositor, DFS or the Transferor shall be
identified by the Servicer by account number with respect to such Receivable (as
specified in the Schedule of Receivables).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee, on or before March 15 of each year beginning in 2000, an Officer's
Certificate, dated as of December 31 of the preceding year, stating that (i) a
review of the activities of the Servicer during the preceding 12 month period
(or such shorter period as shall have elapsed since the Closing Date) and of its
performance under this Agreement has been made under the supervision of the
officers of the Servicer signing such Officer's Certificate and (ii) to the best
of such officers' knowledge, based on such review, the Servicer has fulfilled
all its obligations under this Agreement throughout such year or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof. The Indenture
Trustee shall send a copy of such certificate and the report referred to in
Section 4.11 to the Rating Agencies. A copy of such certificate and the report
referred to in Section 4.11 may be obtained by any Noteholder, Note Owner or the
Residual Interestholder by a request in writing to the Owner Trustee addressed
to the Corporate Trust Office. Upon the telephone request of the Owner Trustee,
the Indenture Trustee shall promptly furnish the Owner Trustee a list of
Noteholders as of the date specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee
and the Rating Agencies, promptly after having obtained knowledge thereof, but
in no event later than five (5) Business Days thereafter, written notice in an
Officer's Certificate of any event which is or which with the giving of notice
or lapse of time, or both, would become, a Servicer Default under Section
8.01(a) or (b).
10
SECTION 4.11. Annual Independent Certified Public Accountants' Report. The
Servicer shall cause a firm of nationally recognized "independent certified
public accountants" (within the meaning of the Code of Professional Ethics of
the American Institute of Certified Public Accountants), which may also render
other services to the Servicer, the Depositor or their Affiliates, to deliver to
the Owner Trustee and the Indenture Trustee on or before March 15 of each year
beginning in 2000, a report addressed to the Board of Directors of the Servicer,
to the effect that (a) such firm has examined certain documents and records of
the Servicer relating to the servicing of Receivables under this Agreement
during the preceding calendar year (or, in the case of the first such report,
during the period from the Closing Date through the end of 1999), (b) such
examination (i) was made in accordance with generally accepted auditing
standards and accordingly included such tests and auditing procedures as such
firm considered necessary in the circumstances, and (ii) included tests relating
to recreational vehicle loans serviced for others in compliance with the minimum
servicing standards identified in the Mortgage Bankers Association of America's
Uniform Single Attestation Program for Mortgage Bankers (the "Program"), to the
extent such standards are applicable to the servicing obligations set forth in
this Agreement, (c) management of the Servicer has asserted to such firm that
the Servicer has complied with the minimum servicing standards identified in the
Program to the extent that such standards are applicable to the servicing
obligations set forth in this Agreement, and (d) in the opinion of such firm,
such assertion of the Servicer's management is correct (or, if such assertion of
the Servicer's management is not correct, stating why such assertion is not
correct).
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to the Noteholders, Note Owners, and the
Residual Interestholder access to the Receivable Files in such cases where the
Noteholders, Note Owners, or the Residual Interestholder, as applicable, shall
be required by applicable statutes or regulations to review such documentation.
Access shall be afforded without charge, but only upon reasonable request and
during the normal business hours at the offices of the Servicer. Nothing in this
Section shall affect the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors and the failure
of the Servicer to provide access to information as a result of such obligation
shall not constitute a breach of this Section.
The Servicer shall provide to the Noteholders, Note Owners, and the
Residual Interestholder and any supervisory agents or examiners which may relate
to the Noteholders, Note Owners, or the Residual Interestholder, including the
Office of Thrift Supervision, the Office of the Comptroller of the Currency or
the FDIC and other similar entities, access to any documentation regarding the
Receivables which may be required by any applicable regulations. Such access
shall be afforded without charge, upon reasonable request, during normal
business hours and at the offices of the Servicer, all in accordance with
federal government, the FDIC, the Office of Thrift Supervision, the Office of
the Comptroller of the Currency or any other similar regulations.
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SECTION 4.13. Servicer Expenses. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of independent accountants, taxes imposed on the Servicer
and expenses incurred by the Servicer in connection with distributions and
reports to Noteholders.
SECTION 4.14. Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder including but not limited to its obligations as custodian as
set forth in Article III hereof. Prior to the appointment of any subservicer
other than the Transferor, the Servicer shall cause the Rating Agency Condition
to have been satisfied in connection therewith. Notwithstanding the appointment
of any subservicer (including but not limited to the Transferor), the Servicer
shall remain obligated and be liable to the Issuer, the Owner Trustee, the
Indenture Trustee, the Noteholders and the Residual Interestholder for the
servicing, administering and custodianship of the Receivables in accordance with
the provisions hereof without diminution of such obligation and liability by
virtue of the appointment of such subservicer and to the same extent and under
the same terms and conditions as if the Servicer alone were servicing and
administering and acting as custodian of the Receivables. The fees and expenses
of the subservicer shall be as agreed between the Servicer and its subservicer
from time to time, and none of the Issuer, the Owner Trustee, the Indenture
Trustee, the Noteholders or the Residual Interestholder shall have any
responsibility therefor.
SECTION 4.15. Fidelity Bond; Errors and Omissions Insurance. The Servicer
shall maintain, at its own expense, a blanket fidelity bond and an errors and
omissions insurance policy, with broad coverage with responsible companies on
all officers, employees or other persons acting in any capacity with regard to
the Receivables to handle funds, money, documents and papers relating to the
Receivables. Any such fidelity bond and errors and omissions insurance shall
protect and insure the Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such persons.
Such fidelity bond shall also protect and insure the Servicer against losses in
connection with any failure to maintain insurance policies required pursuant to
this Agreement and the release or satisfaction of a Receivable without having
obtained payment in full of the indebtedness secured thereby. No provision of
this Section 4.15 requiring such fidelity bond and errors and omissions
insurance shall diminish or relieve the Servicer from its duties and obligations
as set forth in this Agreement. The coverage under any such bond and insurance
policy shall be in such amounts as are customary for the business of servicing
recreational vehicle receivables.
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ARTICLE V
Distributions; Statements to Noteholders
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SECTION 5.01. Establishment of Trust Accounts.
(a)(i) The Indenture Trustee, for the benefit of the Noteholders and
the Residual Interestholder, shall establish and maintain in the name of
the 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 Residual
Interestholder.
(ii) The Indenture Trustee, for the benefit of the Noteholders, shall
establish and maintain in the name of the 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.
(iii) The Indenture Trustee, for the benefit of the Noteholders and
the Servicer, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Noteholders and the Servicer.
(b) Subject to Section 8.03 of the Indenture, funds on deposit in the
Collection Account and the Reserve Account (the Collection Account and the
Reserve Account being referred to collectively, with the Note Distribution
Account, as the "Trust Accounts") shall be invested by the Indenture Trustee in
Eligible Investments selected in writing by the Servicer, in each case pursuant
to a direction of the Servicer which shall contain a certification that the
requested investment constitutes an Eligible Investment and is permitted to be
made hereby by the Indenture Trustee. It is understood and agreed that the
Indenture Trustee shall not be liable for any loss arising from an investment in
Eligible Investments made in accordance with this Section 5.01(b) except to the
extent that the Indenture Trustee is the obligor of such Eligible Investments,
unless such loss is occasioned by a reduction in the market price of such
investment and not by default of the Indenture Trustee in its capacity as
obligor. All such Eligible Investments shall be held by the Indenture Trustee
for the benefit of the Noteholders and the Residual Interestholder (or for such
of such holders for whose benefit the applicable account is maintained). All
Investment Earnings with respect to amounts on deposit in a Trust Account shall
be added to the balance of funds on deposit in such Trust Account, subject to
application of funds on deposit in such Trust Account pursuant to the applicable
Basic Document. Other than as permitted by the Rating Agencies, funds on deposit
in the Collection Account and the Reserve Account shall be invested in Eligible
Investments that shall mature (A) not later than the Business Day immediately
preceding the next Monthly Payment Date or (B) on such next Monthly Payment Date
if either (x) such investment is held in the trust department of the institution
with which each of the Collection Account and the Reserve Account is then
maintained and is invested in a time deposit of such institution that is rated
at least A-1 by
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Standard & Poor's, F1+ by Fitch and P-1 by Moody's or (y) DFS (so long as the
short-term unsecured debt obligations of DFS are either (i) rated at least F1+
by Fitch, A-1 by Standard & Poor's and P-1 by Moody's on the date such
investment is made or (ii) guaranteed by an entity whose short-term unsecured
debt obligations are rated at least F1+ by Fitch, A-1 by Standard & Poor's and
P-1 by Moody's on the date such investment is made) has agreed to advance funds
on such Monthly Payment Date to the Note Distribution Account in the amount
payable on such investment on such Monthly Payment Date pending receipt thereof
to the extent necessary to make distributions on such Monthly Payment Date. The
guarantee referred to in clause (y) of the preceding sentence shall be subject
to the Rating Agency Condition. For the purpose of the foregoing, unless DFS
affirmatively agrees in writing with the Indenture Trustee to make such advance
with respect to such investment prior to the time an investment is made, it
shall not be deemed to have agreed to make such advance. Funds deposited in a
Trust Account on a day which immediately precedes a Monthly Payment Date upon
the maturity of any Eligible Investments are not required to be invested
overnight. Funds on deposit in the Note Distribution Account shall not be
invested.
(c)(i) 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 (including all income thereon) and all such funds, investments, proceeds
and income shall be part of the Trust Estate. The Trust Accounts shall be under
the sole dominion and control of the Indenture Trustee for the benefit of the
Noteholders and the Residual Interestholder (or for such of such holders for
whose benefit the applicable account is maintained). If, at any time, any of the
Trust Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee
(or the Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Trust Account as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new Trust Account.
(ii) With respect to the Trust Account Property, the Indenture Trustee
agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit accounts
shall be held solely in the Eligible Deposit Accounts, subject to the
last sentence of Section 5.01(c)(i); and each such Eligible Deposit
Account shall be subject to the exclusive custody and control of the
Indenture Trustee, and the Indenture Trustee shall have sole signature
authority with respect thereto;
(B) any Trust Account Property that constitutes a Certificated
Item (other than a Clearing Corporation Item, Euroclear Item or Cedel
Item) or Instrument shall be registered in the name of the Indenture
Trustee or endorsed to the Indenture Trustee or in blank by an
authorized person, with signature guaranteed, and the Indenture
Trustee shall maintain continuous possession of such Certificated Item
or Instrument on behalf of the Trust in the State of New York;
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(C) any Trust Account Property that constitutes an Uncertificated
Item (except those Uncertificated Items consisting of Clearing
Corporation Items) shall be continuously registered on the books of
the issuer thereof to the Indenture Trustee;
(D) in the case of any Trust Account Property that constitutes a
Clearing Corporation Item, the Indenture Trustee shall cause (i) the
relevant Clearing Corporation to make appropriate entries on its books
increasing the appropriate securities account of the Indenture Trustee
at such Clearing Corporation by the amount of such Clearing
Corporation Item, and (ii) such Clearing Corporation Item to be (1)
continuously registered to the Clearing Corporation or its custodian
or the nominee of either subject to the exclusive control of such
Clearing Corporation (in the case of a Clearing Corporation Item that
is an Uncertificated Item) or continuously maintained in the State of
New York in the possession of such Clearing Corporation or its
custodian or the nominee of either subject to the exclusive control of
such Clearing Corporation (in the case of a Clearing Corporation Item
that is a Certificated Item), and (2) continuously identified on the
books and records of such Clearing Corporation for the sole and
exclusive account of the Indenture Trustee;
(E) in the case of any Trust Account Property that constitutes a
Euroclear Item, the Indenture Trustee shall cause (i) Euroclear to
make appropriate entries on its books increasing the appropriate
securities account of the Indenture Trustee's client securities
account at Euroclear and to send confirmation to the Indenture Trustee
that Euroclear is holding such Euroclear Item for the account of the
Indenture Trustee, and (ii) such Euroclear Item to be (1) continuously
registered to Euroclear, and (2) continuously identified on the books
and records of Euroclear for the sole and exclusive account of the
Indenture Trustee;
(F) in the case of any Trust Account Property that constitutes a
Cedel Item, the Indenture Trustee shall cause (i) Cedel to make
appropriate entries on its books transferring each such Cedel Item to
the Indenture Trustee's client securities account at Cedel and to send
confirmation to the Indenture Trustee that Cedel is holding such Cedel
Item for the account of the Indenture Trustee, and (ii) such Cedel
Item to be (1) continuously registered to Cedel, and (2) continuously
identified on the books and records of Cedel for the sole and
exclusive account of the Indenture Trustee;
(G) in the case of any Trust Account Property that constitutes a
Government Item, the Indenture Trustee shall cause (i) the transfer of
such Government Item to one or more book-entry accounts for the
Indenture Trustee at the Federal Reserve Bank of New York, and (ii)
such Government Item to be
15
continuously identified in one or more book-entry accounts for the
Indenture Trustee at the Federal Reserve Bank of New York; and
(H) without limiting the foregoing, the Servicer shall instruct
the Indenture Trustee to take such different or additional action as
may be, based on an Opinion of Counsel of the Servicer, reasonably
appropriate in order to maintain the perfection and priority of the
security interest of the Indenture Trustee in the Trust Account
Property under applicable law, including Articles 8 and 9 of the UCC
and regulations of the U.S. Department of the Treasury governing
transfers of interests in Government Items, and the Indenture Trustee
shall cooperate with the Servicer in connection therewith.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee or by the Owner Trustee with the consent of the Indenture Trustee,
to make withdrawals and payments from the Trust Accounts (other than the
Note Distribution Account) for the purpose of permitting the Servicer or
the Owner Trustee to carry out its respective duties hereunder or
permitting the Indenture Trustee to carry out its duties under the
Indenture.
All references in this Section 5.01 (or in terms defined in Appendix A and
used without definition in this Section 5.01) to the UCC shall be to the UCC as
in effect in the State of New York, as amended from time to time.
SECTION 5.02. Collections. (a) The 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 Purchased
Receivables) and all Liquidation Proceeds, both as collected during each
Collection Period. For purposes of this Article V the phrase "payments by or on
behalf of Obligors" shall mean payments made with respect to the Receivables or
the Financed Vehicles by Persons other than the Servicer, DFS, the Transferor or
the Depositor.
(b) Notwithstanding anything in this Agreement to the contrary, if
(i) DFS is the Servicer, (ii) no Servicer Default has occurred and is
continuing and (iii) (x) DFS arranges for and maintains a letter of credit
or other form of credit enhancement for the benefit of the Trust in respect
of the Servicer's obligations to make deposits of payments and Liquidation
Proceeds in the Collection Account that is acceptable in form and substance
to each Rating Agency or (y) DFS otherwise obtains the Rating Agency
confirmations described below, then, subject to any limitations in the
confirmations described below, the Servicer need not make the daily
deposits of payments and Liquidation Proceeds into the Collection Account
as provided in Section 5.02(a), but may make a single deposit into the
Collection Account in same-day funds not later than 2:00 p.m., New York
City time, on each Determination Date in a net amount equal to the amount
which would have been on deposit with respect to the immediately preceding
Collection Period in the Collection Account; provided, however, that prior
to ceasing daily deposits as described in Section 5.02(a) the Servicer
shall have delivered to the Indenture Trustee (i) written confirmation from
each of the Rating Agencies that the
16
failure by DFS to make daily deposits shall not result in a qualification,
reduction or withdrawal of the rating of any outstanding Notes and (ii) a
certificate of a vice president or other officer of the Servicer stating
that all conditions described in this paragraph to the cessation of the
Servicer's duty to make daily deposits have been satisfied. If (i) DFS is
no longer the Servicer, (ii) a Servicer Default has occurred and is
continuing, (iii) any Rating Agency shall notify the Servicer that the
letter of credit or other form of credit enhancement described in the
previous sentence is not satisfactory to such Rating Agency or (iv) any
Rating Agency shall revoke its confirmation described in the previous
sentence or DFS shall fail to comply with any limitations in any such
confirmation, then (x) the Servicer shall comply with Section 5.02(a) until
such time as the conditions described in the previous sentence have been
satisfied and (y) DFS promptly shall notify the Indenture Trustee as to the
failure of such conditions to be satisfied.
(c) If (i) the Servicer makes a deposit into the Collection Account
in respect of a payment of a Receivable and such payment was received by
the Servicer in the form of a check which is not honored for any reason or
(ii) the Servicer makes a mistake with respect to the amount of any payment
and deposits an amount that is less than or more than the actual amount of
such payment, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect such
dishonored check or mistake. Any Receivable in respect of which a
dishonored check is received shall be deemed not to have been paid.
(d) As an administrative convenience, unless the Servicer is required
to remit payments daily pursuant to Section 5.02(a) (taking into effect
Section 5.02(b)), the Servicer may make the deposit of payments by or on
behalf of Obligors, Advances and Purchase Amounts for or with respect to
the related Collection Period out of distributions to be made to the
Servicer with respect to such Collection Period. However, the Servicer
shall account to the Owner Trustee, the Indenture Trustee, the Noteholders
and the Residual Interestholder as if all deposits, distributions and
transfers were made individually.
SECTION 5.03. Application of Collections. All payments by or on behalf of
Obligors for any Collection Period shall be applied by the Servicer as follows:
(a) first, payments by or on behalf of the Obligors (other than with respect to
Purchased Receivables) shall be applied to reduce Outstanding Advances to the
extent described in Section 5.04; and (b) second, any excess shall be applied to
interest and principal on the Receivables in accordance with the Simple Interest
Method; and (c) third, any remaining amounts shall be applied to any late fees
and other charges in accordance with the customary servicing procedures that the
Servicer follows with respect to all comparable recreational vehicle receivables
that it services for itself or others.
SECTION 5.04. Advances. As of the close of business on the last day of each
Collection Period, subject to the last sentence of this Section, the Servicer
shall advance an amount equal to the amount of interest due on the Receivables
at their respective APRs for such Collection Period (assuming the Receivables
pay on their respective due dates) minus the
17
amount of interest actually received by the Servicer on the Receivables during
such Collection Period (such amount, an "Advance"). With respect to each
Receivable, the Advance shall increase Outstanding Advances. If such calculation
(i.e., the subtraction of the amount of interest due on the Receivables at their
respective APRs for the related Collection Period (assuming the Receivables pay
on their respective due dates) from the amount of interest actually received on
the Receivables during the related Collection Period) results in a negative
number, an amount equal to the absolute value of such negative number shall be
paid to the Servicer (out of funds that otherwise would be deposited in the
Collection Account) and the amount of Outstanding Advances shall be reduced by
such amount, in each case in accordance with Section 5.03. In addition, in the
event that a Receivable becomes a Defaulted Receivable, Liquidation Proceeds
with respect to such Receivable attributable to accrued and unpaid interest
thereon (but not including interest for the then current Collection Period)
shall be paid to (or retained by) the Servicer (out of funds that otherwise
would be deposited in the Collection Account) to reduce Outstanding Advances.
Notwithstanding the foregoing, the Servicer shall not make any Advance: (i)
unless the Servicer, in its sole discretion, believes that the Servicer shall be
reimbursed for such Advance as contemplated by this Section; (ii) in respect of
principal of the Receivables; or (iii) in respect of a Defaulted Receivable or a
Purchased Receivable.
SECTION 5.05. Additional Deposits. The Servicer shall deposit in the
Collection Account on or before 2:00 p.m. New York time on the Determination
Date following each Collection Period the related Advance pursuant to Section
5.04. The Servicer and the Depositor shall deposit or cause to be deposited in
the Collection Account the aggregate Purchase Amount with respect to Purchased
Receivables and the Servicer shall deposit therein all amounts to be paid under
Section 9.01, in each case on or prior to 2:00 p.m. New York time on the
Determination Date following the Collection Period as of which such purchase is
made by the Servicer, DFS, the Transferor or the Depositor, as the case may be.
In addition, any other deposits required to be made by the Depositor or the
Servicer to the Collection Account and which are not otherwise provided for by
Section 5.02 or by the other provisions of this Section 5.05 shall be made on or
prior to 2:00 p.m. New York time on the Determination Date following the related
Collection Period.
SECTION 5.06. Distributions.
(a)(i) On each Determination Date, the Servicer shall calculate all
amounts required to be deposited in the Note Distribution Account and the
Residual Interestholder Distribution Account.
(ii) On each Monthly Payment Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
4.09) to make, and the Indenture Trustee shall make, the following deposits
and distributions from amounts on deposit in the Collection Account for
receipt by the Servicer or deposit in the applicable account by
18
11:00 a.m. (New York time) on such Monthly Payment Date, to the extent of
the Total Distribution Amount, in the following order of priority:
(A) to the Servicer (if DFS is no longer the Servicer), the
Servicing Fee and all unpaid Servicing Fees from prior Collection
Periods;
(B) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clause (A), the Noteholders'
Interest Distributable Amount;
(C) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clauses (A) and (B), the
Noteholders' Regular Principal Distributable Amount;
(D) If DFS is the Servicer, to DFS in its capacity as the
Servicer, from the Total Distribution Amount remaining after the
application of clauses (A) through (C), the Servicing Fee and all
unpaid Servicing Fees from prior Collection Periods;
(E) to the Reserve Account, from the Total Distribution Amount
remaining after the application of clauses (A) through (D), the
amount, if any, by which the Specified Reserve Account Balance for
such Monthly Payment Date exceeds the amount then on deposit in the
Reserve Account; and
(F) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clauses (A) through (E), the
Noteholders' Excess Distributable Amount, if any.
(b) On each Monthly Payment Date, the portion of the Total Distribution
Amount, if any, remaining after making in full each of the allocations and
distributions set forth in Section 5.06(a)(ii), shall be distributed by the
Indenture Trustee from the Collection Account to the Owner Trustee for
distribution by the Owner Trustee to the Residual Interestholder pursuant to
Section 5.02(a) of the Trust Agreement.
SECTION 5.07. Reserve Account.
(a) On the Closing Date the Depositor shall deposit (or cause to be
deposited) an amount, in immediately available funds, equal to the Reserve
Account Initial Deposit into the Reserve Account. By its execution hereof, the
Indenture Trustee acknowledges receipt of such deposit in the Reserve Account.
(b) In the event that the Noteholders' Interest Distributable Amount plus
the Noteholders' Regular Principal Distributable Amount for a Monthly Payment
Date exceeds the sum of the amounts deposited into the Note Distribution Account
pursuant to Section 5.06(a)(ii)
19
on such Monthly Payment Date, the Servicer shall instruct the Indenture Trustee
to withdraw from the Reserve Account on such Monthly Payment Date (or, if the
Reserve Account is not maintained at the Indenture Trustee, on the Determination
Date preceding such Monthly Payment Date) an amount equal to such excess, to the
extent of funds available therein, and deposit such amount into the Note
Distribution Account (and the Indenture Trustee shall make such withdrawal and
deposit).
(c) If the amount on deposit in the Reserve Account on any Monthly Payment
Date (after giving effect to all deposits thereto or withdrawals therefrom on
such Monthly Payment Date) is greater than the Specified Reserve Account Balance
for such Monthly Payment Date and the Overcollateralization Amount for such
Monthly Payment Date is equal to or exceeds the Targeted Overcollateralization
Amount, then the Servicer shall instruct the Indenture Trustee to distribute
(and the Indenture Trustee shall distribute) the amount of such excess to the
Servicer as additional compensation for servicing the Receivables. On the first
Monthly Payment Date as of which the aggregate principal amount of the Notes has
been reduced to zero, the Servicer shall instruct the Indenture Trustee to
distribute (and the Indenture Trustee shall distribute) the amount (if any) on
deposit in the Reserve Account to the Servicer as additional compensation for
servicing the Receivables. In the event that DFS is no longer the Servicer,
amounts payable to the Servicer pursuant to this clause (c) shall be paid
instead to the Depositor on each applicable Monthly Payment Date.
SECTION 5.08. Statements to Noteholders. At least three Business Days prior
to each Monthly Payment Date, the Servicer shall provide to the Indenture
Trustee and the Owner Trustee (with a copy to each Paying Agent) information
relating to the Receivables for the applicable Collection Period in order that
the Indenture Trustee may perform the requisite calculations and forward to each
Noteholder of record as of the most recent Record Date a statement substantially
in the form of Exhibit A setting forth the information specified in such Exhibit
and the following information as to the Notes to the extent applicable:
(i) the amount of distributions to be made on such Monthly Payment
Date allocable to principal of each Class of Notes;
(ii) the amount of such distributions to be made on such Monthly
Payment Date allocable to interest on or with respect to each Class of
Notes;
(iii) the outstanding principal balance of each Class of Notes and the
Note Pool Factor for each such Class, after giving effect to payments
allocated to principal reported under clause (i) above;
(iv) the amount of the Servicing Fee paid to the Servicer with respect
to the related Collection Period or Collection Periods, as the case may be;
(v) the amount of Realized Losses, if any, with respect to the related
Collection Period;
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(vi) the balance of the Reserve Account on such Monthly Payment Date
after giving effect to deposits and withdrawals to be made on such Monthly
Payment Date, if any;
(vii) the Pool Balance as of the close of business on the last day of
the preceding Collection Period; and
(viii) the Noteholders' Interest Carryover Shortfall, if any, and the
change in such amounts from the preceding statement.
Each amount set forth on the Monthly Payment Date statement under
clauses (i), (ii), (iv) and (viii) above shall be expressed as a dollar
amount per $1,000 of original principal balance of a Note.
ARTICLE VI
The Depositor
-------------
SECTION 6.01. Representations of Depositor. The Depositor makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, in the case of the
Receivables, and shall survive the transfer of the Receivables to the Issuer and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Depositor is duly organized and
validly existing as a corporation in good standing under the laws of the State
of Nevada, with the corporate power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has, the corporate
power, authority and legal right to acquire and own the Receivables.
(b) Due Qualification. The Depositor 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.
(c) Power and Authority. The Depositor has the corporate power and
authority to execute and deliver this Agreement and to carry out its respective
terms; the Depositor has full power and authority to transfer and assign the
property to be transferred and assigned to and deposited with the Issuer, and
the Depositor shall have duly authorized such transfer and assignment to the
Issuer by all necessary corporate action; and the execution, delivery and
performance of this Agreement by the Depositor has been duly authorized by the
Depositor by all necessary corporate action.
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(d) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Depositor enforceable in accordance with its terms.
(e) No Violation. The consummation of the transactions contemplated by this
Agreement by the Depositor and the fulfillment of the terms hereof by the
Depositor do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or bylaws of the Depositor, or any
indenture, agreement or other instrument to which the Depositor is a party or by
which it is bound; or result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents); or violate any
law or, to the best of the Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
(f) No Proceedings. To the Depositor's best knowledge, there are no
proceedings or investigations pending or threatened before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties: (i) asserting the invalidity
of this Agreement, the Indenture or any of the other Basic Documents, the Notes
or the Residual Interest, (ii) seeking to prevent the issuance of the Notes or
the Residual Interest or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, this Agreement, the Indenture, any of the
other Basic Documents, the Notes or the Residual Interest or (iv) which might
adversely affect the federal or state income tax attributes of the Notes or the
Residual Interest.
(g) Chief Executive Office. The chief executive office of the Depositor is
located at 655 Maryville Centre Drive, St. Louis, Missouri 63141.
SECTION 6.02. Corporate Existence. During the term of this Agreement, the
Depositor shall keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and shall obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby. In
addition, all transactions and dealings between the Depositor and its Affiliates
shall be conducted on an arm's-length basis.
SECTION 6.03. Liability of the Depositor. The Depositor shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Depositor under this Agreement.
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SECTION 6.04. Indemnification. (a) The Depositor shall indemnify, defend
and hold harmless the Issuer, the Owner Trustee, the Indenture Trustee and any
of the officers, directors, employees and agents of the Issuer, the Owner
Trustee and the Indenture Trustee from and against any taxes that may at any
time be asserted against any such Person with respect to the transactions
contemplated herein and in the other Basic Documents (except any income taxes
arising out of fees paid to the Owner Trustee and the Indenture Trustee),
including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, in the case of the Issuer, not
including any taxes asserted with respect to, and as of the date of, the
transfer of the Receivables to the Issuer or the issuance and original sale of
the Notes and the Residual Interest, or asserted with respect to ownership of
the Receivables, or federal or other income taxes arising out of distributions
on the Notes and the Residual Interest) and costs and expenses in defending
against the same.
(b) The Depositor shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders and Residual
Interestholder and any of the officers, directors, employees and agents of the
Issuer, the Owner Trustee and the Indenture Trustee from and against any loss,
liability or expense incurred by reason of (i) the Depositor's willful
misfeasance, bad faith or negligence in the performance of its duties under this
Agreement, or by reason of reckless disregard of its obligations and duties
under this Agreement and (ii) the Depositor's or the Issuer's violation of
federal or state securities laws in connection with the offering and sale of the
Notes or the Residual Interest.
(c) The Depositor shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers, directors,
employees and agents from and against all costs, expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties herein and in the Trust
Agreement contained, in the case of the Owner Trustee, and herein and in the
Indenture contained, in the case of the Indenture Trustee, except to the extent
that such cost, expense, loss, claim, damage or liability: (i) in the case of
the Owner Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Owner Trustee or, in the case
of the Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Indenture Trustee; or (ii) in
the case of the Owner Trustee, shall arise from the breach by the Owner Trustee
of any of its representations or warranties set forth in Section 7.03 of the
Trust Agreement.
(d) The Depositor shall pay any and all taxes levied or assessed upon all
or any part of the Owner Trust Estate (other than any taxes expressly excluded
from the Depositor's responsibilities pursuant to this Section 6.04).
Indemnification under this Section shall survive the resignation or removal
of the Owner Trustee or the Indenture Trustee and the termination of this
Agreement and the other Basic Documents and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Depositor shall have made
any indemnity payments pursuant to this Section and the Person
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to or on behalf of whom such payments are made thereafter shall collect any of
such amounts from others, such Person shall promptly repay such amounts to the
Depositor, without interest.
SECTION 6.05. Merger or Consolidation of, or Assumption of the Obligations
of, Depositor. Any Person (a) into which the Depositor may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Depositor shall be a party or (c) which may succeed to the properties and assets
of the Depositor substantially as a whole, which Person in any of the foregoing
cases executes an agreement of assumption to perform every obligation of the
Depositor under this Agreement, shall be the successor to the Depositor
hereunder without the execution or filing of any document or any further act by
any of the parties to this Agreement; provided, however, that (i) immediately
after giving effect to such transaction, no representation or warranty made by
the Depositor pursuant to Section 3.01 shall have been breached (unless the
applicable breach shall have been cured, or the applicable Receivable shall have
been purchased in accordance therewith), (ii) the Depositor shall have delivered
to the Owner Trustee and the Indenture Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (iii) the Rating Agency Condition shall
have been satisfied with respect to such transaction and (iv) the Depositor
shall have delivered to the Owner Trustee and the Indenture Trustee an Opinion
of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interests. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii), (iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
SECTION 6.06. Limitation on Liability of Depositor and Others. The
Depositor and any director, officer, employee or agent of the Depositor may rely
in good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor 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 6.07. Depositor May Own Notes. The Depositor and any Affiliate
thereof may in its individual or any other capacity become the owner or pledgee
of Notes with the same rights as it would have if it were not the Depositor or
an Affiliate thereof, except as expressly provided herein or in any other Basic
Document.
SECTION 6.08. Pennsylvania Motor Vehicle Sales Finance Act License. The
Depositor shall use its best efforts to maintain, and shall cause the Trust to
use its best efforts to maintain, the effectiveness of all licenses required
under the Pennsylvania Motor Vehicle Sales Finance
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Act in connection with this Agreement and the other Basic Documents and the
transactions contemplated hereby and thereby until such time as the Trust shall
terminate in accordance with the Trust Agreement.
SECTION 6.09. Notice of Events. The Depositor shall give each of the Rating
Agencies prior written notice of any amendment to its articles of incorporation.
The Depositor shall give each Rating Agency prior written notice of any issuance
by the Depositor of any debt not rated by such Rating Agency.
ARTICLE VII
The Servicer
------------
SECTION 7.01. Representations and Warranties of the Servicer. DFS makes the
following representations and warranties on which each of the Transferor, the
Depositor and the Issuer is deemed to have relied in acquiring the Receivables.
Such representations and warranties speak as of the execution and delivery of
this Agreement and as of the Closing Date but shall survive (1) the transfer and
assignment of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture and (2) the removal of DFS as
Servicer.
(i) DFS is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada with the full power and
authority to own and conduct its business as it is presently conducted by
DFS. DFS is or shall be in compliance with the laws of any state to the
extent necessary to insure the enforceability of each Receivable and the
servicing of the Receivables in accordance with the terms of this
Agreement.
(ii) DFS has the full power and authority to consummate all
transactions contemplated by this Agreement. DFS has duly authorized the
execution, delivery and performance of this Agreement, has duly executed
and delivered this Agreement and this Agreement constitutes a legal, valid
and binding obligation of DFS, enforceable against it in accordance with
its terms.
(iii) Neither the execution and delivery of this Agreement by DFS, the
acquisition or origination of the Receivables by DFS, the consummation by
DFS of the transactions contemplated hereby, nor the fulfillment of or
compliance by DFS with the terms and conditions of this Agreement shall
conflict with or result in a breach of any of the terms of the charter or
by-laws of DFS or any legal restriction or any agreement or instrument to
which DFS is now a party or by which it is bound, or constitute a default
or result in an acceleration under any of the foregoing, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
DFS or its property is subject.
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(iv) DFS does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant of DFS contained in
this Agreement.
(v) There is no litigation pending or, to the knowledge of DFS,
threatened, which if determined adversely to DFS would adversely affect the
execution, delivery or enforceability of this Agreement, or the ability of
DFS to service the Receivables hereunder in accordance with the terms
hereof or which would have a material adverse effect on the financial
condition of DFS.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by DFS of or compliance by DFS with this Agreement or the
consummation by DFS of the transactions contemplated by this Agreement.
(vii) The collection practices used by DFS with respect to each
Receivable have been in all respects legal, proper, prudent and customary
in the origination and servicing of receivables similar to the Receivables.
(viii) The chief executive office of DFS is located in St. Louis,
Missouri.
(ix) Neither the representations and warranties of DFS set forth in
this Agreement nor any statement, report or other document furnished or to
be furnished by DFS in connection with or pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading;
SECTION 7.02. Indemnities, etc. of Servicer. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders, the Residual
Interestholder and the Depositor and any of the officers, directors, employees
and agents of the Issuer, the Owner Trustee and the Indenture Trustee from and
against any and all costs, expenses, losses, damages, claims and liabilities
arising out of or resulting from the use, ownership or operation by the Servicer
or any Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Depositor, the Noteholders, the
Residual Interestholder and any of the officers, directors, employees and agents
of the Issuer, the Owner Trustee and the Indenture Trustee from and against any
and all costs, expenses, losses, claims, damages and liabilities to the extent
that such cost, expense, loss, claim, damage or liability arose out of, or was
imposed upon any such Person through, the negligence, willful misfeasance or bad
faith of
26
the Servicer in the performance of its duties under this Agreement or by reason
of reckless disregard of its obligations and duties under this Agreement.
(c) The Servicer agrees to pay when due the compensation and any other
amounts due to the Indenture Trustee and the Owner Trustee pursuant to Section
6.07 of the Indenture and Section 8.02 of the Trust Agreement (in the event the
Issuer or the Depositor, as applicable, cannot fully indemnify the Indenture
Trustee or the Owner Trustee), as applicable.
For purposes of this Section, in the event of the termination of the rights
and obligations of DFS (or any successor thereto pursuant to Section 7.03) as
Servicer pursuant to Section 8.01, or a resignation by such Servicer pursuant to
this Agreement, such Servicer shall be deemed to be the Servicer pending
appointment of a successor Servicer (other than the Indenture Trustee) pursuant
to Section 8.02.
Indemnification and other payments under this Section shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee or the
termination of this Agreement and the Indenture and shall include reasonable
fees and expenses of counsel and expenses of litigation. If the Servicer shall
have made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter collects any of such amounts
from others, such Person shall promptly repay such amounts to the Servicer,
without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer. Any Person (a) into which the Servicer may be merged or
consolidated, (b) resulting from any merger or consolidation to which the
Servicer is a party, or (c) succeeding to the properties and assets of the
Servicer substantially as a whole, which Person (in each of the cases
contemplated by clauses (a)-(c)) executed an agreement of assumption to perform
every obligation of the Servicer hereunder, shall be the successor to the
Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; provided, however, that (i) immediately after giving
effect to such transaction, no Servicer Default and no event which, after notice
or lapse of time, or both, would become a Servicer Default shall have occurred
and be continuing, (ii) the Servicer shall have delivered to the Owner Trustee
and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with,
(iii) the Rating Agency Condition shall have been satisfied with respect to such
transaction and (iv) the Servicer shall have delivered to the Owner Trustee and
the Indenture Trustee an Opinion of Counsel stating that, in the opinion of such
counsel, either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Owner Trustee and the Indenture
Trustee, respectively, in the Receivables and reciting the details of such
filings or (B) no such action shall be necessary to preserve and protect such
interests. Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and
27
compliance with clauses (i), (ii), (iii) and (iv) above shall be conditions to
the consummation of the transactions referred to in clause (a), (b) or (c)
above.
SECTION 7.04. Limitation on Liability of Servicer and Others. Neither the
Servicer nor any of the directors, officers, employees or agents of the Servicer
shall be under any liability to the Issuer, the Noteholders or the Residual
Interestholder, except as provided under this Agreement, for any action taken or
for refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of the Servicer's duties under this Agreement or by reason of
reckless disregard of obligations and duties under this Agreement. The Servicer
and any director, officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its duties to service the Receivables in accordance with this
Agreement and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement and the other Basic
Documents and the rights and duties of the parties to this Agreement and the
other Basic Documents and the interests of the Noteholders under the Indenture
and of the Residual Interestholder under the Trust Agreement.
SECTION 7.05. Resignation of Servicer. Subject to the provisions of Section
7.03, the Person which is the Servicer shall not resign from the obligations and
duties hereby imposed on it as Servicer under this Agreement except upon a
determination that the performance of its duties under this Agreement shall no
longer be permissible under applicable law. Notice of any such determination
permitting the resignation of the Servicer shall be communicated to the Owner
Trustee and the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Owner Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the Indenture Trustee or a successor Servicer shall have
assumed the responsibilities and obligations of the resigning Servicer in
accordance with Section 8.02. In addition, in effecting such resignation, the
resigning Servicer shall cooperate with the successor Servicer, the Indenture
Trustee and the Owner Trustee in effecting the termination of its
responsibilities and rights as 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 it for deposit, or shall thereafter be
received by it with respect to any Receivable. The resigning Servicer shall also
give the successor Servicer access to its records, software, systems, facilities
and employees in order to facilitate the servicing transfer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the Receivable Files and the Servicer's duties to the successor
Servicer and amending this Agreement to reflect
28
such succession as Servicer shall be paid by DFS upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of any such resignation, the Owner Trustee shall give notice thereof
to the Rating Agencies.
ARTICLE VII
Servicer Default
SECTION 8.01. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deliver to the Indenture Trustee for
deposit in any of the Trust Accounts or the Residual Interestholder Distribution
Account any required payment or to direct the Indenture Trustee to make any
required distributions therefrom, which failure continues unremedied for a
period of three Business Days after written notice of such failure is received
by the Servicer from the Owner Trustee or the Indenture Trustee or after
discovery of such failure by the Servicer; or
(b) any failure by the Servicer duly to observe or to perform in any
material respect any other covenant or agreement of the Servicer set forth in
this Agreement or any other Basic Document, which failure shall (i) materially
and adversely affect the rights of the Noteholders or the Residual
Interestholder and (ii) continue unremedied for a period of 60 days after the
date on which written notice of such failure shall have been given (A) to the
Servicer by the Owner Trustee or the Indenture Trustee or (B) to the Servicer,
and to the Owner Trustee and the Indenture Trustee, by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes or by the
Residual Interestholder; or
(c) the occurrence of an Insolvency Event with respect to the Servicer;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture Trustee or the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Servicer (and to the Indenture Trustee and the
Owner Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 7.02 hereof) of the
Servicer under this Agreement. On or after the latest of receipt by the Servicer
of such written notice or the date of termination specified in such notice or
deemed specified pursuant to Section 8.02(d), all authority and power of the
Servicer under this Agreement, whether with respect to the Notes or the
Receivables or otherwise, shall, without further action, pass to and be vested
in the Indenture Trustee or such successor Servicer as may be appointed under
Section 8.02; and, without limitation, the Indenture Trustee and the Owner
Trustee are hereby authorized and empowered to execute and deliver, for the
benefit of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to
29
complete the transfer and endorsement of the Receivables and related documents,
or otherwise. The predecessor Servicer shall cooperate with the successor
Servicer, the Indenture Trustee and the Owner Trustee in effecting the
termination of the responsibilities and rights of the predecessor Servicer under
this Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by the
predecessor Servicer for deposit, or shall thereafter be received by it with
respect to any Receivable. The predecessor Servicer shall also give the
successor Servicer access to its records, software, systems, facilities and
employees in order to facilitate the servicing transfer. All reasonable costs
and expenses (including attorneys' fees) incurred in connection with
transferring the Receivable Files and the Servicer's duties to the successor
Servicer and amending this Agreement to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Default, the Owner Trustee
shall give notice thereof to the Rating Agencies.
The Owner Trustee agrees that if it gives a notice under clause (a) or
clause (b) above, the Owner Trustee shall simultaneously send a copy of such
notice to the Indenture Trustee. The Indenture Trustee agrees that if it gives a
notice under clause (a) or clause (b) above, the Indenture Trustee shall
simultaneously send a copy of such notice to the Owner Trustee.
SECTION 8.02. Appointment of Successor.
(a) Upon the Servicer's receipt of notice of termination pursuant to
Section 8.01 or the Servicer's resignation in accordance with the terms of this
Agreement, the predecessor Servicer shall continue to perform its functions as
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice (subject in each case to
Section 8.02(d)) and, in the case of resignation, until the later of (i) the
date 45 days from the delivery to the Owner Trustee and the Indenture Trustee of
written notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (ii) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Servicer's termination hereunder, the Indenture Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its appointment by a
written assumption in form acceptable to the Owner Trustee and the Indenture
Trustee. In the event that a successor Servicer has not been appointed at the
time when the predecessor Servicer has ceased to act as Servicer in accordance
with this Section, the Indenture Trustee without further action shall
automatically be appointed the successor Servicer and the Indenture Trustee
shall be entitled to the Servicing Fee. Notwithstanding the above, the Indenture
Trustee shall, if it shall be legally unable so to act, appoint or petition a
court of competent jurisdiction to appoint any established institution, having a
net worth of not less than $100,000,000 and whose regular business shall include
the servicing of recreational vehicle receivables, as the successor to the
Servicer under this Agreement.
30
(b) Upon appointment, the successor Servicer (including the 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.
(c) The Servicer may not resign except as contemplated by Section 7.05.
(d) Notwithstanding anything herein to the contrary, any notice of
termination delivered by Noteholders pursuant to Section 8.01 that (i) does not
contain therein a date as of which such termination shall take effect or (ii)
contains such a date of termination, shall be deemed, in the case of clauses (i)
and (ii) to contain a date of termination which is no sooner than the date,
established by the Indenture Trustee by notice to the Servicer, which shall be
the earliest date practicable by which the Indenture Trustee is capable of
assuming the functions of Servicer hereunder.
SECTION 8.03. Repayment of Advances. If the Servicer shall change, the
predecessor Servicer shall be entitled to receive reimbursement for Outstanding
Advances pursuant to Section 5.04 with respect to all Advances made by the
predecessor Servicer.
SECTION 8.04. Notification to Noteholders. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VIII, the
Indenture Trustee shall give prompt written notice thereof to Noteholders and
the Rating Agencies.
SECTION 8.05. Waiver of Past Defaults. The Majority Noteholders may, on
behalf of all Noteholders, waive in writing any default by the Servicer in the
performance of its obligations hereunder and its consequences, except a default
in making any required deposits to or payments from 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 Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables.
(a) If the Pool Balance is less than ten percent (10%) of the Initial Pool
Balance as of the last day of any Collection Period, then the Servicer shall
have the option to purchase all (but not less than all) of the Owner Trust
Estate, other than the Trust Accounts, on any Monthly Payment Date following
such day. To exercise such option, the Servicer shall deposit pursuant to
Section 5.05 in the Collection Account an amount equal to the aggregate of the
Purchase
31
Amounts for the Receivables (provided that if the Obligor of a Receivable is
financially unable to make some or all of the payments on such Receivable, the
Purchase Amount in respect of such Receivable shall be the fair market value of
such Receivable), plus the appraised value of any other property held by the
Trust other than the Trust Accounts (the value of any other property held by the
Trust, other than the Trust Accounts to be determined as of the last day of the
Collection Period preceding such Monthly Payment Date by an appraiser mutually
agreed upon by the Servicer, the Owner Trustee and the Indenture Trustee), and
shall succeed to all interests in and to the Trust. Notwithstanding the
foregoing, the Servicer shall not be permitted to exercise such option unless
the resulting distribution to the Noteholders on such Monthly Payment Date would
be sufficient to pay the sum of the outstanding principal balance of the Notes
plus all accrued and unpaid interest thereon. This Section 9.01 is subject to
the terms and conditions of Section 10.01 of the Indenture.
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the Residual
Interestholder shall succeed to the rights of the Noteholders hereunder and the
Owner Trustee shall succeed to the rights of, and assume the obligations of, the
Indenture Trustee pursuant to this Agreement.
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment. This Agreement may be amended by the Issuer, the
Depositor and the Servicer, with the consent of the Indenture Trustee, but
without the consent of any other Person, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions in
this Agreement or of modifying in any manner the rights of the Noteholders or
Residual Interestholder; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Owner Trustee and the
Indenture Trustee, adversely affect in any material respect the interests of any
Noteholder or the Residual Interestholder.
This Agreement may also be amended from time to time by the Issuer, the
Depositor and the Servicer, with the consent of the Indenture Trustee and the
consent of the Majority Noteholders and the consent of the Residual
Interestholder, 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 Residual Interestholder;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made for
the benefit of the Noteholders or (b) reduce the aforesaid percentage of the
Outstanding Amount of the Notes, the Holders of which are required to consent to
any such amendment, without the consent of the Holders of all of the outstanding
Notes.
32
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to the Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Noteholders or the Residual
Interestholder pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of or the consent to any amendment to this
Agreement, the Owner Trustee and the Indenture Trustee shall be entitled to
receive and rely upon (i) an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement and (ii) the Opinion
of Counsel referred to in Section 10.02(i). The Owner Trustee and the Indenture
Trustee may, but shall not be obligated to, enter into or consent to any such
amendment which affects the Owner Trustee's or the Indenture Trustee's, as
applicable, own rights, duties or immunities under this Agreement or otherwise.
SECTION 10.02. Protection of Title to Trust; Change of Name, Identity,
Corporate Structure or Location of the Depositor, Etc.
(a) The Depositor shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain and
protect the interest of the Issuer and of the Indenture Trustee in the
Receivables and in the proceeds thereof. The Depositor shall deliver (or cause
to be delivered) to the Owner Trustee and the Indenture Trustee file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing.
(b) The Depositor shall not 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, unless it shall
have given the Owner Trustee and the Indenture Trustee at least five days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) The Depositor shall give the Owner Trustee and the Indenture Trustee at
least 60 days' prior written notice of any relocation of its chief executive
office if, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
any such amendment or new financing statement. The Servicer shall at all times
maintain each office from which it shall service Receivables, and its principal
executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such
33
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) The Servicer shall maintain its computer systems so that, from and
after the time of transfer under this Agreement of the Receivables, the
Servicer's master computer records (including any backup archives) that refer to
a Receivable shall indicate clearly the interest of the Issuer and the Indenture
Trustee in such Receivable and that such Receivable is owned by the Issuer and
has been pledged to the Indenture Trustee. Indication of the Issuer's and the
Indenture Trustee's interest in a Receivable shall be deleted from or modified
on the Servicer's computer systems when, and only when, the related Receivable
shall have been paid in full or shall have become a Purchased Receivable.
(f) If at any time the Depositor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in recreational
vehicle receivables to any prospective purchaser, lender or other transferee,
the Servicer shall give to such prospective purchaser, lender or other
transferee computer tapes, records or printouts (including any restored from
backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been transferred to
and is owned by the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents at any
time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee or to the
Indenture Trustee, within five Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer's Certificates furnished before such request indicating removal of
Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee, promptly after the execution and delivery of this Agreement, and of
each amendment hereto and on each Monthly Payment Date occurring in March, an
Opinion of Counsel (which may be an employee of the Servicer) stating that, in
the opinion of such counsel, either (A) all financing statements and
continuation statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Owner Trustee and the Indenture Trustee
in the Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) no such action
shall be necessary to preserve and protect such interest. Each such Opinion of
Counsel 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.
34
(j) The Depositor shall, to the extent required by applicable law, cause
the Notes and Certificates to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 10.03. Notices. All demands, notices, directions, communications
and instructions upon, to, or by the Depositor, the Servicer, the Owner Trustee,
the Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case the Servicer (so long as DFS is the Servicer), to Deutsche Financial
Services Corporation, 655 Maryville Centre Drive, St. Louis, Missouri 63141,
Attention: Senior Vice President/Treasurer or Chief Legal Officer, (b) in the
case of the Depositor, to Deutsche Recreational Asset Funding Corporation, 655
Maryville Centre Drive, St. Louis, Missouri 63141, Attention: President, (c) in
the case of the Issuer or the Owner Trustee, at the Corporate Trust Office with
respect to the Owner Trustee, (d) in the case of the Indenture Trustee, at the
Corporate Trust Office with respect to the Indenture Trustee, (e) in the case of
Fitch, to Fitch IBCA Inc., One State Street Plaza, New York, New York 10004,
Attention: Asset-Backed Securities Surveillance Group, (f) in the case of
Standard & Poor's, to Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., 25 Broadway (15th Floor), New York, New York 10004,
Attention: Asset Backed Surveillance Department and (g) in the case of Moody's,
to Moody's Investors Service, 99 Church Street, New York, New York 10004,
Attention: Moody's ABS Monitoring Group; or, as to each of the foregoing, at
such other address as shall be designated by written notice to the other Persons
listed in this Section.
SECTION 10.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in this Section, in Sections 6.05 and 7.03
of this Agreement and as provided in the provisions of this Agreement concerning
the resignation of the Servicer, this Agreement may not be assigned by the
Depositor or the Servicer. The parties hereto hereby acknowledge and consent to
the mortgage, pledge, assignment and grant of a security interest by the Issuer
to the Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholders of all right, title and interest of the Issuer in, to and under the
Depositor Conveyed Property and/or the assignment of any or all of the Issuer's
rights under this Agreement to the Indenture Trustee.
SECTION 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Depositor, the Servicer, the Issuer,
the Owner Trustee, the Indenture Trustee, the Noteholders and the Residual
Interestholder, and, except as expressly provided in this Agreement, nothing in
this Agreement shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the Owner Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
SECTION 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
35
SECTION 10.07. Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.08. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 10.09. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE PERFECTION (AND THE EFFECT OF
PERFECTION OR NON-PERFECTION) OF THE INTERESTS OF ANY PERSON IN CONVEYED
PROPERTY ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
SECTION 10.10. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the Servicer and the Depositor shall not
acquiesce, petition or otherwise invoke or cause the Issuer to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer. Notwithstanding any prior termination of this
Agreement, the Servicer and the Issuer shall not acquiesce, petition or
otherwise invoke or cause the Depositor to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Depositor under any federal or state bankruptcy, insolvency or similar law,
or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Depositor or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Depositor.
SECTION 10.11. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Norwest Bank Minnesota, National
Association, not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer and in no event shall Norwest Bank Minnesota, National
Association, in its individual capacity or, except as expressly provided in the
Trust Agreement, as beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of its
duties or obligations hereunder or in the performance of any duties or
36
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.
(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 the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
SECTION 10.12. Waiver. Each of DFS, the Depositor, the Trust, the Owner
Trustee and the Indenture Trustee hereby (a) acknowledges that Mayer, Brown &
Platt represents (i) DFS, the Transferor, and the Depositor in connection with
the transactions contemplated by the Basic Documents, (ii) Affiliates of the
Transferor, DFS and the Depositor in other matters, (iii) underwriters of the
Notes (and Affiliates of such underwriters) in other matters, (iv) the
institutions which are the Indenture Trustee and the Owner Trustee (and
Affiliates of such institutions) in other matters, and (v) the Specified
Accountants in other matters, and (b) waives any conflict of interest relating
thereto. Notwithstanding any other provision of this Agreement, Mayer, Brown &
Platt is entitled to rely on this Section.
SECTION 10.13. Separate Corporate Existence. The Depositor hereby
acknowledges that the Trust is entering into the transactions contemplated by
the Basic Documents in reliance upon the Depositor's identity as a legal entity
separate from DFS and the Transferor. Therefore, the Depositor shall take all
reasonable steps to make it apparent to third Persons that each of DFS and the
Transferor is an entity with assets and liabilities distinct from those of the
Depositor and any other Affiliate and that the Depositor is not a division of
DFS or the Transferor or any other Person. Without limiting the foregoing, the
Depositor shall (and shall cause each of DFS and the Transferor to) operate and
conduct its business and otherwise act in a manner which is consistent with the
following:
(a) The Depositor shall maintain its own stationery and other business
forms separate from those of any other Person (including DFS and the Transferor)
and shall conduct business in its own name.
(b) The Depositor shall not need to maintain any office space of its own
(apart from the office space used by Servicer) as part of its operations. If the
Depositor utilizes any office space, such office space shall be clearly
demarcated as being allocated to Depositor.
(c) DFS or the Transferor may issue consolidated financial statements that
shall include the Depositor, but such financial statements shall contain a
footnote to the effect that DFS contributed certain Receivables to the
Transferor, the Transferor then contributed the Receivables to the Depositor and
the Depositor in turn contributed the Receivables to the Trust. Separate
financial statements shall also be prepared for the Depositor. In addition to
the aforementioned footnote to any consolidated financial statement, DFS, the
Transferor and the
37
Depositor shall take certain actions to disclose publicly the Depositor's
separate existence and the transactions contemplated hereby, including, without
limitation, through the filing of UCC financing statements. Neither DFS, the
Transferor nor the Depositor has concealed or shall conceal from any interested
party any transfers contemplated by the Basic Documents, although Obligors shall
not be affirmatively informed in the first instance of the transfer of their
obligations.
(d) The Transferor has caused and shall continue to cause an Independent
Director to be elected to the board of directors of the Depositor, and the
Depositor shall compensate the Independent Director.
(e) The Depositor shall not have its own employees, and the Depositor's
business relating to the Receivables shall be primarily conducted through DFS as
Servicer. However, any allocations of direct, indirect or overhead expenses for
items shared among the Depositor, the Transferor and DFS that are not included
as part of the Servicing Fee are and shall be made among such entities to the
extent practical on the basis of actual use or value of services rendered and
otherwise on a basis reasonably related to actual use or the value of services
rendered.
(f) DFS, the Depositor and the Transferor shall maintain their assets and
liabilities in such a manner that it is not costly or difficult to segregate,
ascertain or otherwise identify the individual assets and liabilities of the
Depositor from those of the others or from those of any other Person, including
any other subsidiary or other Affiliate of DFS. Except as set forth below, the
Depositor shall maintain its own books of account and corporate records separate
from DFS, the Transferor, and any other subsidiary or other Affiliate of DFS.
The Depositor shall not commingle or pool its funds (or other assets) or
liabilities with those of DFS, the Transferor, or any other subsidiary or
Affiliate of DFS except as specifically provided in this Agreement with respect
to the temporary commingling of collections of the Receivables and except with
respect to the retention by DFS, in its capacity as Servicer, of the books and
records pertaining to the Receivables. However, DFS shall not generally make the
books and records relating to the Receivables available to any of the creditors
of DFS or other interested persons, and in the rare instance when it does so,
DFS simultaneously also shall provide the marked computer records and shall make
such books and records available for the sole purpose of permitting creditors
and other interested parties of DFS to verify the existence of DFS and
performance of its duties as Servicer. The Depositor shall not maintain joint
bank accounts or other depository accounts to which DFS, the Transferor, or any
other subsidiary or Affiliate of DFS (other than DFS solely in its capacity as
Servicer) has independent access.
(g) Each of DFS and the Transferor, on the one hand, and the Depositor, on
the other hand, shall strictly observe corporate formalities, including with
respect to its dealings with the other. Specifically, no transfer of assets
between DFS and the Transferor on the one
38
hand, and the Depositor, on the other hand, shall be made without adherence to
corporate formalities.
(h) Neither the Depositor, on the one hand, or DFS, the Transferor, or any
other subsidiary or other Affiliate of DFS, on the other hand, shall be, or
shall hold itself out to be, responsible for the debts of the other, or, except
as provided in this Agreement with respect to the duties of the Servicer, the
decisions or actions respecting the daily business and affairs of the other,
except as contemplated by the expense reimbursement and indemnification
provisions of the Basic Documents and any underwriting agreement executed in
connection therewith.
(i) All distributions made by the Depositor to the Transferor as its sole
shareholder shall be made in accordance with applicable law.
(j) Any other transactions between DFS and the Depositor or DFS and the
Transferor permitted by (although not expressly provided for in the Basic
Documents) shall be fair and equitable to DFS, the Depositor and the Transferor,
shall be the type of transaction that would be entered into by a prudent Person
in the position of DFS, the Depositor or the Transferor vis a vis each other,
and shall be on terms that are at least favorable as may be obtained from a
Person who is not DFS, the Depositor or the Transferor.
(k) The Depositor is not named, and has not entered into any agreement to
be named, directly or indirectly, as a direct or contingent beneficiary or loss
payee on any insurance policy covering the property of DFS, the Transferor or
any other subsidiary or other Affiliate of DFS except for an insurance policy
with respect to the liability of directors and officers maintained by Deutsche
Bank AG for the benefit of its direct and indirect subsidiaries.
SECTION 10.14. Submission to Jurisdiction. Each of the parties hereto
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement or any other Basic Document or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail),
39
postage prepaid, to such Person at its address set forth in Section 10.03 or at
such other address notified to the other parties to this Agreement pursuant
thereto; and
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction.
SECTION 10.15. Tax Treatment. The parties hereto agree to treat (and DFS
shall cause the Transferor to treat) the Trust and the Notes for tax purposes in
a manner which is consistent with the applicable tax treatment specified in the
other Basic Documents.
[SIGNATURES FOLLOW]
40
IN WITNESS WHEREOF, the parties hereto have caused this Transfer and
Servicing Agreement to be duly executed as of the day and year first above
written.
DISTRIBUTION FINANCIAL SERVICES RV TRUST 1999-3
By: Norwest Bank Minnesota, National Association, not in its
individual capacity but solely as Owner Trustee on behalf of
the Trust
By: /s/ Marianna C. Stershic
------------------------
Name: Marianna C. Stershic
------------------------
Title: Assistant Vice-President
------------------------
DEUTSCHE RECREATIONAL ASSET FUNDING
CORPORATION, as Depositor
By: /s/ Richard C. Goldman
----------------------------
Richard C. Goldman
Vice President
By: /s/ Richard H. Schumacher
----------------------------
Richard H. Schumacher
Vice President
DEUTSCHE FINANCIAL SERVICES CORPORATION,
as Servicer
By: /s/ Richard C. Goldman
----------------------------
Richard C. Goldman
Senior Vice President
By: /s/ Richard H. Schumacher
----------------------------
Richard H. Schumacher
Senior Vice President
S-1
Acknowledged, accepted and agreed to
as of the day and year first above written:
The Chase Manhattan Bank,
not in its individual capacity but
solely as Indenture Trustee
By: /s/ JoAnn Manieri
------------------------------
Name: JoAnn Manieri
---------------------------
Title: Assistant Vice President
---------------------------
S-2
APPENDIX A
DEFINITIONS
"Accelerated Principal Distribution Amount" means, with respect to any
Monthly Payment Date, the portion, if any, of the Total Distribution Amount for
the related Collection Period that remains after the applications set forth in
clauses (A) through (E) of Section 5.06(a)(ii) of the Transfer and Servicing
Agreement.
"Act" has the meaning specified in Section 11.03(a) of the Indenture.
"Advance" means the amount of interest, as of the close of business on the
last day of a Collection Period, which the Servicer advances on the Receivables
pursuant to Section 5.04 of the Transfer and Servicing Agreement.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
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.
"Amount Financed" means with respect to a Receivable, the amount advanced
toward the purchase price of the Financed Vehicle and any related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate of
finance charges stated in the related Contract.
"Authorized Officer" means, with respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on a signature resolution, an incumbency
certificate or other similar certificate delivered by the Owner Trustee to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Basic Documents" means the Transfer and Servicing Agreement, the DFS/Ganis
Transfer Agreement, the Ganis/Depositor Transfer Agreement, the Indenture, the
Trust Agreement and the Note Depository Agreement and the other documents and
certificates delivered in connection therewith.
"Benefit Plan" has the meaning assigned to such term in Section 11.13 of
the Trust Agreement.
"Book-Entry Notes" 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 any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in the State of New York are
authorized or obligated by law, regulation or executive order to remain closed.
"Cedel" means Cedelbank, a corporation organized under the laws of the
Grand Duchy of Luxembourg.
"Cedel Item" means a "security" as defined in Section 8-102(a)(15) of the
UCC that (i) is a debt or equity security and (ii) is capable of being
transferred to the Indenture Trustee's account at Cedel pursuant to Section 5.01
of the Transfer and Servicing Agreement.
"Certificated Item" means a "certificated security" as defined in
Section 8-102(a)(4) of the UCC.
"Class" means any one of the classes of Notes, i.e., 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 A-6 Notes, the Class B Notes or the Class C Notes.
"Class A-1 Interest Rate" means 5.324% per annum (computed on the basis of
the actual number of days in each Interest Accrual Period divided by 360).
"Class A-2 Interest Rate" means 5.970% per annum (computed on the basis of
a 360-day year consisting of twelve 30-day months).
"Class A-3 Interest Rate" means 6.430% per annum (computed on the basis of
a 360-day year consisting of twelve 30-day months).
"Class A-4 Interest Rate" means 6.650% per annum (computed on the basis of
a 360-day year consisting of twelve 30-day months).
"Class A-5 Interest Rate" means 6.760% per annum (computed on the basis of
a 360-day year consisting of twelve 30-day months).
"Class A-6 Interest Rate" means 6.880% per annum (computed on the basis of
a 360-day year consisting of twelve 30-day months).
"Class B Interest Rate" means 7.170% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).
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"Class C Interest Rate" means 7.920% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note is
registered in the Note Register.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note is
registered in the Note Register.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note is
registered in the Note Register.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note is
registered in the Note Register.
"Class A-5 Noteholder" means the Person in whose name a Class A-5 Note is
registered in the Note Register.
"Class A-6 Noteholder" means the Person in whose name a Class A-6 Note is
registered in the Note Register.
"Class B Noteholder" means the Person in whose name a Class B Note is
registered in the Note Register.
"Class C Noteholder" means the Person in whose name a Class C Note is
registered in the Note Register.
"Class A Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes, Class A-5 Notes and Class A-6 Notes.
"Class A-1 Notes" means the 5.324% Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A to the Indenture.
"Class A-2 Notes" means the 5.970% Asset Backed Notes, Class A-2,
substantially in the form of Exhibit A to the Indenture.
"Class A-3 Notes" means the 6.430% Asset Backed Notes, Class A-3,
substantially in the form of Exhibit A to the Indenture.
"Class A-4 Notes" means the 6.650% Asset Backed Notes, Class A-4,
substantially in the form of Exhibit A to the Indenture.
"Class A-5 Notes" means the 6.760% Asset Backed Notes, Class A-5,
substantially in the form of Exhibit A to the Indenture.
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"Class A-6 Notes" means the 6.880% Asset Backed Notes, Class A-6,
substantially in the form of Exhibit A to the Indenture.
"Class B Notes" means the 7.170% Asset Backed Notes, Class B, substantially
in the form of Exhibit A to the Indenture.
"Class C Notes" means the 7.920% Asset Backed Notes, Class C, substantially
in the form of Exhibit A to the Indenture.
"Class A-1 Stated Maturity Date" means the Monthly Payment Date in August
2000.
"Class A-2 Stated Maturity Date" means the Monthly Payment Date in January
2006.
"Class A-3 Stated Maturity Date" means the Monthly Payment Date in November
2007.
"Class A-4 Stated Maturity Date" means the Monthly Payment Date in March
2011.
"Class A-5 Stated Maturity Date" means the Monthly Payment Date in June
2012.
"Class A-6 Stated Maturity Date" means the Monthly Payment Date in November
2016.
"Class B Stated Maturity Date" means the Monthly Payment Date in March
2018.
"Class C Stated Maturity Date" means the Monthly Payment Date in September
2020.
"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.
"Clearing Corporation" has the meaning specified in Section 8-102(a)(5) of
the UCC.
"Clearing Corporation Item" means securities which are in the custody of or
maintained on the books of a Clearing Corporation or a nominee subject to the
control of a Clearing Corporation and, if they are Certificated Items in
registered form, properly endorsed to or registered in the name of the Clearing
Corporation or such nominee.
"Closing Date" means July 29, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, and Treasury
Regulations promulgated thereunder.
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"Collateral" has the meaning specified in the Granting Clause of the
Indenture.
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a) of the Transfer and Servicing Agreement.
"Collection Period" means a calendar month. Any amount stated as of the
last day of a Collection Period or as of the first day of a Collection Period
shall give effect to the following calculations as determined as of the close of
business on such last day: (1) all applications of collections, (2) all Advances
and reductions of Outstanding Advances and (3) all distributions to be made on
the following Monthly Payment Date.
"Commission" has the meaning specified in Section 1.02 of the Indenture.
"Computer Tape" means the computer tape, containing information on the DFS
Receivables and the Transferor Receivables, delivered by DFS to the Issuer on or
prior to the Closing Date.
"Contract" means a retail installment sale contract or installment loan
contract relating to a recreational vehicle.
"Corporate Trust Office" or "Corporate Trust Administration Department"
means (i) the office of the Indenture Trustee at which at any particular time
its corporate trust business shall be principally administered, which office at
the date of the execution of the Indenture is located at 450 West 33rd Street
(14th Floor), New York, New York 10001; or at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders
and the Depositor, or the principal corporate trust office of any successor
Indenture Trustee (of which address such successor Indenture Trustee shall
notify the Noteholders and the Depositor) and (ii) with respect to the Owner
Trustee, the office of the Owner Trustee located at Sixth & Marquette,
Minneapolis, Minnesota 55479-0070 or at such other address outside of New York
as the Owner Trustee may designate by notice to the Residual Interestholder, the
Indenture Trustee, the Noteholders, the Residual Interestholder and the
Depositor, or the principal corporate trust office of any successor Owner
Trustee (of which address such successor Owner Trustee shall notify the Residual
Interestholder, the Indenture Trustee and the Depositor).
"Cutoff Date" means July 1, 1999.
"Dealer" means the dealer which sold a Financed Vehicle to an Obligor and,
if applicable, which originated and assigned the related Receivable to DFS or
the Transferor, as the case may be.
"Dealer Agreement" means an agreement between a Dealer and DFS or the
Transferor, as the case may be, pursuant to which DFS or the Transferor, as the
case may be, purchased one or more Receivables.
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"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 a Receivable as to which (a) all or any part
of a scheduled payment is 120 days past due and the Servicer has not repossessed
the related Financed Vehicle or (b) the Servicer has repossessed and liquidated
the related Financed Vehicle, whichever occurs first or (c) without duplication,
any other Receivable charged off under the Servicer's credit and collection
policy.
"Definitive Notes" has the meaning specified in Section 2.10 of the
Indenture.
"Depositor" means Deutsche Recreational Asset Funding Corporation, in its
capacity as depositor under the Transfer and Servicing Agreement, and its
successors in interest.
"Depositor Conveyed Property" has the meaning specified in Section 2.01 of
the Transfer and Servicing Agreement.
"Determination Date" means, with respect to any Monthly Payment Date and
the Collection Period immediately preceding such Monthly Payment Date, the
Business Day immediately preceding such Monthly Payment Date.
"DFS" means Deutsche Financial Services Corporation, a Nevada corporation,
or its successors in interest.
"DFS Conveyed Property" has the meaning specified in Section 2.01 of the
DFS/Ganis Transfer Agreement.
"DFS Receivables" has the meaning specified in Section 2.01 of the
DFS/Ganis Transfer Agreement.
"DFS/Ganis Transfer Agreement" means the DFS/Ganis Transfer Agreement dated
as of July 1, 1999 between DFS and Ganis, as amended, amended and restated or
otherwise modified from time to time.
"Eligible Deposit Account" means either (1) a segregated account with an
Eligible Institution or (2) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution shall have a credit rating from each
Rating Agency in one of its generic rating categories that signifies investment
grade.
"Eligible Institution" means (1) the corporate trust department of the
Indenture Trustee or the Owner Trustee, or (2) a depository institution
organized under the laws of the United States
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of America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), (i) which has either (A) a long-term
unsecured debt rating of AAA by Standard & Poor's, AAA by Fitch and Aaa by
Moody's or (B) a certificate of deposit rating of A-1+ by Standard & Poor's, F1+
by Fitch and P-1 by Moody's, or any other long-term, short-term or certificate
of deposit rating acceptable to the Rating Agencies and (ii) whose deposits are
insured by the FDIC. If so qualified, the Indenture Trustee or the Owner Trustee
may be considered an Eligible Institution for the purposes of clause (2) of this
definition.
"Eligible Investments" means book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(1) direct obligations of, and obligations fully guaranteed as to the full
and timely payment by, the United States of America;
(2) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) thereof shall have a credit rating
from each of the Rating Agencies in the highest investment category granted
thereby;
(3) commercial paper having, at the time of the investment or contractual
commitment to invest therein, a rating from each of the Rating Agencies in the
highest investment category granted thereby;
(4) investments in money market funds having a rating from each of the
Rating Agencies in the highest investment category granted thereby (including
funds for which the Indenture Trustee or the Owner Trustee or any of their
respective Affiliates is investment manager or advisor);
(5) bankers' acceptances issued by any depository institution or trust
company referred to in clause (2) above;
(6) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
described in clause (2);
(7) repurchase obligations with respect to any security or whole loan,
entered into with (i) a depository institution or trust company (acting as
principal) described in clause (2)
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above (except that the rating referred to in the proviso in such clause (b)
shall be A-1 or higher in the case of Standard & Poor's) (such depository
institution or trust company being referred to in this definition as a
"financial institution"), (ii) a broker/dealer (acting as principal) registered
as a broker or dealer under Section 15 of the Exchange Act (a "broker/dealer")
the unsecured short-term debt obligations of which are rated F1+ by Fitch, at
least A-1 by Standard & Poor's and P-1 by Moody's at the time of entering into
such repurchase obligation (a "rated broker/dealer"), (iii) an unrated
broker/dealer (an "unrated broker/dealer"), acting as principal, that is a
wholly-owned subsidiary of a non-bank holding company the unsecured short-term
debt obligations of which are rated F1+ by Fitch, at least A-1 by Standard &
Poor's and P-1 by Moody's at the time of entering into such repurchase
obligation (a "Rated Holding Company") or (iv) an unrated subsidiary (a
"Guaranteed Counterparty"), acting as principal, that is a wholly-owned
subsidiary of a direct or indirect parent Rated Holding Company, which
guarantees such subsidiary's obligations under such repurchase agreement;
provided that the following conditions are satisfied:
(A) the aggregate amount of funds invested in repurchase obligations
of a financial institution, a rated broker/dealer, an unrated broker/dealer
or Guaranteed Counterparty in respect of which the Standard & Poor's
unsecured short-term ratings are A-1 (in the case of an unrated
broker/dealer or Guaranteed Counterparty, such rating being that of the
related Rated Holding Company) shall not exceed 20% of the sum of the then
outstanding principal balance of the Notes (there being no limit on the
amount of funds that may be invested in repurchase obligations in respect
of which such Standard & Poor's rating is A-1+ (in the case of an unrated
broker/dealer or Guaranteed Counterparty, such rating being that of the
related Rated Holding Company));
(B) in the case of the Reserve Account, the rating from Standard &
Poor's in respect of the unsecured short-term debt obligations of the
financial institution, rated broker/dealer, unrated broker/dealer or
Guaranteed Counterparty (in the case of an unrated broker/dealer or
Guaranteed Counterparty, such rating being that of the related Rated
Holding Company) shall be A-1+;
(C) the repurchase obligation must mature within 30 days of the date
on which the Indenture Trustee or the Issuer, as applicable, enters into
such repurchase obligation;
(D) the repurchase obligation shall not be subordinated to any other
obligation of the related financial institution, rated broker/dealer,
unrated broker/dealer or Guaranteed Counterparty;
(E) the collateral subject to the repurchase obligation is held, in
the appropriate form, by a custodial bank on behalf of the Indenture
Trustee or the Issuer, as applicable;
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(F) the repurchase obligation shall require that the collateral
subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a Guaranteed
Counterparty, the following conditions shall also be satisfied:
(i) the Indenture Trustee or the Issuer, as applicable, shall
have received an opinion of counsel (which may be in- house counsel)
to the effect that the guarantee of the related Rated Holding Company
is a legal, valid and binding agreement of the Rated Holding Company,
enforceable in accordance with its terms, subject as to enforceability
to bankruptcy, insolvency, reorganization and moratorium or other
similar laws affecting creditors' rights generally and to general
equitable principles;
(ii) the Indenture Trustee or the Issuer, as applicable, shall
have received (x) an incumbency certificate for the signer of such
guarantee, certified by an officer of such Rated Holding Company and
(y) a resolution, certified by an officer of the Rated Holding
Company, of the board of directors (or applicable committee thereof)
of the Rated Holding Company authorizing the execution, delivery and
performance of such guarantee by the Rated Holding Company;
(iii) the only conditions to the obligation of such Rated Holding
Company to pay on behalf of the Guaranteed Counterparty shall be that
the Guaranteed Counterparty shall not have paid under such repurchase
obligation when required (it being understood that no notice to,
demand on or other action in respect of the Guaranteed Counterparty is
necessary) and that the Indenture Trustee or the Issuer shall make a
demand on the Rated Holding Company to make the payment due under such
guarantee;
(iv) the guarantee of the Rated Holding Company shall be
irrevocable with respect to such repurchase obligation and shall not
be subordinated to any other obligation of the Rated Holding Company;
and
(v) each of Standard & Poor's, Fitch and Moody's has confirmed in
writing to the Indenture Trustee or Issuer, as applicable, that it has
reviewed the form of the guarantee of the Rated Holding Company and
has determined that the issuance of such guarantee shall not result in
the downgrade or withdrawal of the ratings assigned to the Notes.
(H) the repurchase obligation shall require that the repurchase
obligation be overcollateralized and shall provide that, upon any failure
to maintain such overcollateralization, the repurchase obligation shall
become due and payable, and unless the repurchase obligation is satisfied
immediately, the collateral subject to the
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repurchase agreement shall be liquidated and the proceeds applied to
satisfy the unsatisfied portion of the repurchase obligation;
(8) any other investment with respect to which the Issuer or the Servicer
has received written notification from the Rating Agencies that the acquisition
of such investment as an Eligible Investment shall not result in a withdrawal or
downgrading of the ratings on the Notes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Euroclear Item" means a "security" as defined in Section 8-102(a)(15) of
the UCC that (i) is a debt or equity security and (ii) is capable of being
transferred to the Indenture Trustee's account at Euroclear pursuant to Section
5.01 of the Transfer and Servicing Agreement.
"Event of Default" has the meaning specified in Section 5.01 of the
Indenture.
"Excess Overcollateralization Amount" means, with respect to each Monthly
Payment Date, the excess, if any, of (i) the Overcollateralization Amount over
(ii) the Targeted Overcollateralization Amount (after application of payments in
reduction of the principal amounts of the Notes on such Monthly Payment Date).
"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, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"Expenses" has the meaning specified in Section 8.02 of the Trust
Agreement.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
organization.
"Fidelity Bond" means a fidelity bond to be maintained by the Servicer
pursuant to Section 4.15 of the Transfer and Servicing Agreement.
"Final Certification" has the meaning specified in Section 3.02 of the
Transfer and Servicing Agreement.
"Final Scheduled Maturity Date" means the Monthly Payment Date immediately
following the latest scheduled maturity date of the Receivables.
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"Final Scheduled Payment Date" means, with respect to any Class of Notes,
the Stated Maturity Date of such Class of Notes.
"Financed Vehicle" means a new or used recreational vehicle, together with
all accessions thereto, securing an Obligor's indebtedness under the respective
Receivable.
"Fitch" means Fitch IBCA, Inc. or its successor.
"Ganis" means Ganis Credit Corporation, a Delaware corporation, or its
successors in interest.
"Ganis/Depositor Transfer Agreement" means the Ganis/Depositor Transfer
Agreement dated as of July 1, 1999 between Ganis and the Depositor, as the same
may be amended, amended and restated or otherwise modified from time to time.
"Government Item" means a security (other than a security issued by the
Government National Mortgage Association) issued or guaranteed by the United
States of America or an agency or instrumentality thereof representing a full
faith and credit obligation of the United States of America and, with respect to
each of the foregoing, that is maintained in book-entry on the records of a
Federal Reserve Bank.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and a right of set-off against 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.
"Holder" means the Person in whose name a Note is registered on the Note
Register.
"Indemnified Parties" shall have the meaning specified in Section 8.02 of
the Trust Agreement.
"Indenture" means the Indenture dated as of July 1, 1999 between the Issuer
and the Indenture Trustee, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"Indenture Trustee" means The Chase Manhattan Bank, a New York banking
corporation, as Indenture Trustee under the Indenture, or any successor
Indenture Trustee under the Indenture.
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"Independent" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor on the
Notes, the Depositor and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Depositor or any Affiliate
of any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Depositor 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
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Order,
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.
"Independent Director" has the meaning specified in the articles of
incorporation of the Depositor.
"Initial Pool Balance" means $374,531,023.
"Insolvency Event" means, with respect to a specified Person, (1) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (2)
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.
"Instrument" has the meaning specified in Section 9-105(1)(i) of the UCC.
"Insurance Policy" means, with respect to a Receivable, any insurance
policy benefiting the holder of the Receivable providing loss or physical
damage, credit life, credit disability, theft, mechanical breakdown or similar
coverage with respect to the Financed Vehicle or the Obligor.
"Interest Accrual Period" means the period from (and including) the
immediately preceding Monthly Payment Date (or in the case of the first Monthly
Payment Date, from and
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including the Closing Date) to and including the day preceding the applicable
Monthly Payment Date.
"Interest Rate" means the interest rate for any one or more of the Classes
of Notes, or collectively for all Classes of Notes, in each case as the context
requires.
"Investment Earnings" means the realized investment earnings (net of losses
and investment expenses) on amounts on deposit in the Trust Accounts.
"Issuer" means Distribution Financial Services RV Trust 1999-3, a New York
common law trust, until a successor replaces it and, thereafter, means the
successor and, for purposes of any provision contained herein and required by
the TIA, each other obligor on the Notes.
"Issuer Order" or "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to a Receivable by operation of law as a result of any act or
omission by the related Obligor.
"Lien Certificate" means, with respect to a Financed Vehicle, an original
certificate of title, certificate of lien or other notification issued by the
Registrar of Titles of the applicable State to a secured party which indicates
that the lien of the secured party on the Financed Vehicle is recorded on the
original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" means only a certificate or notification issued to a secured party
by such Registrar of Titles.
"Liquidation Proceeds" means, with respect to any Defaulted Receivable, the
monies collected in respect thereof, from whatever source, on such Defaulted
Receivable during the Collection Period in which such Receivable became a
Defaulted Receivable, net of the sum of any amounts of expenses incurred by the
Servicer in connection with such liquidation and any amounts required by law to
be remitted to the Obligor on such Defaulted Receivable.
"Majority Noteholders" means the Holders of Notes representing not less
than a majority of the Outstanding Amount of the Notes.
"Monthly Payment Date" means, with respect to each Collection Period, the
15th day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on August 16, 1999.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Note" means any Class A Note, Class B Note or Class C Note.
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"Note Depository Agreement" means the agreement dated the Closing Date
among the Trust, the Indenture Trustee, and The Depository Trust Company, as the
initial Clearing Agency, relating to the Notes, as the same may be amended,
amended and restated or otherwise modified from time to time.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01 of the Transfer and
Servicing Agreement.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the beneficial 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 Pool Factor" means, with respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit decimal
figure equal to the outstanding principal balance of such Class of Notes (after
giving effect to any reductions thereof to be made on the immediately following
Monthly Payment Date) divided by the original outstanding principal balance of
such Class of Notes. The Note Pool Factor shall be 1.0000000 as of the Closing
Date; thereafter, the Note Pool Factor shall decline to reflect reductions in
the outstanding principal balance of such Class of Notes.
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.04 of the Indenture.
"Noteholder" means the Person in whose name a Note is registered on the
Note Register.
"Noteholders' Distributable Amount" means, with respect to any Monthly
Payment Date, the sum of the Noteholders' Monthly Principal Distributable Amount
and the Noteholders' Interest Distributable Amount for such Monthly Payment
Date.
"Noteholders' Excess Distributable Amount" means, with respect to each
Monthly Payment Date, the lesser of (i) the Accelerated Principal Distribution
Amount and (ii) the amount, if any, necessary after application of the
Noteholders' Regular Principal Distribution Amount for such Monthly Payment
Date, to reduce the aggregate principal amount of the Notes so that the
Overcollateralization Amount shall equal the Targeted Overcollateralization
Amount (after application of payments in reduction of the aggregate principal
amount of the Notes on such Monthly Payment Date).
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Monthly Payment Date, the result of (a) the excess of the Noteholders' Interest
Distributable Amount for the immediately preceding Monthly Payment Date, over
the amount in respect of interest that is actually deposited in the Note
Distribution Account on such immediately preceding Monthly Payment Date, plus
(b) interest on the amount of interest due but not paid to Noteholders on the
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preceding Monthly Payment Date, to the extent permitted by law, at the
respective Interest Rates borne by each Class of the Notes for the related
Interest Accrual Period.
"Noteholders' Interest Distributable Amount" means, with respect to any
Monthly Payment Date, the sum of the Noteholders' Monthly Interest Distributable
Amount for such Monthly Payment Date and the Noteholders' Interest Carryover
Shortfall for such Monthly Payment Date. For all purposes of the Transfer and
Servicing Agreement and the other Basic Documents, interest with respect to the
Notes shall be computed on the basis of twelve 30-day months in a 360-day year
except for the Class A-1 Notes which shall be calculated on the basis of the
actual number of days in a year divided by 360.
"Noteholders' Monthly Interest Distributable Amount" means, with respect to
any Monthly Payment Date, interest accrued for the related Interest Accrual
Period on each Class of Notes at the respective Interest Rate for such Class on
the outstanding principal balance of the Notes of such Class, which outstanding
principal balance shall be calculated as of the immediately preceding Monthly
Payment Date (or, in the case of the first Monthly Payment Date, as of the
Closing Date), after giving effect to all payments in reduction of the aggregate
principal amount of the Notes of such Class on or prior to such immediately
preceding Monthly Payment Date.
"Noteholders' Monthly Principal Distributable Amount" means, with respect
to any Monthly Payment Date, the lesser of (i) the sum of the Regular Principal
Distribution Amount plus the Accelerated Principal Distribution Amount for such
Monthly Payment Date and (ii) the amount, if any, necessary to reduce the
aggregate principal amount of the Notes so that the Overcollateralization Amount
shall equal the Targeted Overcollateralization Amount after application of
payments for such Monthly Payment Date in reduction of the aggregate principal
amount of the Notes; provided that on and after the Stated Maturity Date for any
Class or Classes of Notes, the Noteholders' Monthly Principal Distributable
Amount shall be calculated as an amount which is not less than the amount
required to reduce the aggregate principal amount of the Notes of such Class or
Classes to zero.
"Noteholders' Regular Principal Distributable Amount" means, with respect
to each Monthly Payment Date, the lesser of (i) the Regular Principal
Distribution Amount and (ii) the amount, if any, necessary to reduce the
aggregate principal amount of the Notes so that the Overcollateralization Amount
shall equal the Targeted Overcollateralization Amount after application of
payments in reduction of the aggregate principal amount of the Notes on such
Monthly Payment Date; provided that on and after the Stated Maturity Date for
any Class or Classes of Notes, the Noteholders' Regular Principal Distributable
Amount shall be calculated as an amount which is not less than the amount
required to reduce the aggregate principal amount of the Notes of such Class or
Classes to zero.
"Notes" means the Class A Notes, the Class B Notes and the Class C Notes.
A-15
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01 of the Indenture,
and delivered to the Indenture Trustee and, with respect to any other Basic
Document, means a certificate signed by (i) any vice president and (ii) the
president, treasurer, assistant treasurer, secretary or assistant secretary of
the Servicer (or any other Person specified in any such Basic Document as
delivering an Officer's Certificate). Unless otherwise specified, any reference
in the Indenture to an Officer's Certificate shall be to an Officer's
Certificate signed by any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in the Indenture, be an employee of or
counsel to the Issuer, the Servicer, the Transferor or the Depositor and who
shall be satisfactory to the Indenture Trustee, and which opinion or opinions
shall be addressed to the Indenture Trustee as Indenture Trustee, shall comply
with any applicable requirements of Section 11.01 of the Indenture and shall be
in form satisfactory to the Indenture Trustee.
"Original Trust Agreement" is defined in the preamble to the Trust
Agreement.
"Outstanding" means, as of any date of determination, all Notes theretofore
authenticated and delivered under the Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to the Indenture or provision for such notice
has been made, satisfactory to the Indenture Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the 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 under any Basic
Document, (x) Notes owned by the Issuer, any other obligor upon the Notes,
the Depositor, the Transferor or any Affiliate of any of the foregoing
Persons shall be disregarded and deemed not to be Outstanding, except that,
in determining whether the Indenture Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes that the
A-16
Indenture Trustee knows to be so owned shall be so disregarded (Notes so
owned that have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee
is not the Issuer, any other obligor upon the Notes, the Depositor, the
Transferor or any Affiliate of any of the foregoing Persons), and (y)
clause (ii) of this definition of Outstanding shall be disregarded;
provided further, that when monies referred to in clause (ii) of this
definition are payable to Noteholders, then the related Notes shall be
deemed to be Outstanding until the principal balances of such Notes shall
have been reduced to zero.
"Outstanding Amount" means the aggregate principal amount of all Notes, or
Class of Notes, as applicable, Outstanding at the date of determination.
"Outstanding Advances" on the Receivables means the sum, as of the close of
business on the last day of a Collection Period, of all Advances as reduced as
provided in Section 5.04 of the Transfer and Servicing Agreement.
"Overcollateralization Amount" means, with respect to any Monthly Payment
Date, the amount, if any, by which the Pool Balance as of the end of the related
Collection Period exceeds the aggregate Outstanding Amount of the Notes.
"Owner Trust Estate" means all right, title and interest of the Trust in
and to the property and rights assigned to the Trust pursuant to Article II of
the Transfer and Servicing Agreement, all funds on deposit from time to time in
the Trust Accounts and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the Transfer
and Servicing Agreement.
"Owner Trustee" means Norwest Bank Minnesota, 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 thereunder.
"Paying Agent" means 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 Collection Account and the Note Distribution Account,
including payments of principal of or interest on the Notes on behalf of the
Issuer.
"Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
A-17
"Pool Balance" means, as of the close of business on the last day of a
Collection Period, the aggregate Principal Balance of the Receivables as of such
day (excluding Purchased Receivables and Defaulted Receivables).
"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 2.05 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, with respect to a Receivable, as of the close of
business on the last day of a Collection Period, the Amount Financed minus the
sum of (i) the portion of all payments made by or on behalf of the related
Obligor on or prior to such date and allocable to principal using the Simple
Interest Method and (ii) any payment of the Purchase Amount for such Receivable
allocable to principal.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Amount" means the amount, as of the close of business on the last
day of a Collection Period, required to prepay in full a Receivable under the
terms thereof including interest to the end of such Collection Period.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 of the Transfer and Servicing Agreement, by DFS pursuant to Section
3.01 of the DFS/Ganis Transfer Agreement, by the Transferor pursuant to Section
3.01 of the Ganis/Depositor Transfer Agreement, or by the Depositor pursuant to
Section 3.01 of the Transfer and Servicing Agreement.
"Rating Agency" means Fitch, Standard & Poor's and Moody's or, if no such
organization or successor is any longer in existence, a nationally recognized
statistical rating organization or other comparable Person designated by the
Depositor, notice of which designation shall be given to the Indenture Trustee,
the Owner Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 Business Days (or such shorter period as
is acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified any of the Depositor, the Servicer, the
Indenture Trustee, the Owner Trustee or the Issuer in writing that such action
shall not result in a qualification, reduction or withdrawal of the then current
rating of any Class of the Notes.
"Realized Loss" means, with respect to any Receivable that becomes a
Defaulted Receivable during any Collection Period, the excess of the Principal
Balance of such Defaulted
A-18
Receivable over all Liquidation Proceeds or other amounts received by the
Servicer with respect to such Receivable to the extent allocable to principal
during such Collection Period.
"Receivable" means any Contract listed on Schedule A to the Transfer and
Servicing Agreement (which Schedule may be in the form of microfiche, computer
tape or other computer-readable form).
"Receivable Files" means the documents specified in Section 3.02 of the
Transfer and Servicing Agreement.
"Record Date" means, with respect to any Monthly Payment Date (including
the Redemption Date), the close of business on the day immediately preceding
such Monthly Payment Date or, if Definitive Notes have been issued pursuant to
Section 2.12 of the Indenture, the last day of the month immediately preceding
such Monthly Payment Date.
"Recoveries" means, with respect to any Receivable that becomes a Defaulted
Receivable, monies collected in respect thereof, from whatever source, during
any Collection Period following the Collection Period in which such Receivable
became a Defaulted Receivable, net of the sum of (i) any amounts expended by the
Servicer for the account of the Obligor and (ii) any amounts required by law to
be remitted to the Obligor.
"Redemption Date" is defined in Section 10.01 of the Indenture.
"Redemption Price" means, in the case of a redemption of the Notes pursuant
to Section 10.01 of the Indenture, an amount equal to the unpaid principal
amount of the Notes redeemed plus accrued and unpaid interest thereon at the
respective Interest Rates for each Class of Notes being so redeemed through the
end of the Interest Accrual Period relating to the applicable Monthly Payment
Date.
"Registered Holder" means the Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
"Registrar of Titles" means, with respect to any state, the governmental
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, motor vehicles and liens thereon.
"Regular Principal Distribution Amount" means, with respect to any Monthly
Payment Date, the sum of the following amounts, without duplication, with
respect to the Receivables in respect of the Collection Period preceding such
Monthly Payment Date: (i) that portion of all collections on Receivables
allocable to principal, (ii) all Liquidation Proceeds or other collections
attributable to the principal amount of Receivables that became Defaulted
Receivables during such Collection Period, plus the amount of Realized Losses
with respect to the Defaulted Receivables, (iii) to the extent attributable to
principal, the Purchase Amount of each Receivable that became a Purchased
Receivable during such Collection Period and
A-19
(iv) partial payments relating to refunds of extended warranty protection plan
costs or of physical damage, credit life or disability insurance policy
premiums, but only if such costs or premiums were financed by the respective
Obligors thereon as of the date of the original Contract and only to the extent
not included under clause (i) above.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a) of the Transfer and Servicing Agreement.
"Reserve Account Initial Deposit" means an amount equal to $1,872,655.
"Residual Interest" means the beneficial undivided ownership interest in
the Trust.
"Residual Interestholder" means the Depositor in its capacity as the owner
of the Residual Interest.
"Residual Interestholder Distribution Account" has the meaning specified in
Section 5.01 of the Trust Agreement.
"Responsible Officer" means, with respect to the Indenture Trustee, any
Trust Officer thereof.
"Schedule of Receivables" means the list of the Receivables set forth in
Schedule A to the Transfer and Servicing Agreement (which Schedule may be in the
form of microfiche or computer tape or other computer-readable form).
"Securities" means the Notes.
"Securities Act" means the Securities Act of 1933, as amended.
"Servicer" means DFS, as the servicer of the Receivables, and each
successor to DFS (in the same capacity).
"Servicer Default" has the meaning specified in Section 8.01 of the
Transfer and Servicing Agreement.
"Servicer's Certificate" means a certificate of the Servicer delivered
pursuant to Section 4.09 of the Transfer and Servicing Agreement, substantially
in the form of Exhibit B thereto.
"Servicing Fee" means the fee payable to the Servicer for services rendered
during each Collection Period, determined pursuant to Section 4.08 of the
Transfer and Servicing Agreement.
"Servicing Fee Rate" means fifty basis points (.50%) per annum.
A-20
"Simple Interest Method" means the method of allocating a payment with
respect to a Receivable to principal and interest, pursuant to which the portion
of such payment that is allocated to interest is equal to the product of the
stated APR multiplied by the unpaid principal balance of the Receivable
multiplied by the period of time elapsed (as a fraction of a calendar year)
since the preceding payment of interest was made and the remainder of such
payment is allocable to reduce the principal.
"Specified Accountants" means KPMG LLP.
"Specified Agreement" has the meaning set forth in Section 2.13(a) of the
Trust Agreement.
"Specified Reserve Account Balance" means, with respect to any Monthly
Payment Date, two percent (2.00%) of the Pool Balance as of the close of
business on the last day of the immediately preceding Collection Period;
provided, however, that the Specified Reserve Account Balance shall not be less
than seventy-five basis points (0.75%) of the Initial Pool Balance.
Notwithstanding the preceding sentence, the Specified Reserve Account Balance
shall not exceed the outstanding principal balance of the Notes.
"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.
"Stated Maturity Date" means, with respect to (i) the Class A-1 Notes, the
Class A-1 Stated Maturity Date; (ii) the Class A-2 Notes, the Class A-2 Stated
Maturity Date; (iii) the Class A-3 Notes, the Class A-3 Stated Maturity Date;
(iv) the Class A-4 Notes, the Class A-4 Stated Maturity Date; (v) the Class A-5
Notes, the Class A-5 Stated Maturity Date; (vi) the Class A-6 Notes, the
Class A-6 Stated Maturity Date; (vii) the Class B Notes, the Class B Stated
Maturity Date; and (viii) the Class C Notes, the Class C Stated Maturity Date.
"Step Rate Receivable" means a Receivable which provides that the APR will
increase to a different fixed rate from time to time during the term of such
Receivable.
"Successor Servicer" has the meaning specified in Section 3.07(e) of the
Indenture.
"Targeted Overcollateralization Amount" means, with respect to any Monthly
Payment Date, an amount equal to one percent (1.00%) of the Pool Balance as of
the end of the preceding Collection Period.
"Total Distribution Amount" means, with respect to any Monthly Payment
Date, the sum of the following amounts, without duplication, with respect to the
Receivables in respect of the Collection Period preceding such Monthly Payment
Date: (1) all collections on Receivables
A-21
allocable to interest and principal, (2) all Liquidation Proceeds or other
collections attributable to accrued interest on or the principal amount of
Receivables that became Defaulted Receivables during such Collection Period,
plus the amount of Realized Losses with respect to the Defaulted Receivables,
(3) all Advances made by the Servicer, (4) the Purchase Amount of each
Receivable that became a Purchased Receivable during such Collection Period, (5)
all Recoveries and (6) partial payments relating to refunds of extended warranty
protection plan costs or of physical damage, credit life or disability insurance
policy premiums, but only if such costs or premiums were financed by the
respective Obligors thereon as of the date of the original contract and only to
the extent not included under clause (1) above; provided, however, that in
calculating the Total Distribution Amount the following shall be excluded: (i)
all payments and proceeds (including Liquidation Proceeds) of any Purchased
Receivables, the Purchase Amount of which has been included in the Total
Distribution Amount in a prior Collection Period; (ii) amounts received in
respect of interest on the Receivables (which amounts shall be determined based
on the Simple Interest Method) during such preceding Collection Period in excess
of the amount of interest that would be due on the aggregate Principal Balance
of the Receivables during such Collection Period at their respective APRs if a
payment were received on each Receivable during such Collection Period on the
date payment is due under the terms of such Receivable; (iii) late payments of
interest to the extent applied to reimbursement of Servicer Advances; and (iv)
Liquidation Proceeds with respect to a Receivable attributable to accrued and
unpaid interest thereon (but not including interest for the then current
Collection Period) but only to the extent of any unreimbursed Advances.
"Transfer and Servicing Agreement" means the Transfer and Servicing
Agreement dated as of July 1, 1999 among the Issuer, the Depositor, and DFS, as
Servicer, as the same may be amended, amended and restated or otherwise modified
from time to time.
"Transferor" means Ganis.
"Transferor Conveyed Property" has the meaning specified in Section 2.01 of
the Ganis/Depositor Transfer Agreement.
"Transferor Receivables" has the meaning specified in Section 2.01 of the
Ganis/Depositor Transfer Agreement.
"Treasury Regulations" means regulations, including proposed or temporary
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" means the Issuer.
"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
A-22
Property, book-entry securities, uncertificated securities or otherwise), and
all proceeds of the foregoing.
"Trust Accounts" has the meaning specified in Section 5.01 in the Transfer
and Servicing Agreement.
"Trust Agreement" means the Amended and Restated Trust Agreement dated as
of July 1, 1999 between the Depositor and the Owner Trustee, as the same may be
further amended, amended and restated or otherwise modified 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, without limitation, all
property and interests Granted to the Indenture Trustee), including all proceeds
thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force on the Closing Date, unless otherwise specifically provided.
"Trust Officer" means (i) in the case of the Indenture Trustee, any officer
within the Corporate Trust Office of the Indenture Trustee, including any Vice
President, Assistant Vice President, Senior Trust Officer, Trust Officer,
Secretary, Assistant Secretary or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject, and (ii) in the case of the Owner
Trustee, any officer in the Corporate Trust Administration Department of the
Owner Trustee with direct responsibility for the administration of the Trust
Agreement and the other Basic Documents on behalf of the Owner Trustee.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
"Uncertificated Item" means an "uncertificated security" as defined in
Section 8-102(a)(18) of the UCC.
A-23
SCHEDULE A
Schedule of Receivables
Delivered to the Owner Trustee and Indenture Trustee at Closing
SCHEDULE B
Location of Receivable Files
660 Newport Center Drive
Newport Beach, CA 92660
EXHIBIT A
DISTRIBUTION FINANCIAL SERVICES RV TRUST 1999-3
MONTHLY PAYMENT DATE STATEMENT TO NOTEHOLDERS
Pool Balance
Distribution Allocable to Principal on Notes
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Class A-5 Notes: ($ per $1,000 original principal amount)
Class A-6 Notes: ($ per $1,000 original principal amount)
Class B Notes: ($ per $1,000 original principal amount)
Class C Notes: ($ per $1,000 original principal amount)
Distribution Allocable to Interest on Notes
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Class A-5 Notes: ($ per $1,000 original principal amount)
Class A-6 Notes: ($ per $1,000 original principal amount)
Class B Notes: ($ per $1,000 original principal amount)
Class C Notes: ($ per $1,000 original principal amount)
Note Balance After Giving Effect to Principal Distributions on Notes
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class A-5 Notes
Class A-6 Notes
Class B Notes
Class C Notes
Note Pool Factor
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class A-5 Notes
Class A-6 Notes
A-1
Class B Notes
Class C Notes
Servicing Fee
Servicing Fee Per $1,000 Note
Realized Losses
Reserve Account Balance
Payments Received with Respect to Receivables During Most Recently Ended
Collection Period
Amounts Allocated or Distributed on the Preceding Monthly Payment Date
(including reconciliation of such amounts with information provided by the
Servicer prior to current Monthly Payment Date)
Distribution to Residual Interestholder
Noteholders' Interest Carryover Shortfall, if any
Aggregate Purchase Amounts for Receivables, if any, that were purchased in the
related Collection Period
A-2
EXHIBIT B
SERVICER'S MONTHLY CERTIFICATE
DISTRIBUTION FINANCIAL SERVICES RV TRUST 1999-3
Determination Date:
Monthly Payment Date:
Collection Period Ending:
I. Collection Account Summary
Total Available Funds:
Principal and Interest Payments Received (including Prepayments):
Net Liquidation Proceeds (including Rebates/Insurance Amounts):
Current Monthly Interest Advance:
Amount of Withdrawal, if any, from Reserve Account:
Purchase Amounts for Purchased Receivables:
Total Distribution Amount Sent to Trustee:
II. Excess or Shortfalls
Amount of Interest Payments Due During the Collection Period for Receivables:
Amount of Interest Payments Received During the Collection Period for
Receivables:
Amount of Current Month Excess/Shortfall:
III. Calculation of Reserve Account Deposit/Withdrawals
Specified Reserve Account Balance:
Beginning Reserve Account Balance:
Deposits to Reserve Account (only if Reserve Account less than the Specified
Reserve Account Balance):
B-1
Withdrawals from Reserve Account (to the extent there are shortfalls on
payments of Interest or Principal):
Amount in Reserve Account as of Determination Date (excluding amount to
be paid on next Monthly Payment Date):
Total Ending Reserve Account Balance:
IV. Collections on Receivables
(a) Interest and Principal Payments Received:
Interest Payments Received:
Scheduled Principal Payments Received:
Principal Prepayments Received:
Total Interest and Principal Payments Received:
(b) Liquidation Proceeds:
Gross Proceeds of Defaulted Receivables (including Rebates/Insurance):
minus: Reasonable Expenses:
Net Liquidation Proceeds:
Allocation of Liquidation Proceeds:
Amount Allocable to Interest Payments:
Amount Allocable to Principal Payments:
(c) Purchase Amount--Receivables purchased from Trust:/1/
Amount Allocable to Interest:
Amount Allocable to Principal:
Total Collected Funds:
V. Calculation of Servicing and Trustee Fees:
Pool Balance of Receivables as of First Day of Collection Period:
multiplied by Servicing Fee Rate:
divided by Months per Year:
Servicing Fee Amount:
Pool Balance of Receivables as of First Day of Collection Period:
multiplied by Trustee Fee Rate:
divided by Months per Year:
Trustee Fee Amount:
- --------------------------
/1/Identify pursuant to Section 4.09 of the Transfer and Servicing Agreement.
B-2
VI. Pool Balance and Portfolio Performance
(a) Pool Balance:
Initial Pool Balance:
Pool Balance as of Preceding Accounting Date:
Pool Balance as of Current Accounting Date
Age of Pool in Months:
(b) Default and Delinquency Performance (Includes Repossessions and
Bankruptcies):
- --------------------------------------------------------------------------------
Current Month Number of Loans Principal Balance Percentage
- --------------------------------------------------------------------------------
30 - 59 Days Delinquent
- --------------------------------------------------------------------------------
60 - 89 Days Delinquent
- --------------------------------------------------------------------------------
90+ Days Delinquent
- --------------------------------------------------------------------------------
Defaults
- --------------------------------------------------------------------------------
Cumulative Defaults
- --------------------------------------------------------------------------------
Schedule of Liquidated Receivables
Description of Vehicle
Account Number
Original Principal Balance of the Liquidated Receivables
Outstanding Principal Balance of the Liquidated Receivables
Gross Recovery
Net of Expenses
Realized Loss
Chargeoff Date
Repossession Date
Liquidation Date
Current Period Defaulted Receivables:
Description of Vehicle
Account Number
Original Principal Balance of the Defaulted Receivables
Outstanding Principal Balance of the Defaulted Receivables
Recovery Net of Expenses
Realized Loss
Chargeoff Date
Schedule of Repossession Inventory
Description of Vehicle
B-3
Account Number
Original Principal Balance of the Defaulted Receivables
Outstanding Principal Balance of the Defaulted Loan
Recovery Net of Expenses
Realized Loss
Chargeoff Date
Repossession Date
Current Period Realized Losses
Current Month's Realized Losses:
Current Month's Realized Losses as Percentage of Initial Pool Balance
(Annualized):
Preceding Month's Realized Losses:
Preceding Month's Realized Losses as Percentage of Initial Pool Balance
(Annualized):
Second Preceding Month's Realized Losses:
Second Preceding Month's Realized Losses as Percentage of Initial Pool Balance
(Annualized):
Cumulative Realized Losses:
Cumulative Realized Losses as Percentage of Initial Pool Balance:
VII. Distributions of the Total Distributable Amount
Total Pool Factor:
Note Pool Factor:
A. Monthly Servicing Fee and any unpaid servicing fees from prior
Monthly Payment Dates:
Servicer Reimbursements for Mistaken Deposits or Postings of Checks
Returned for Insufficient Funds (not Otherwise Reimbursed to Servicer):
B. Noteholders' Interest Distributable Amount:
Class A-1
Class A-2
Class A-3
Class A-4
Class A-5
Class A-6
Class B
Class C
Noteholders' Monthly Principal Distributable Amount:
Class A-1
Class A-2
Class A-3
Class A-4
Class A-5
Class A-6
B-4
Class B
Class C
VIII. Pool Statistics
Weighted Average Annual Percentage Rate
Weighted Average Remaining Term
B-5
EXHIBIT C
FINAL CERTIFICATION OF CUSTODIAN
(date)
(to be addressed to the
Indenture Trustee)
Re: Transfer and Servicing Agreement dated as of July 1, 1999,
among Distribution Financial Services RV Trust 1999-3, Deutsche
Recreational Asset Funding Corporation, and Deutsche Financial
Services Corporation, as Servicer (the "Agreement")
Gentlemen:
In accordance with the provisions of Section 3.02 of the above-referenced
Agreement, the undersigned, as custodian, hereby certifies that as to each
Receivable listed in the Schedule of Receivables, it has reviewed the related
Receivable File and has determined that (i) all documents required to be
delivered to it pursuant to the Agreement are in its possession, (ii) such
documents have been reviewed by it and appear regular on their face and relate
to such Receivable (for each of the Receivables listed on the attachment hereto
a certified confirmation of the lien is included in the Receivables File in lieu
of a fully executed original Lien Certificate or application therefor), and
(iii) based on its examination and only as to the foregoing documents, the
information set forth in the Schedule of Receivables respecting such Receivable
is correct. Capitalized terms used but not defined herein shall have the
meanings provided by the Agreement.
DEUTSCHE FINANCIAL SERVICES CORPORATION
By:
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Name:
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Title:
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C-1