Exhibit 10.1
EXECUTION COPY
SALE AND SERVICING AGREEMENT
among
NATIONAL CITY AUTO RECEIVABLES TRUST 2002-A,
Issuer,
NATIONAL CITY VEHICLE RECEIVABLES INC.,
Depositor,
NATIONAL CITY BANK,
Seller, Servicer, Administrator and Custodian,
and
THE BANK OF NEW YORK,
Indenture Trustee
Dated as of March 1, 2002
Table of Contents
Page
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions.................................................1
Section 1.02. Other Definitional Provisions..............................20
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables...................................22
ARTICLE III
THE RECEIVABLES
Section 3.01. Representations and Warranties of the Seller................24
Section 3.02. Representations and Warranties of the Depositor.............24
Section 3.03. Repurchase Upon Breach......................................25
Section 3.04. Custody of Receivable Files.................................25
Section 3.05. Duties of Servicer as Custodian.............................25
Section 3.06. Instructions; Authority to Act..............................26
Section 3.07. Custodian's Indemnification.................................26
Section 3.08. Effective Period and Termination............................27
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 4.01. Duties of Servicer..........................................28
Section 4.02. Collection of Receivable Payments; Modifications of
Receivables.................................................29
Section 4.03. Realization upon Receivables................................29
Section 4.04. [Reserved]..................................................30
Section 4.05. Maintenance of Security Interests in Financed Vehicles......30
Section 4.06. Covenants of Servicer.......................................30
Section 4.07. Purchase of Receivables Upon Breach.........................31
Section 4.08. Servicing Fee...............................................31
Section 4.09. Servicer's Certificate......................................31
Section 4.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event...........................................32
Section 4.11. Annual Independent Accountants' Report......................32
Section 4.12. Access to Certain Documentation and Information Regarding
Receivables.................................................32
Section 4.13. Term of Servicer............................................33
Section 4.14. Access to Information Regarding Trust and Basic Documents...33
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ARTICLE V
DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
Section 5.01. Establishment of Accounts...................................34
Section 5.02. Collections.................................................36
Section 5.03. Application of Collections..................................36
Section 5.04. Purchase Amounts............................................37
Section 5.05. Permitted Withdrawals from Collection Account...............37
Section 5.06. Distributions...............................................37
Section 5.07. Reserve Account.............................................40
Section 5.08. Statements to Securityholders...............................41
ARTICLE VI
THE DEPOSITOR
Section 6.01. Representations of Depositor................................43
Section 6.02. Corporate Existence.........................................44
Section 6.03. Liability of Depositor; Indemnities.........................44
Section 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor...................................44
Section 6.05. Limitation on Liability of Depositor and Others.............45
Section 6.06. Depositor May Own Securities................................45
Section 6.07. Depositor to Provide Copies of Relevant Securities Filings..45
Section 6.08. Amendment of Depositor's Organizational Documents...........45
ARTICLE VII
THE SERVICER
Section 7.01. Representations of Servicer.................................46
Section 7.02. Indemnities of Servicer.....................................47
Section 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer....................................48
Section 7.04. Limitation on Liability of Servicer and Others..............48
Section 7.05. [Reserved]..................................................49
Section 7.06. Servicer Not to Resign......................................49
ARTICLE VIII
DEFAULT
Section 8.01. Servicer Termination Events.................................50
Section 8.02. Consequences of a Servicer Termination Event................50
Section 8.03. Appointment of Successor Servicer...........................51
Section 8.04. Notification to Securityholders.............................52
Section 8.05. Waiver of Past Defaults.....................................52
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ARTICLE IX
TERMINATION
Section 9.01. Optional Purchase of All Receivables........................53
ARTICLE X
MISCELLANEOUS
Section 10.01. Amendment...................................................54
Section 10.02. Protection of Title to Trust................................55
Section 10.03. Notices.....................................................57
Section 10.04. Assignment by the Depositor or the Servicer.................57
Section 10.05. Limitations on Rights of Others.............................57
Section 10.06. Severability................................................57
Section 10.07. Counterparts................................................57
Section 10.08. Headings....................................................57
Section 10.09. GOVERNING LAW...............................................58
Section 10.10. Assignment by Issuer........................................58
Section 10.11. Nonpetition Covenants.......................................58
Section 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.....................................................58
Schedule A [Reserved]
Schedule B Final Schedule of Receivables
Schedule C Location of Receivable Files
Exhibit A Representations and Warranties of the Seller under
Section 3.02 of the Receivables Purchase Agreement
Exhibit B Form of Payment Date Statement to Securityholders
Exhibit C Form of Servicer's Certificate
Exhibit D-1 Extension Policy
Exhibit D-2 Form of Dealer Agreement
Exhibit D-3 Form of Assignment
Exhibit E [Reserved]
Exhibit F Perfection Representations, Warranties and Covenants
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This SALE AND SERVICING AGREEMENT, dated as of March 1, 2002, among
NATIONAL CITY AUTO RECEIVABLES TRUST 2002-A, a Delaware business trust (the
"Issuer"), NATIONAL CITY VEHICLE RECEIVABLES INC., a Delaware corporation (the
"Depositor"), NATIONAL CITY BANK, a national banking association, as servicer
(in such capacity, the "Servicer"), as seller to the Depositor (in such
capacity, the "Seller"), as administrator (in such capacity, the
"Administrator") and as custodian (in such capacity, the "Custodian") and THE
BANK OF NEW YORK, a New York banking corporation, as indenture trustee (the
"Indenture Trustee").
WHEREAS, the Issuer desires to purchase from the Depositor a
portfolio of receivables arising in connection with motor vehicle retail
installment sale contracts and retail installment loans originated or
purchased by National City Bank in the ordinary course of its business and
sold by National City Bank to the Depositor;
WHEREAS, the Depositor is willing to sell such receivables to the
Issuer;
WHEREAS the Issuer is willing to pledge such receivables to the
Indenture Trustee; and
WHEREAS, National City Bank is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Administration Agreement" shall mean the Owner Trust Administration
Agreement dated as of March 1, 2002, among National City Auto Receivables
Trust 2002-A, as the Trust, National City Bank, as Owner Trust Administrator,
and The Bank of New York, as Indenture Trustee.
"Affiliate" means. as to any Person, any other Person controlling,
controlled by or under common control with such Person.
"Aggregate Net Losses" means, for any Payment Date, the amount equal
to the aggregate Principal Balance of all Receivables that were designated as
Liquidated Receivables during the related Collection Period minus the
Liquidation Proceeds allocable to principal collected during such Collection
Period with respect to any Receivables designated as Liquidated Receivables
and minus any Recoveries allocable to principal collected during that
Collection Period with respect to any Receivable designated a Liquidated
Receivable.
"Agreement" means this Sale and Servicing Agreement, as the same may
be amended or supplemented from time to time.
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"Amount Financed" means with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed
Vehicle and any related costs, exclusive of any amount allocable to the
premium of force-placed physical damage insurance covering the Financed
Vehicle.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
rate of interest stated in the related Contract.
"Available Collections" means, for each Payment Date, the sum of the
following amounts with respect to the Collection Period preceding such Payment
Date: (a) that portion of all collections on the Receivables allocable to
interest, (b) that portion of all collections on the Receivables allocable to
principal, (c) Liquidation Proceeds for such Collection Period to the extent
allocable to interest, (d) Liquidation Proceeds for such Collection Period to
the extent allocable to principal, (e) the Purchase Amount of each Receivable
that became a Purchased Receivable during such Collection Period to the extent
attributable to accrued interest on such Receivable, (f) that portion
allocable to principal of the Purchase Amount of all Receivables that became
Purchased Receivables during or in respect of such Collection Period, (g)
Recoveries for such Collection Period, (h) Investment Earnings for the related
Payment Date, (i) Net Investment Losses required to be deposited by the
Servicer, and (j) partial prepayments of any refunded item included in the
principal balance of a Receivable, such as extended warranty protection plan
costs, or physical damage, credit life, disability insurance premiums, or any
partial prepayment which causes a reduction in the Obligor's periodic payment
to an amount below the Scheduled Payment as of the Cut-off Date; provided,
however, that in calculating the Available Collections the following will be
excluded: (a) all payments and proceeds (including Liquidation Proceeds) of
any Receivables the Purchase Amount of which has been included in the
Available Funds in a prior Collection Period; and (b) any late fees,
prepayment charges and other administrative fees and expenses or similar
charges allowed by applicable law and the terms of the Receivables, collected
by and payable to the Servicer during the related Collection Period.
"Available Funds" means, for each Payment Date, the sum of (a) the
Available Collections for such Payment Date and (b) the Reserve Account
Withdrawal Amount, if any, for such Payment Date.
"Average Net Loss Ratio" means, for any Payment Date, the average of
the Net Loss Ratios for such Payment Date and the preceding two Payment Dates.
"Basic Documents" means the Trust Agreement, the Indenture, this
Agreement, the Receivables Purchase Agreement, the Administration Agreement,
the Securities Account Control Agreement and the Note Depository Agreement and
other documents and certificates delivered in connection therewith.
"Business Day" means any day other than a Saturday, a Sunday, a legal
holiday or any other day on which national banking institutions or commercial
banking institutions in the States of New York, Ohio or Delaware are
authorized or required by law, executive order or governmental decree to be
closed.
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"Certificate" means a certificate evidencing the beneficial interest
of a Certificateholder in the Trust, executed and countersigned as provided in
the Trust Agreement and substantially in the form set forth in Exhibit A
therein.
"Certificate Distribution Account" has the meaning assigned to such
term in the Trust Agreement.
"Certificateholder" or "Holder" shall mean a Person in whose name a
Certificate is registered.
"Class" means any one of the classes of Notes.
"Class A Monthly Principal Distributable Amount" means, with respect
to any Payment Date, the sum of (a) the lesser of (i) the Monthly Principal
Distributable Amount or (ii) the excess of the Outstanding Amount of the Class
A-1 Notes on that Payment Date over any Class A Principal Carryover Shortfall
(in each case, before giving effect to any payments made to Holders of the
Class A Notes on that Payment Date) and (b) the Class A Percentage of the
Monthly Principal Distributable Amount reduced by amounts allocated in clause
(a) of this definition; provided, however, that the Class A Monthly Principal
Distributable Amount shall not exceed the excess of the Outstanding Amount of
the Class A Notes over the Class A Principal Carryover Shortfall.
"Class A Note" means any Class A-1 Note, Class A-2 Note, Class A-3
Note or Class A-4 Note.
"Class A Noteholders' Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class A-1 Interest Distributable
Amount for such Payment Date, the Class A-2 Interest Distributable Amount for
such Payment Date, the Class A-3 Interest Distributable Amount for such
Payment Date and, the Class A-4 Interest Distributable Amount for such Payment
Date.
"Class A Percentage" means a fraction, expressed as a percentage, the
numerator of which is the sum of the Initial Class A-2 Note Balance, the
Initial Class A-3 Note Balance and the Initial Class A-4 Note Balance, and the
denominator of which is the sum of the Initial Class A-2 Note Balance, the
Initial Class A-3 Note Balance, the Initial Class A-4 Note Balance, the
Initial Class B Note Balance and the Initial Class C Note Balance; provided,
however, that, unless the Class A Notes have been paid in full, for any
Payment Date as of which the Average Net Loss Ratio is greater than or equal
to 4.50%, the Class A Percentage shall be 100%; provided further that, on any
Payment Date after the Class A Notes have been paid in full, the Class A
Percentage shall be 0%.
"Class A Principal Carryover Shortfall" means, with respect to any
Payment Date after the initial Payment Date, the amount, if any, by which the
sum of the Class A Monthly Principal Distributable Amount for the preceding
Payment Date and any outstanding Class A Principal Carryover Shortfall on that
preceding Payment Date exceeds the amount in respect of principal on the Class
A Notes actually paid to the Class A Noteholders on that preceding Payment
Date.
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"Class A Principal Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A Monthly Principal Distributable Amount
for that Payment Date and the Class A Principal Carryover Shortfall for that
Payment Date; provided, however, that the Class A Principal Distributable
Amount on any Payment Date shall not exceed the Outstanding Amount of the
Class A Notes on that Payment Date; and provided further that, on the Final
Scheduled Payment Date of any Class of Class A Notes, the Class A Principal
Distributable Amount shall not be less than the amount that is necessary to
pay that class of Class A Notes in full.
"Class A Uncapped Monthly Principal Distributable Amount" means, with
respect to any Payment Date, the sum of (a) the lesser of (i) the Monthly
Principal Distributable Amount (ii) the excess of the Outstanding Amount of
the Class A-1 Notes on that Payment Date over any Class A Principal Carryover
Shortfall (in each case, before giving effect to any payments made to Holders
of the Class A Notes on that Payment Date) and (b) the Class A Percentage of
the Monthly Principal Distributable Amount reduced by amounts allocated in
clause (a) of this definition.
"Class A-1 Final Scheduled Payment Date" means the Payment Date in
March 2003.
"Class A-1 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class A-1 Monthly
Interest Distributable Amount for the preceding Payment Date and any
outstanding Class A-1 Interest Carryover Shortfall on such preceding Payment
Date exceeds the amount in respect of interest for the Class A-1 Notes
actually deposited in the Note Interest Distribution Account on such preceding
Payment Date, plus interest on the amount of interest due but not paid to the
Class A-1 Noteholders on such preceding Payment Date, to the extent permitted
by law, at the Class A-1 Rate.
"Class A-1 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-1 Monthly Interest Distributable Amount
for such Payment Date and the Class A-1 Interest Carryover Shortfall for such
Payment Date.
"Class A-1 Monthly Interest Distributable Amount" means, with respect
to any Payment Date, interest accrued from and including the prior Payment
Date (or, in the case of the first Payment Date, from and including the
Closing Date) to and including the day immediately prior to such Payment Date,
on the Class A-1 Notes at the Class A-1 Rate on the Outstanding Amount of the
Class A-1 Notes on the immediately preceding Payment Date (or, in the case of
the first Payment Date, the Closing Date), after giving effect to all
distributions of principal to the Class A-1 Noteholders on or prior to such
preceding Payment Date. For all purposes of this Agreement and the other Basic
Documents, interest with respect to the Class A-1 Notes shall be computed on
the basis of the actual number of days in the related Interest Period and a
360-day year.
"Class A-1 Note Balance" means, as of any date of determination, the
Initial Class A-1 Note Balance less all amounts distributed to Class A-1
Noteholders on or prior to such date and allocable to principal.
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"Class A-1 Noteholder" means the Person in whose name a Class A-1
Note is registered in the Note Register.
"Class A-1 Notes" means the 2.04% Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A-1 to the Indenture.
"Class A-1 Rate" means 2.04% per annum.
"Class A-2 Final Scheduled Payment Date" means the Payment Date in
January 2005.
"Class A-2 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class A-2 Monthly
Interest Distributable Amount for the preceding Payment Date and any
outstanding Class A-2 Interest Carryover Shortfall on such preceding Payment
Date exceeds the amount in respect of interest for the Class A-2 Notes
actually deposited in the Note Interest Distribution Account on such preceding
Payment Date, plus interest on the amount of interest due but not paid to the
Class A-2 Noteholders on such preceding Payment Date, to the extent permitted
by law, at the Class A-2 Rate.
"Class A-2 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-2 Monthly Interest Distributable Amount
for such Payment Date and the Class A-2 Interest Carryover Shortfall for such
Payment Date.
"Class A-2 Monthly Interest Distributable Amount" means, with respect
to any Payment Date, interest accrued from and including the 15th day of the
preceding calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to and including the 14th day of the calendar
month in which such Payment Date occurs, on the Class A-2 Notes at the Class
A-2 Rate on the Outstanding Amount of the Class A-2 Notes on the immediately
preceding Payment Date (or, in the case of the first Payment Date, the Closing
Date), after giving effect to all distributions of principal to the Class A-2
Noteholders on or prior to such preceding Payment Date. For all purposes of
this Agreement and the other Basic Documents, interest with respect to the
Class A-2 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Class A-2 Noteholder" means the Person in whose name a Class A-2
Note is registered in the Note Register.
"Class A-2 Notes" means the 3.00% Asset Backed Notes, Class A-2,
substantially in the form of Exhibit A-2 to the Indenture.
"Class A-2 Rate" means 3.00% per annum.
"Class A-3 Final Scheduled Payment Date" means the Payment Date in
July 2006.
"Class A-3 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class A-3 Monthly
Interest Distributable Amount for the preceding Payment Date and any
outstanding Class A-3 Interest Carryover Shortfall on such preceding Payment
Date exceeds the amount in respect of interest for the Class A-3 Notes
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actually deposited in the Note Interest Distribution Account on such preceding
Payment Date, plus interest on the amount of interest due but not paid to the
Class A-3 Noteholders on such preceding Payment Date, to the extent permitted
by law, at the Class A-3 Rate.
"Class A-3 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-3 Monthly Interest Distributable Amount
for such Payment Date and the Class A-3 Interest Carryover Shortfall for such
Payment Date.
"Class A-3 Monthly Interest Distributable Amount" means, with respect
to any Payment Date, interest accrued from and including the 15th day of the
preceding calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to and including the 14th day of the calendar
month in which such Payment Date occurs, on the Class A-3 Notes at the Class
A-3 Rate on the Outstanding Amount of the Class A-3 Notes on the immediately
preceding Payment Date (or, in the case of the first Payment Date, the Closing
Date), after giving effect to all distributions of principal to the Class A-3
Noteholders on or prior to such preceding Payment Date. For all purposes of
this Agreement and the other Basic Documents, interest with respect to the
Class A-3 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Class A-3 Noteholder" means the Person in whose name a Class A-3
Note is registered in the Note Register.
"Class A-3 Notes" means the 4.04% Asset Backed Notes, Class A-3,
substantially in the form of Exhibit A-3 to the Indenture.
"Class A-3 Rate" means 4.04% per annum.
"Class A-4 Final Scheduled Payment Date" means the Payment Date in
August 2009.
"Class A-4 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class A-4 Monthly
Interest Distributable Amount for the preceding Payment Date and any
outstanding Class A-4 Interest Carryover Shortfall on such preceding Payment
Date exceeds the amount in respect of interest for the Class A-4 Notes
actually deposited in the Note Interest Distribution Account on such preceding
Payment Date, plus interest on the amount of interest due but not paid to the
Class A-4 Noteholders on such preceding Payment Date, to the extent permitted
by law, at the Class A-4 Rate.
"Class A-4 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-4 Monthly Interest Distributable Amount
for such Payment Date and the Class A-4 Interest Carryover Shortfall for such
Payment Date.
"Class A-4 Monthly Interest Distributable Amount" means, with respect
to any Payment Date, interest accrued from and including the 15th day of the
preceding calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to and including the 14th day of the calendar
month in which such Payment Date occurs, on the Class A-4 Notes at the Class
A-4 Rate on the Outstanding Amount of the Class A-4 Notes on the immediately
preceding Payment Date (or, in the case of the first Payment Date, the Closing
Date), after giving
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effect to all distributions of principal to the Class A-4 Noteholders on
or prior to such preceding Payment Date. For all purposes of this Agreement
and the other Basic Documents, interest with respect to the Class A-4 Notes
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months.
"Class A-4 Noteholder" means the Person in whose name a Class A-4
Note is registered in the Note Register.
"Class A-4 Notes" means the 4.83% Asset Backed Notes, Class A-4,
substantially in the form of Exhibit A-4 to the Indenture.
"Class A-4 Rate" means 4.83% per annum.
"Class B Final Scheduled Payment Date" means the Payment Date in
August 2009.
"Class B Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class B Monthly
Interest Distributable Amount for the preceding Payment Date and any
outstanding Class B Interest Carryover Shortfall on such preceding Payment
Date exceeds the amount in respect of interest for the Class B Notes actually
deposited in the Note Interest Distribution Account on such preceding Payment
Date, plus interest on the amount of interest due but not paid to the Class B
Noteholders on such preceding Payment Date, to the extent permitted by law, at
the Class B Rate.
"Class B Monthly Interest Distributable Amount" means, with respect
to any Payment Date, interest accrued from and including the 15th day of the
preceding calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to and including the 14th day of the calendar
month in which such Payment Date occurs, on the Class B Notes at the Class B
Rate on the Outstanding Amount of the Class B Notes on the immediately
preceding Payment Date (or, in the case of the first Payment Date, the Closing
Date), after giving effect to all distributions of principal to the Class B
Noteholders on or prior to such preceding Payment Date. For all purposes of
this Agreement and the other Basic Documents, interest with respect to the
Class B Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Class B Monthly Principal Distributable Amount" means with respect
to any Payment Date, the sum of (a) the Class B Percentage of an amount equal
to (i) the Monthly Principal Distributable Amount for that Payment Date less,
(ii) the amount allocated in clause (a) of the definition of "Class A Monthly
Principal Distributable Amount" and (b) the excess, if any, of the Class A
Uncapped Monthly Principal Distributable Amount over the Class A Monthly
Principal Distributable Amount; provided, however, that the Class B Monthly
Principal Distributable Amount shall not exceed the excess of the Outstanding
Amount of the Class B Notes over the Class B Principal Carryover Shortfall.
"Class B Noteholder" means the Person in whose name a Class B Note is
registered in the Note Register.
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"Class B Noteholders' Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class B Monthly Interest
Distributable Amount for such Payment Date and the Class B Interest Carryover
Shortfall for such Payment Date.
"Class B Notes" means the 3.62% Asset Backed Notes, Class B,
substantially in the form of Exhibit B to the Indenture.
"Class B Percentage" means a fraction, expressed as a percentage, the
numerator of which is the Initial Class B Note Balance, and the denominator of
which is the sum of the Initial Class A-2 Note Balance, the Initial Class A-3
Note Balance, the Initial Class A-4 Note Balance, the Initial Class B Note
Balance and the Initial Class C Note Balance; provided, however, on any
Payment Date as of which the Average Net Loss Ratio is greater than or equal
to 4.50%, if the Class A Notes have been paid in full, the Class B Percentage
shall be 100%; otherwise, the Class B Percentage shall be zero.
Notwithstanding the above, on any Payment Date after the Class A Notes have
been paid in full and the Average Net Loss Ratio is less than 4.50%, the Class
B Percentage means a fraction, expressed as a percentage, the numerator of
which is the sum of the Initial Class A-2 Note Balance, the Initial Class A-3
Note Balance, the Initial Class A-4 Note Balance and the Initial Class B Note
Balance, and the denominator of which is the sum of the Initial Class A-2 Note
Balance, the Initial Class A-3 Note Balance, the Initial Class A-4 Note
Balance, the Initial Class B Note Balance and the Initial Class C Note
Balance; provided that, on any Payment Date after the Class B Notes have been
paid in full, the Class B Percentage shall be zero.
"Class B Principal Carryover Shortfall" means, with respect to any
Payment Date after the initial Payment Date, the amount, if any, by which the
sum of the Class B Monthly Principal Distributable Amount for the preceding
Payment Date and any outstanding Class B Principal Carryover Shortfall on that
preceding Payment Date exceeds the amount in respect of principal on the Class
B Notes actually paid to the Class B Noteholders on that preceding Payment
Date.
"Class B Principal Distributable Amount" means, with respect to any
Payment Date, the sum of the Class B Monthly Principal Distributable Amount
for that Payment Date and the Class B Principal Carryover Shortfall for that
Payment Date; provided, however, that the Class B Principal Distributable
Amount on any Payment Date shall not exceed the Outstanding Amount of the
Class B Notes on that Payment Date; and provided further that, on the Final
Scheduled Payment Date of the Class B Notes, the Class B Principal
Distributable Amount shall not be less than the amount that is necessary to
pay the Class B Notes in full.
"Class B Rate" means 3.62% per annum.
"Class C Final Scheduled Payment Date" means the Payment Date in
August 2009.
"Class C Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the sum of the Class C Monthly
Interest Distributable Amount for the preceding Payment Date and any
outstanding Class C Interest Carryover Shortfall on such preceding Payment
Date exceeds the amount in respect of interest for the Class C Notes actually
deposited in the Note Interest Distribution Account on such preceding Payment
Date, plus
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interest on the amount of interest due but not paid to the Class C
Noteholders on such preceding Payment Date, to the extent permitted by law, at
the Class C Rate.
"Class C Monthly Interest Distributable Amount" means, with respect
to any Payment Date, interest accrued from and including the 15th day of the
preceding calendar month (or, in the case of the first Payment Date, from and
including the Closing Date) to and including the 14th day of the calendar
month in which such Payment Date occurs, on the Class C Notes at the Class C
Rate on the Outstanding Amount of the Class C Notes on the immediately
preceding Payment Date (or, in the case of the first Payment Date, the Closing
Date), after giving effect to all distributions of principal to the Class C
Noteholders on or prior to such preceding Payment Date. For all purposes of
this Agreement and the other Basic Documents, interest with respect to the
Class C Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Class C Monthly Principal Distributable Amount" means with respect
to any Payment Date, the sum of (a) the Monthly Principal Distributable
Amount, less (b) the Class A Monthly Principal Distributable Amount, less (c)
the Class B Monthly Principal Distributable Amount.
"Class C Noteholder" means the Person in whose name a Class C Note is
registered in the Note Register.
"Class C Noteholders' Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class C Monthly Interest
Distributable Amount for such Payment Date and the Class C Interest Carryover
Shortfall for such Payment Date.
"Class C Notes" means the 4.52% Asset Backed Notes, Class C,
substantially in the form of Exhibit C to the Indenture.
"Class C Principal Carryover Shortfall" means, with respect to any
Payment Date after the initial Payment Date, the amount, if any, by which the
sum of the Class C Monthly Principal Distributable Amount for the preceding
Payment Date and any outstanding Class C Principal Carryover Shortfall on that
preceding Payment Date exceeds the amount in respect of principal on the Class
C Notes actually paid to the Class C Noteholders on that preceding Payment
Date.
"Class C Principal Distributable Amount" means, with respect to any
Payment Date, the sum of the Class C Monthly Principal Distributable Amount
for that Payment Date and the Class C Principal Carryover Shortfall for that
Payment Date; provided, however, that the Class C Principal Distributable
Amount on any Payment Date shall not exceed the Outstanding Amount of the
Class C Notes on that Payment Date: and provided further that, on the Final
Scheduled Payment Date of the Class C Notes, the Class C Principal
Distributable Amount shall not be less than the amount that is necessary to
pay the Class C Notes in full.
"Class C Rate" means 4.52% per annum.
"Closing Date" means March 27, 2002.
"Collateral" has the meaning specified in the Granting Clause of the
Indenture.
9
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a).
"Collection Period" means with respect to any Payment Date, the
calendar month preceding such Payment Date. 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: (i) all applications of collections and (ii) all
distributions to be made on the following Payment Date.
"Contract" means a motor vehicle retail installment sale contract or
a motor vehicle retail installment loan contract, including, without
limitation, the provisions thereof constituting a security agreement.
"Controlling Party" means (i) if the Notes have not been paid in
full, the Indenture Trustee acting at the direction of at least a majority in
Outstanding Amount of the Noteholders and (ii) if the Notes have been paid in
full, the Owner Trustee for the benefit of the Holders of the Certificates.
"Conveyed Assets" shall have the meaning set forth in Section 2.01.
"Corporate Trust Administration Department" shall have the meaning
set forth in the Trust Agreement.
"Corporate Trust Office" shall have the meaning set forth in the
Indenture.
"Cram Down Loss" means any loss resulting from an order issued by a
court of appropriate jurisdiction in an insolvency proceeding that reduces the
amount owed on a Receivable or otherwise modifies or restructures the
scheduled payments to be made thereon. The amount of any such Cram Down Loss
will equal the excess of (i) the principal balance of the Receivable
immediately prior to such order over (ii) the principal balance of such
Receivable as so reduced, modified or restructured. A Cram Down Loss will be
deemed to have occurred on the date on which the Servicer receives notice of
such order.
"Custodian" means National City Bank, in its capacity as custodian of
the Receivables.
"Cutoff Date" means the beginning of business on March 1, 2002.
"Dealer" means the dealer that sold a Financed Vehicle and through
which National City originated the related Receivable or that originated the
related Receivable and assigned it to National City pursuant to a Dealer
Agreement or form of assignment, as applicable.
"Dealer Agreement" means an agreement between National City and a
Dealer pursuant to which such Dealer sells Contracts to National City or
National City originates Contracts through such Dealer, substantially in the
form of Exhibit D-2 hereto.
"Delivery" when used with respect to Trust Account Property means:
10
(a) with respect to any "instruments" within the meaning of Section
9-102(a)(47) of the UCC and are susceptible of physical delivery, transfer
thereof to the Indenture Trustee by physical delivery to the Indenture Trustee
endorsed to, or registered in the name of, the Indenture Trustee or endorsed
in blank, and, with respect to a certificated security (as defined in Section
8-102 of the UCC) transfer thereof (i) by delivery of such certificated
security endorsed to, or registered in the name of, the Indenture Trustee or
(ii) by delivery thereof to a "clearing corporation" (as defined in Section
8-102 of the UCC) and the making by such clearing corporation of appropriate
entries on its books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of the Indenture
Trustee by the amount of such certificated security and the identification by
the clearing corporation of the certificated securities for the sole and
exclusive account of the Indenture Trustee (all of the foregoing, "Physical
Property"), and, in any event, any such Physical Property in registered form
shall be in the name of the Indenture Trustee or its nominee; and such
additional or alternative procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such Trust Account Property
to the Indenture Trustee or its nominee or custodian, consistent with changes
in applicable law or regulations or the interpretation thereof;
(b) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to federal book-entry regulations, the following procedures,
all in accordance with applicable law, including applicable federal
regulations and Articles 8 and 9 of the UCC: book-entry registration of such
Trust Account Property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a securities intermediary that is also a "depository"
pursuant to applicable federal regulations; the making by such securities
intermediary of entries in its books and records crediting such Trust Account
Property to the Indenture Trustee's security account at the securities
intermediary and continuously identifying such book-entry security held
through the Federal Reserve System pursuant to federal book-entry regulations
as belonging to the Indenture Trustee; and such additional or alternative
procedures as may hereafter become appropriate to effect complete transfer of
ownership of any such Trust Account Property to the Indenture Trustee,
consistent with changes in applicable law or regulations or the interpretation
thereof;
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof
in the name of the Indenture Trustee or its nominee or custodian who either
(i) becomes the registered owner on behalf of the Indenture Trustee or (ii)
having previously become the registered owner, acknowledges in writing that it
holds for the Indenture Trustee; and
(d) with respect to any item of Trust Account Property that is a
security entitlement causing the securities intermediary to indicate on its
books and records that such security entitlement has been credited to a
securities account of the Indenture Trustee.
"Depositor" means National City Vehicle Receivables Inc. and its
successors in interest.
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"Determination Date" means, with respect to each Payment Date, the
earlier of (i) the eleventh calendar day of the month in which such Payment
Date occurs (or if such eleventh day is not a Business Day, the next
succeeding Business Day) and (ii) the third Business Day preceding such
Payment Date.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any State, 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 (a) the corporate trust department of
the Indenture Trustee or the Owner Trustee or (b) a depository institution
organized under the laws of the United States of America or any State, that
(i) has either (A) a long-term unsecured debt rating of at least "AA-" by
Standard & Poor's and "A2" by Moody's or (B) a short-term unsecured debt
rating or certificate of deposit rating of at least "A-1+" by Standard &
Poor's and "Prime-1" by Moody's and (ii) the deposits of which are insured by
the FDIC.
"Eligible Investments" means securities, negotiable instruments or
security entitlements, excluding any security with an "r" attached to the
rating thereof, that evidence:
(a) direct obligations of, and obligations fully guaranteed as to the
full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State (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 Rating Agency in the highest investment category granted
thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each Rating Agency in
the highest investment category granted thereby;
(d) investments in money market funds having a rating from each
Rating Agency 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);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the
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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 (b)
above; and
(g) any other investment with respect to which the Rating Agency
Condition is met and the Issuer, the Indenture Trustee or the Servicer has
received written notification from each Rating Agency that the acquisition of
such investment will not result in a reduction, withdrawal or downgrade of the
then-current rating of any Class of Notes.
"Eligible Servicer" means National City or any other Person that at
the time of its appointment as Servicer (i) is servicing a portfolio of motor
vehicle retail installment sale contracts or motor vehicle installment loans,
(ii) is legally qualified and has the capacity to service the Receivables,
(iii) has demonstrated the ability professionally and competently to service a
portfolio of motor vehicle retail installment sale contracts or motor vehicle
installment loans similar to the Receivables with reasonable skill and care
and (iv) has a minimum net worth of $50,000,000.
"Extension Policy" shall mean the policies of the Servicer with
respect to granting extensions on the Contracts as set forth on Exhibit D-1
hereto.
"FDIC" means the Federal Deposit Insurance Corporation, and its
successors.
"Final Scheduled Payment Date" means the Class A-1 Final Scheduled
Payment Date, the Class A-2 Final Scheduled Payment Date, the Class A-3 Final
Scheduled Payment Date, the Class A-4 Final Scheduled Payment Date, the Class
B Final Scheduled Payment Date or the Class C Final Scheduled Payment Date, as
applicable.
"Financed Vehicle" means a new or used automobile, light-duty truck,
van, minivan or sport utility vehicle, together with all accessions thereto,
securing an Obligor's indebtedness under the related Contract.
"First Priority Principal Distribution Amount" means, with respect to
any Payment Date, the excess, if any, of (x) the aggregate Outstanding Amount
of the Class A Notes (as of the day immediately preceding such Payment Date)
over (y) the Pool Balance for such Payment Date.
"Fitch" means Fitch Ratings, Inc. or any successor thereto.
"Indenture" means the Indenture, dated as of March 1, 2002, between
the Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture Trustee
under the Indenture, its successors in interest and any successor trustee
under the Indenture.
"Initial Class A-1 Note Balance" means $229,500,000.
"Initial Class A-2 Note Balance" means $230,000,000.
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"Initial Class A-3 Note Balance" means $321,000,000.
"Initial Class A-4 Note Balance" means $266,235,000.
"Initial Class B Note Balance" means $47,200,000.
"Initial Class C Note Balance" means $16,659,100.
"Initial Pool Balance" means an amount equal to the aggregate
Principal Balance, as of the Cutoff Date, of the Receivables listed on
Schedule B hereto.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure
by such Person generally to pay its debts as such debts become due, or the
taking of action by such Person in furtherance of any of the foregoing.
"Interest Period" means, with respect to the Class A-1 Notes, the
period from and including the most recent Payment Date on which interest has
been paid (or, in the case of the first Payment Date, the Closing Date) to and
including the day before the Payment Date and, with respect to the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the
Class C Notes, the period from and including the 15th day of the preceding
calendar month (or, in the case of the first Payment Date, the Closing Date)
to and including the 14th day of the calendar month in which such Payment Date
occurs.
"Investment Earnings" means, with respect to any Payment Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in a Trust Account (other than the Collection Account) to be applied
on such Payment Date pursuant to Section 5.01(g).
"Issuer" means National City Auto Receivables Trust 2002-A.
"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 the respective Receivable by operation of law as a result of
any act or omission by the related Obligor.
"Liquidated Receivable" means a Receivable with respect to which the
earliest of the following shall have occurred: (i) the related Financed
Vehicle has been repossessed and
14
liquidated, (ii) the Servicer has determined in accordance with its
collection policies that all amounts that it expects to receive with respect
to the Receivable have been received or (iii) the end of the Collection Period
in which the Receivable becomes 120 days or more past due.
"Liquidation Proceeds" means, with respect to any Receivable that
becomes a Liquidated Receivable, the moneys collected in respect thereof, from
whatever source, during or after the Collection Period in which such
Receivable became a Liquidated Receivable, including liquidation of the
related Financed Vehicle, net of the sum of any out-of-pocket expenses of the
Servicer reasonably allocated to such liquidation and any amounts required by
law to be remitted to the Obligor on such Liquidated Receivable.
"Minimum Required Rating" means, with respect to National City, a
short-term unsecured debt rating equal to or greater than "Prime-1" by Moody's
and "A-1" by Standard & Poor's.
"Monthly Principal Distributable Amount" means, for any Payment Date,
an amount equal to the excess, if any, of (a) the Pool Balance as of the first
day of the related Collection Period (before giving effect to any reduction in
the Pool Balance on that day) over (b) the Pool Balance as of the last day of
the related Collection Period (after giving effect to any reduction in the
Pool Balance on that day); provided, however, that the Monthly Principal
Distributable Amount shall not be greater on any Payment Date than the excess
of (a) (i) the Note Balance on that Payment Date (before giving effect to any
payments made to Noteholders on that Payment Date) minus (ii) the aggregate of
the Class A Principal Carryover Shortfall, the Class B Principal Carryover
Shortfall and the Class C Principal Carryover Shortfall for that Payment Date,
over (b) the Pool Balance as of the last day of the related Collection Period
(after giving effect to any reduction in the Pool Balance on that day).
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"National City" means National City Bank, a national banking
association.
"Net Investment Losses" means, with respect to a Trust Account and
any Collection Period, the amount, if any, by which the aggregate of all
losses and expenses incurred during such period in connection with the
investment of funds in Eligible Investments in accordance with Section 5.01(g)
exceeds the aggregate of all interest and other income realized during such
period on such funds.
"Net Loss Ratio" means, for any Payment Date, the ratio expressed as
an annualized percentage of (i) the Aggregate Net Losses for such Payment
Date, to (ii) the Pool Balance on the last day of the second Collection Period
preceding the Collection Period in which such Payment Date occurs.
"Note Balance" means, as of any date of determination, an amount
equal to the sum of (i) the Initial Class A-1 Note Balance, (ii) the Initial
Class A-2 Note Balance, (iii) the Initial Class A-3 Note Balance, (iv) the
Initial Class A-4 Note Balance, (v) the Initial Class B Note Balance and the
Initial Class C Note Balance, less all amounts distributed to Noteholders on
or prior to such date and allocable to principal.
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"Note Interest Distribution Account" means the account designated as
such, established and maintained pursuant to Section 5.01(b).
"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 Amount of such Class of Notes (after
giving effect to any reductions thereof to be made on the immediately
following Payment Date) divided by the original Outstanding Amount of such
Class of Notes. The Note Pool Factor will be 1.0000000 as of the Closing Date;
thereafter, the Note Pool Factor will decline to reflect reductions in the
Outstanding Amount of such Class of Notes.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes.
"Noteholders" shall mean the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders, the Class A-4 Noteholders, the Class B
Noteholders or the Class C Noteholders.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
related Financed Vehicle, and any other Person obligated to make payments
thereunder.
"Officers' Certificate" means a certificate signed by (a) the
chairman of the board, the president, any vice president, the controller or
any assistant controller and (b) a treasurer, assistant treasurer, secretary
or assistant secretary of the Depositor or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel,
who may be an employee of or counsel to the Depositor, the Servicer or the
Trust, which counsel shall be acceptable to the Indenture Trustee, the Owner
Trustee or the Rating Agencies, as applicable, and which shall be addressed to
the Owner Trustee and the Indenture Trustee and which shall be at the expense
of the person required to provide such an Opinion of Counsel.
"Outstanding Amount" means, as of any date of determination and as to
any Notes, the aggregate principal amount of such Notes Outstanding (as
defined in the Indenture) as of such date of determination.
"Owner Trustee" means Wilmington Trust Company, acting not in its
individual capacity but solely as owner trustee under the Trust Agreement.
"Paid-Ahead Period" shall have the meaning ascribed thereto in
Section 5.03(b).
"Payment Date" means, with respect to each Collection Period, the
fifteenth day of the following month or, if such day is not a Business Day,
the immediately following Business Day, commencing on April 15, 2002.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
16
"Pool Balance" means, with respect to any Payment Date, an amount
equal to the aggregate Principal Balance of the Receivables at the end of the
related Collection Period, after giving effect (without duplication in the
case of any given Receivable) to all payments of principal received from
Obligors and that portion allocable to principal of the Purchase Amount of all
Receivables that became Purchased Receivables during or in respect of such
Collection Period, and after adjustment (without duplication in the case of
any given Receivable) for the aggregate amount of any Cram Down Losses during
such Collection Period and the reduction to zero of the aggregate outstanding
Principal Balance of all Receivables that became Liquidated Receivables during
such Collection Period.
"Principal Balance" means, with respect to any Receivable and a
Determination Date, the Amount Financed minus an amount equal to the sum, as
of the close of business on the last day of the related Collection Period, of
(1) that portion of all amounts received on or prior to such day with respect
to such Receivable and allocable to principal using the Simple Interest
Method, and (2) any Cram Down Losses with respect to such Receivable.
"Principal Distribution Account" means the account designated as
such, established and maintained pursuant to Section 5.01(c).
"Purchase Amount" means, with respect to any Receivable that became a
Purchased Receivable, the unpaid principal balance owed by the Obligor thereon
plus unpaid interest on such amount at the applicable APR to the last day of
the month of repurchase.
"Purchased Receivable" means a Receivable purchased as of the close
of business on the last day of a Collection Period by or on behalf of the
Servicer pursuant to Section 4.07 or by or on behalf of the Seller pursuant to
Section 3.03 and the Receivables Purchase Agreement.
"Rating Agency" means Moody's, Fitch or Standard & Poor's, as the
context may require. If none of Moody's, Fitch, Standard & Poor's or a
successor thereto remains in existence, "Rating Agency" shall mean any
nationally recognized statistical rating organization or other comparable
Person designated by the Depositor.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given 10 days' (or such shorter period as
shall be acceptable to each Rating Agency) prior notice thereof and that each
Rating Agency shall not have notified the Issuer or the Indenture Trustee in
writing that such action will result in a reduction, withdrawal or down-grade
of the then-current rating of any Class of Notes.
"Realized Losses" means, as to any Payment Date, the amount, if any,
by which the outstanding aggregate Principal Balance of all Receivables that
became Liquidated Receivables during the related Collection Period exceeds
that portion allocable to principal of all net Liquidation Proceeds received
with respect to such Liquidated Receivables.
"Receivable Files" means the following documents with respect to each
Financed Vehicle:
17
(i) the fully executed original of each Receivable
(together with any agreements modifying each such Receivable,
including any extension agreement);
(ii) the original credit application, or an electronic copy
thereof;
(iii) the original certificate of title or such other
documents that the Servicer or the Seller shall keep on file in
accordance with its customary procedures evidencing the security
interest of the Seller in the related Financed Vehicle; and
(iv) any and all other documents that the Servicer shall
have kept on file in accordance with its customary procedures
relating to a Receivable, an Obligor or a Financed Vehicle.
"Receivables" means any Contract listed on Schedule B (which Schedule
may be in the form of microfiche).
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement dated as of March 1, 2002, between National City Bank, as seller and
National City Vehicle Receivables Inc., as depositor.
"Record Date" means, as to any Payment Date, the day immediately
preceding such Payment Date.
"Recoveries" means, with respect to any Collection Period after a
Collection Period in which a Receivable becomes a Liquidated Receivable, all
monies received by the servicer with respect to such Liquidated Receivable
during that Collection Period, net of any fees, costs and expenses incurred by
and reimbursed to the servicer in connection with the collection of such
Liquidated Receivable and any payments required by law to be remitted to the
Obligor.
"Regular Note Principal Distribution Amount" means, with respect to
any Payment Date, the excess, if any, of (a) the aggregate Outstanding Amount
of the Notes as of the day immediately preceding such Payment Date over (b)
the Pool Balance with respect to such Payment Date; provided, however, that
the Regular Note Principal Distribution Amount on any Payment Date shall not
exceed the Outstanding Amount of the Notes as of the day immediately preceding
such Payment Date and provided further, that the Regular Note Principal
Distribution Amount on or after the Final Scheduled Payment Date of any Class
of Notes shall not be less than the amount that is necessary to reduce the
Outstanding Amount of such Class of Notes to zero; and provided further that,
on the Reserve Account Pay-Down Date, the Regular Note Principal Distribution
Amount shall equal the amount necessary to reduce the aggregate outstanding
principal amount of the notes to zero.
"Reserve Account" means the account designated as such, established
by the Issuer and maintained by the Indenture Trustee pursuant to Section
5.01(d).
"Reserve Account Excess Amount" means, with respect to any Payment
Date, the excess, if any, of (i) the amount on deposit in the Reserve Account
on such Payment Date (prior to
18
giving effect to any withdrawals therefrom relating to such Payment Date)
over (ii) the Specified Reserve Account Balance with respect to such Payment
Date.
"Reserve Account Pay-Down Date" means the Payment Date immediately
following the first Payment Date on which the amount on deposit in the Reserve
Account on such Payment Date (after giving effect to any withdrawals therefrom
relating to such Payment Date) is equal to or greater than the Outstanding
Amount of the Notes on such Payment Date (after giving effect to payments on
such Payment Date).
"Reserve Account Withdrawal Amount" means, with respect to each
Payment Date, the lesser of (a) the amount then on deposit in the Reserve
Account (after giving effect to any withdrawals therefrom relating to any
Reserve Account Excess Amount for such Payment Date) and (b) the excess, if
any, of (i) the aggregate amount required to be paid pursuant to Sections
5.06(b)(i) through (vii) on such Payment Date over (ii) the Available
Collections for such Payment Date; provided that, with respect to the Payment
Date occurring on the Reserve Account Pay-Down Date, the Reserve Account
Withdrawal Amount shall equal the amount necessary to reduce the Outstanding
Amount of the Notes to zero.
"Reserve Initial Deposit" means $[2,776,485.25].
"Responsible Officer" means the chairman of the board, the president,
any executive vice president, any vice president, the treasurer, any assistant
treasurer, the secretary, or any assistant secretary of the Servicer.
Responsible Officer of the Owner Trustee shall be as defined in the Indenture.
"Scheduled Payment" means, with respect to each Receivable, the
scheduled monthly payment amount set forth in the related Contract and
required to be paid by the Obligor during each Collection Period.
"Second Priority Principal Distribution Amount" means, with respect
to any Payment Date, the excess, if any, of (x) the aggregate Outstanding
Amount of the Class A Notes and the Class B Notes (as of the day immediately
preceding such Payment Date) over (y) the Pool Balance for such Payment Date.
"Securities" means the Notes and the Certificates.
"Securities Account Control Agreement" means the Securities Account
Control Agreement dated as of March 1, 2002 among the Issuer, the Indenture
Trustee and the Securities Intermediary.
"Securities Intermediary" means The Bank of New York, in its capacity
as the securities intermediary in the Securities Account Control Agreement.
"Securityholders" means the Noteholders and/or the
Certificateholders, as the context may require.
19
"Seller" means National City and its successors in interest, as
seller of the Receivables to the Depositor pursuant to the Receivables
Purchase Agreement.
"Servicer" means National City, as the servicer of the Receivables,
and each successor to National City (in the same capacity) pursuant to Section
7.03 or 8.03.
"Servicer Termination Event" shall have the meaning set forth in
Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the
Servicer delivered pursuant to Section 4.09, substantially in the form of
Exhibit C.
"Servicing Fee" means, with respect to any Payment Date, an amount
equal to the sum of (i) the product of one-twelfth of the Servicing Fee Rate
and the Pool Balance as of the first day of the related Collection Period, and
(ii) any late fees, prepayment charges, extension fees and other
administrative fees or similar charges collected on the Receivables.
"Servicing Fee Rate" means 1.00% per annum.
"Simple Interest Method" means the method of allocating the monthly
payments received with respect to a Receivable to interest in an amount equal
to the product of (i) the applicable APR, (ii) the period of time (expressed
as a fraction of a year, based on the actual number of days in the calendar
month and 365 or 366 days, as applicable, in the calendar year) elapsed since
the preceding payment was made under such Receivable and (iii) the outstanding
principal amount of such Receivable, and allocating the remainder of each such
monthly payment to principal.
"Specified Reserve Account Balance" means, with respect to each
Payment Date, an amount equal to 1.00% of the aggregate principal balance of
the Receivables as of the Cutoff Date; provided, however, that in no event
shall the Specified Reserve Account Balance be greater than the Note Balance
on that Payment Date after giving effect to all payments on that Payment Date.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., and its successors.
"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 Property, book-entry securities, uncertificated
securities or otherwise) and all proceeds of the foregoing.
"Trust Accounts" means the Collection Account, the Note Interest
Distribution Account, Principal Distribution Account and the Reserve Account.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of March 1, 2002, between the Depositor and the Owner Trustee.
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"Trust Officer" means, in the case of the Indenture Trustee, any
Officer within the Capital Markets Fiduciary Services Department of the
Indenture Trustee (or any successor department), including any Assistant Vice
President, Assistant Treasurer, 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, in
each case having direct responsibility for the administration of the Basic
Documents and, with respect to 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 the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
Section 1.02. Other Definitional Provisions.
(a) Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Indenture or, if not defined
therein, in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, 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.
(d) 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; "or" shall include "and/or"; and the term "including"
shall mean "including without limitation".
(e) 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.
(f) 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,
modified or supplemented and includes (in the case of
21
agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
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ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables.
(a) In consideration of the Issuer's delivery to or upon the order of
the Depositor of the Notes and the Certificates, the Depositor does hereby
transfer, set over and otherwise convey to the Issuer, without recourse
(subject to the obligations of the Depositor set forth herein), all right,
title and interest of the Depositor in and to:
(i) the Receivables and all moneys received thereon after the
Cutoff Date;
(ii) the security interests in the Financed Vehicles and any
accessions thereto granted by Obligors pursuant to the Receivables
and any other interest of the Depositor in such Financed Vehicles;
(iii) any Liquidation Proceeds and any other proceeds with
respect to the Receivables from claims on any physical damage,
credit life or disability insurance policies covering the Financed
Vehicles or the related Obligors, including any vendor's single
interest or other collateral protection insurance policy;
(iv) any property that shall have secured a Receivable and that
shall have been acquired by or on behalf of the Seller, the
Depositor, the Servicer or the Trust;
(v) the proceeds from any Servicer's errors and omissions
protection policy, any fidelity bond and any blanket physical damage
policy, to the extent such proceeds relate to any Financed Vehicle;
(vi) all documents and other items contained in the Receivable
Files;
(vii) all of the Depositor's rights (but not its obligations)
under the Receivables Purchase Agreement;
(viii) all funds on deposit from time to time in the Trust
Accounts and the Certificate Distribution Account and in all
investments therein and proceeds thereof (including all Investment
Earnings thereon); and
(ix) the proceeds of any and all of the foregoing
(collectively, with the assets listed in clauses (i) through (viii)
above, the "Conveyed Assets").
(b) It is the intention of the parties hereto that the transfer and
assignment contemplated by this Agreement shall constitute a sale of the
Receivables and other related property (for non-tax purposes) from the
Depositor to the Trust and the beneficial interest in and title to the
Receivables and the related property shall not be part of the Depositor's
estate in the event of the filing of a bankruptcy petition by or against the
Depositor under any bankruptcy law. In the event that, notwithstanding the
intent of the parties hereto, the transfer and assignment
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contemplated hereby is held not to be a sale (for non-tax purposes), this
Agreement shall constitute a security agreement under applicable law, and, in
such event, the Depositor shall be deemed to have granted, and the Depositor
hereby grants, to the Issuer a security interest in all accounts, money,
chattel paper, securities, instruments, documents, deposit accounts,
certificates of deposit, letters of credit, advices of credit, banker's
acceptances, uncertificated securities, general intangibles, contract rights,
goods and other property consisting of, arising from or relating to such
Conveyed Assets, for the benefit of the Trust and its assignees as security
for the Depositor's obligations hereunder and the Depositor consents to the
pledge of the foregoing Conveyed Assets under the Indenture to the Indenture
Trustee.
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ARTICLE III
THE RECEIVABLES
Section 3.01. Representations and Warranties of the Seller.
(a) The Seller has made each of the representations and warranties
set forth in Exhibit A hereto under the Receivables Purchase Agreement and has
consented to the assignment by the Depositor to the Issuer of the Depositor's
rights with respect thereto. 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 of such Receivables to the Indenture Trustee. Pursuant to Section
2.01 of this Agreement, the Depositor has transferred and conveyed to the
Issuer, as part of the assets of the Issuer, its rights under the Receivables
Purchase Agreement, including the representations and warranties of the Seller
therein as set forth in Exhibit A, upon which representations and warranties
the Issuer relies in accepting the Receivables and delivering the Securities,
together with all rights of the Depositor with respect to any breach thereof,
including the right to require the Seller to acquire Receivables in accordance
with the Receivables Purchase Agreement. It is understood and agreed that the
representations and warranties referred to in this Section shall survive the
transfer and delivery of the Receivables to the Issuer or the Custodian.
(b) The Seller hereby agrees that the Issuer shall have the right to
enforce any and all rights under the Receivables Purchase Agreement assigned
to the Issuer herein, including the right to cause the Seller to acquire any
Receivable with respect to which it is in breach of any of its representations
and warranties set forth in Exhibit A, directly against the Seller as though
the Issuer were a party to the Receivables Purchase Agreement, and the Issuer
shall not be obligated to exercise any such rights indirectly through the
Depositor.
Section 3.02. Representations and Warranties of the Depositor. The
Depositor makes the following representations and warranties, on which the
Issuer relies in accepting the Receivables and delivering the Securities. 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 by the Depositor to the Issuer and the pledge
thereof to the Indenture Trustee in accordance with the terms of the
Indenture:
(a) Title. The Depositor shall convey to the Issuer all right, title
and interest of the Depositor in and to the Receivables, including all right,
title and interest of the Depositor in and to the security interests in the
related Financed Vehicles.
(b) All Filings Made. The Depositor has caused all filings (including
UCC filings) to be made in Delaware with respect to the sale of the
Receivables to the Issuer and the pledge contemplated in the Basic Agreements
to the Indenture Trustee.
(c) Liens. The Depositor has not taken any actions to create, incur
or suffer to exist any Lien on or restriction on transferability of any
Receivable except for the Lien of the Indenture and the restrictions on
transferability imposed by this Agreement.
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(a) Perfection. The Depositor further makes all the representations,
warranties and covenants set forth in Exhibit F.
Section 3.03. Repurchase Upon Breach. Each of the Depositor, the
Owner Trustee, the Indenture Trustee, the Seller and the Servicer shall inform
the other parties to this Agreement promptly, in writing, upon the discovery
by it of any breach of the Seller's representations and warranties made
pursuant to Section 3.01 of this Agreement or Section 3.02 of the Receivables
Purchase Agreement, without regard to any limitation set forth in such
representation or warranty concerning the knowledge of the Seller as to the
facts stated therein. Unless any such breach shall have been cured by the last
day of the first Collection Period commencing after the discovery or notice
thereof, the Seller shall be obligated and, if necessary, the Issuer shall
enforce the obligations of the Seller under the Receivables Purchase
Agreement, to purchase as of such last day any Receivable materially and
adversely affected by any such breach; provided, however, that,
notwithstanding the qualification of any of the Seller's representations and
warranties made pursuant to Section 3.01 of this Agreement or Section 3.02 of
the Receivables Purchase Agreement as to the Seller's knowledge, a breach in
the substance of any such representation and warranty (without giving effect
to such qualification as to knowledge) shall require the Seller to perform its
repurchase or cure obligations set forth in this Section 3.03. In
consideration of the repurchase of any such Receivable, the Seller shall remit
the Purchase Amount to the Collection Account and notify in writing the
Indenture Trustee of such deposit in the manner specified in Section 5.04. The
sole remedy of the Issuer, the Indenture Trustee, the Noteholders, or the
Certificateholders with respect to the unpaid balance plus accrued interest on
any Receivable as to which a breach of a representation or warranty has
occurred pursuant to Section 3.01 of this Agreement or Section 3.02 of the
Receivables Purchase Agreement or the agreement contained in this Section
shall be to require the Seller to purchase such Receivable pursuant to this
Section or to repurchase such Receivable pursuant to the Receivables Purchase
Agreement.
Section 3.04. 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 Receivable Files, which are hereby constructively delivered
by the Issuer to the Indenture Trustee.
Section 3.05. 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 shall
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 automotive 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
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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. Nothing herein shall be deemed to require an initial review or any
periodic review by the Issuer or the Indenture Trustee of the Receivable
Files.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule C to this
Agreement 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 duly authorized representatives, attorneys or auditors a list
of locations of the Receivable Files and the related accounts, records and
computer systems maintained by the Servicer at such times during normal
business hours as the Issuer shall reasonably instruct, which does not
unreasonably interfere with the Servicer's normal operations or customer or
employee relations.
(c) Release of Documents. Upon instruction from the Indenture Trustee
or, if the Notes have been paid in full, from the Owner Trustee, the Servicer
shall release any Receivable File to the Indenture Trustee or the Owner
Trustee, as the case may be, or to the agent or designee of the Indenture
Trustee or the Owner Trustee, as the case may be, at such place or places as
the Indenture Trustee or the Owner Trustee, as applicable, may designate, as
soon as practicable without resulting in unreasonable interference with the
Servicer's normal operations or customer or employee relations. Upon the
release and delivery of any such document in accordance with the instructions
of the Indenture Trustee or the Owner Trustee, as the case may be, the
Servicer shall be released from any further liability and responsibility under
this Section 3.05 with respect to such documents and any other provision of
this Agreement if the fulfillment of the Servicer's responsibilities is
dependent upon possession of such documents, unless and until such time as
such documents shall be returned to the Servicer. In no event shall the
Servicer be responsible for any loss occasioned by the Indenture Trustee's or
the Owner Trustee's failure to return any Receivable File or any portion
thereof in a timely manner.
Section 3.06. 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 or, if the Notes have been paid in full, of the Owner
Trustee.
Section 3.07. Custodian's Indemnification. The Servicer, as
custodian, shall indemnify the Trust, the Owner Trustee and the Indenture
Trustee and each of their 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 officers, directors, employees or agents as the result of any
improper act or omission in any way relating to the maintenance and custody by
the Servicer as custodian of the Receivable Files; provided, however, that the
Servicer shall not be liable to the Trust, the Owner Trustee, the Indenture
Trustee or any such officer, director, employee or agent of the Trust, the
Owner Trustee or the Indenture Trustee for any portion of any such amount
resulting from the willful misfeasance, bad faith or negligence of the Owner
Trustee or the Indenture Trustee, as the case may be, or any
27
such officer, director, employee or agent of the Trust, the Owner Trustee
or the Indenture Trustee, as the case may be.
Indemnification under this Section shall survive the resignation or
removal of the Servicer or the termination of this Agreement with respect to
acts or omissions of such Servicer preceding such resignation or removal 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 3.08. 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 unless and until terminated pursuant
to this Section 3.08. If the Servicer or any successor Servicer shall resign
as Servicer in accordance with the provisions of this Agreement or if all of
the rights and obligations of the Servicer or any successor Servicer shall
have been terminated under Section 8.02, the appointment of such Servicer as
custodian may be terminated by the Issuer or by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by the
Owner Trustee or by Holders (other than the Seller or an Affiliate thereof) of
Certificates evidencing not less than 25% of the percentage interests in the
Certificates, in the same manner as the Indenture Trustee or such
Securityholders may terminate the rights and obligations of the Servicer under
Section 8.02. 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, only by written notification to the Servicer pursuant to
Section 8.02. As soon as practicable after any termination of such appointment
(but in no event more than ten (10) Business Days after any such termination
of 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. Notwithstanding the
termination of National City as custodian, the Indenture Trustee and the Owner
Trustee agree that, upon any such termination and for so long as National City
remains the Servicer hereunder, the Indenture Trustee or the Owner Trustee, as
the case may be, shall provide, or cause its agent to provide, access to the
Receivable Files to the Servicer for the purpose of enabling the Servicer to
perform its obligations under this Agreement with respect to the servicing of
the Receivables.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 4.01. Duties of Servicer. The Servicer, for the benefit of
the Issuer and the Indenture Trustee, shall manage, service, administer and
make collections on the Receivables and perform the other actions required by
the Servicer under this Agreement. The Servicer shall service the Receivables
in accordance with its customary and usual procedures and consistent with the
procedures employed by institutions that service motor vehicle retail
installment sale contracts and motor vehicle retail installment loan
contracts. The Servicer's duties shall include the collection and posting of
all payments, responding to inquiries of Obligors, investigating
delinquencies, sending payment coupons to Obligors, reporting any required 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 performing the other duties specified herein. The
Servicer also shall administer and enforce all rights of the holder of the
Receivables under the Receivables and the Dealer Agreements and assignment
forms. To the extent consistent with the standards, policies and procedures
otherwise required hereby, the Servicer shall follow its customary standards,
policies and procedures and shall have full power and authority, acting alone,
to do any and all things in connection with the managing, servicing,
administration and collection of the Receivables that it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered to execute and deliver, on behalf of itself,
the Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders
and the Noteholders, or any of them, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments with respect to the Receivables and with respect to the
Financed Vehicles; provided, however, that, notwithstanding the foregoing, the
Servicer shall not, except pursuant to an order from a court of competent
jurisdiction or as otherwise required by applicable law, execute documents
that would release an Obligor from payment of any unpaid amount due under any
Receivable, reduce the related APR or waive the right to collect the unpaid
balance of any Receivable from an Obligor. Notwithstanding the foregoing, in
connection with the settlement by the Servicer of a defaulted Receivable, the
Servicer may settle the account of such Receivable for less than the full
amount of principal and interest due on such Receivable, if in its reasonable
discretion, consistent with its customary servicing standards, it believes
that the acceptance of the settlement proceeds from the related Obligor would
result in the Trust or Indenture Trustee receiving a greater amount of
collections than the Liquidation Proceeds that would result from repossessing
and liquidating the related Financed Vehicle. The Servicer is hereby
authorized to commence, in its own name or in the name of the Issuer, the
Indenture Trustee, the Owner Trustee, the Certificateholders or the
Noteholders, a legal proceeding to enforce a Receivable pursuant to Section
4.03 or to commence or participate in any other legal proceeding (including a
bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a
Financed Vehicle. If the Servicer commences or participates in any such legal
proceeding in its own name, the Indenture Trustee or the Issuer shall
thereupon be deemed to have automatically assigned the applicable Receivable
to the Servicer solely for purposes of commencing or participating in such
proceeding as a party or claimant, and the Servicer is authorized and
empowered by the Indenture Trustee or the Issuer to execute and
29
deliver in the Indenture Trustee's or the Issuer's name any notices,
demands, claims, complaints, responses, affidavits or other documents or
instruments in connection with any such proceeding. If in any enforcement suit
or legal proceeding it shall be held that the Servicer may not enforce a
Receivable on the ground 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 Issuer, the Indenture
Trustee, the Certificateholders or the Noteholders. The Owner Trustee and the
Indenture 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 of Receivable Payments; Modifications of
Receivables.
(a) Consistent with the standards, policies and procedures required
by this Agreement, 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 motor vehicle receivables that it
services for itself and otherwise act with respect to the Receivables in such
a manner as will, in the reasonable judgment of the Servicer, maximize the
amount to be received by the Trust with respect thereto. The Servicer is
authorized in its discretion to waive any prepayment charge, late payment
charge or any other similar fees that may be collected in the ordinary course
of servicing any Receivable.
(b) The Servicer may grant payment extensions on the Receivables only
to the extent permissible in its extension policy attached hereto as Exhibit
D; provided, however, that no such extension shall extend the final payment
date on any Receivable beyond the last day of the Collection Period ending six
months prior to the Class C Final Scheduled Payment Date.
(c) Upon any extension not in accordance with this Section, the
Servicer shall be required to purchase the related Receivable in accordance
with Section 4.07.
Section 4.03. Realization upon Receivables. The Servicer shall,
consistent with customary servicing procedures and the terms of this
Agreement, act with respect to the Receivables in such manner as, in the
Servicer's reasonable judgment, will maximize the receipt of principal and
interest on all Receivables and Liquidation Proceeds in respect of Liquidated
Receivables. Consistent with the standards, policies and procedures required
by this Agreement, the Servicer shall use its best efforts to repossess or
otherwise convert the ownership of and liquidate any Financed Vehicle securing
a Receivable with respect to which the Servicer shall have determined that
eventual payment in full is unlikely. The Servicer shall begin such
repossession and conversion procedures as soon as practicable after default on
such Receivable in accordance with its customary procedures; provided,
however, that the Servicer may elect not to repossess a Financed Vehicle
within such time period if in its good faith judgment it determines that the
proceeds ultimately recoverable with respect to such Receivable would be
increased by forbearance. In repossessing or otherwise converting the
ownership of a Financed Vehicle and liquidating a Receivable, the Servicer is
authorized to follow such customary practices and procedures as it shall deem
necessary or advisable, consistent with the standard of
30
care required by Section 4.01, which practices and procedures may include
the sale of the related Financed Vehicle at public or private sale, the
submission of claims under an insurance policy and other actions by the
Servicer in order to realize upon a Receivable; provided, however, that, in
any case in which the Financed Vehicle shall have suffered damage, the
Servicer shall not expend funds in connection with any repair or towards the
repossession of such Financed Vehicle unless it shall determine in its
reasonable judgment that such repair or repossession shall increase the
related Liquidation Proceeds by an amount materially greater than the expense
for such repair or repossession. The Servicer shall be entitled to recover all
expenses incurred by it that are reasonably allocated to repossessing and
liquidating a Financed Vehicle into cash proceeds, but only out of the cash
proceeds of the sale of such Financed Vehicle or any deficiency obtained from
the related Obligor.
Section 4.04. [Reserved].
Section 4.05. Maintenance of Security Interests in Financed Vehicles.
(a) 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. In the event that the assignment of a Receivable to the Indenture
Trustee is insufficient, without a notation on the related Financed Vehicle's
certificate of title, or without fulfilling any additional administrative
requirements under the laws of the State in which such Financed Vehicle is
located, to perfect a security interest in the related Financed Vehicle in
favor of the Indenture Trustee, the Servicer hereby agrees that the
designation of National City as the secured party on the certificate of title
is in its capacity as agent of the Indenture Trustee.
(b) The Depositor, the Owner Trustee, the Indenture Trustee and the
Servicer hereby agree that, upon the occurrence of a Servicer Termination
Event, the Controlling Party may take or cause to be taken such actions as
may, in the opinion of counsel to the Controlling Party, be necessary to
perfect or re-perfect the security interests in the Financed Vehicles in the
name of the Issuer or the Indenture Trustee, including by amending the title
documents of the Financed Vehicles. The Servicer hereby agrees to pay all
expenses related to such perfection or reperfection and to take all action
necessary therefor. If such expenses are not paid within 15 days after
delivery of any invoice therefor, such expenses shall be paid pursuant to
Section 5.06(b)(ix).
Section 4.06. Covenants of Servicer. By its execution and delivery of
this Agreement, the Servicer hereby covenants as follows (upon which covenants
the Issuer, the Indenture Trustee and the Owner Trustee rely in accepting the
Receivables and delivering the applicable Securities):
(a) Liens in Force. No Financed Vehicle securing a Receivable shall
be released in whole or in part from the security interest granted by such
Receivable, except upon payment in full of such Receivable or as otherwise
contemplated herein;
31
(b) No Impairment. The Servicer shall do nothing to impair the rights
of the Trust in the property of the Trust;
(c) No Amendments. The Servicer shall not extend or otherwise amend
the terms of any Receivable, except in accordance with Section 4.02; and
(d) Restrictions on Liens. The Servicer shall not (A) create, incur
or suffer to exist, or agree to create, incur or suffer to exist, or consent
to or permit in the future (upon the occurrence of a contingency or otherwise)
the creation, incurrence or existence of any Lien on or restriction on
transferability of any Receivable except for the Lien of the Indenture and the
restrictions on transferability imposed by this Agreement or (B) other than as
contemplated herein, sign or file any UCC financing statements in any
jurisdiction that names National City or the Depositor as a debtor, and any
Person other than the Depositor, the Indenture Trustee or the Issuer as a
secured party, or sign any security agreement authorizing any secured party
thereunder to file any such financing statement, in each case with respect to
the Receivables or the related property.
Section 4.07. Purchase of Receivables Upon Breach. Upon discovery by
any of the Servicer, the Seller, the Depositor, the Owner Trustee or the
Indenture Trustee of a breach of any of the covenants set forth in Sections
4.02(b), 4.04, 4.05(a) or 4.06, the party discovering such breach shall give
prompt written notice to the other; provided, however, that the failure to
give any such notice shall not affect any obligation of the Servicer under
this Section 4.07. On or before the last day of the first Collection Period
commencing after its discovery or receipt of notice of the breach of any
covenant set forth in Sections 4.02(b), 4.04, 4.05(a) or 4.06 that materially
and adversely affects the interests of the Issuer, the Indenture Trustee, the
Owner Trustee, the Certificateholders or the Noteholders in any Receivable,
the Servicer shall, unless such breach shall have been cured in all material
respects by such date, purchase from the Issuer the Receivable affected by
such breach. In consideration of the purchase of any such Receivable, the
Servicer shall remit the related Purchase Amount into the Collection Account,
with written notice to the Indenture Trustee of such deposit, in the manner
specified in Section 5.04. Subject to Section 7.02, it is understood and
agreed that the obligation of the Servicer to purchase any Receivable with
respect to which such a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against the Servicer for
such breach available to the Issuer, the Owner Trustee, the Indenture Trustee,
the Certificateholders or the Noteholders.
Section 4.08. Servicing Fee. The Servicing Fee shall be payable to
the Servicer on each Payment Date. That part of the Servicing Fee based on the
Servicing Fee Rate shall be calculated on the basis of a 360-day year
comprised of twelve 30-day months. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities under this Agreement
(including taxes imposed on the Servicer and expenses incurred in connection
with distributions and reports made by the Servicer to the Owner Trustee and
the Indenture Trustee), except to the extent otherwise expressly provided
herein.
Section 4.09. Servicer's Certificate. Not later than 10:00 a.m. (New
York City time) on each Determination Date, the Servicer shall deliver to the
Owner Trustee, the Indenture Trustee and the Depositor, with a copy to each
Rating Agency and Xxxxxxx Lynch, Pierce, Xxxxxx &
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Xxxxx Incorporated, a Servicer's Certificate containing all information
necessary to make the distributions to be made on the related Payment Date
pursuant to Section 5.06 for the related Collection Period and any other
information the Indenture Trustee may reasonably request. Such Servicer's
Certificate shall be certified by a Responsible Officer of the Servicer that
the information provided is complete and no defaults have occurred. With
respect to each Collection Period, Receivables to be purchased by the Servicer
or to be repurchased by the Seller and each Receivable that became a
Liquidated Receivable, in each case, during such Collection Period shall be
identified by the Servicer by account number with respect to such Receivable
(as specified in the applicable Schedule of Receivables).
Section 4.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event.
(a) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency, within 120 days after the end of the
Servicer's fiscal year, an Officer's Certificate signed by a Responsible
Officer of the Servicer, stating that (i) a review of the activities of the
Servicer during the preceding 12-month period (or such shorter period in the
case of the first such Officer's Certificate) and of the performance of its
obligations under this Agreement has been made under such officer's
supervision and (ii) to such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout
such period or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency, promptly after having obtained knowledge
thereof, but in no event later than two Business Days thereafter, written
notice in an Officer's Certificate of any event that is, or with the giving of
notice or lapse of time or both would become, a Servicer Termination Event
under Section 8.01.
Section 4.11. Annual Independent Accountants' Report. The Servicer
shall cause a firm of independent certified public accountants, which may also
render other services to the Servicer or its Affiliates, to deliver to the
Owner Trustee, the Indenture Trustee and each Rating Agency, within 120 days
after the end of each fiscal year, commencing with the fiscal year ending
December 31, 2002, a report addressed to the Board of Directors of the
Servicer, the Owner Trustee and the Indenture Trustee, to the effect that such
firm has audited the books and records of the Servicer and issued its report
thereon and that (i) such audit was made in accordance with generally accepted
auditing standards and accordingly included such tests of the accounting
records and such other auditing procedures as such firm considered necessary
in the circumstances; (ii) the firm is independent of the Depositor and the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants; (iii) a review in accordance with
agreed-upon procedures was made of the Servicer's Certificates relating to
such fiscal year, including the delinquency, default and loss statistics
required to be specified therein and, except as disclosed in the accountants'
report, no exceptions or errors in the Servicer's Certificates were found; and
(iv) a review in accordance with agreed-upon procedures was made of the
Servicer's compliance with its servicing obligations in this Agreement,
including without limitation the obligations of the Servicer set forth in
Section
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4.02(b) hereof, and, except as disclosed in the accountants' report, no
exceptions to such compliance were found.
Section 4.12. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to representatives of the
Owner Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders reasonable access to the documentation regarding the Receivables
and the related Trust property. Access shall be afforded without charge, but
only upon reasonable request, which does not unreasonably interfere with the
Servicer's normal business operations or employee or customer relations, 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.
Section 4.13. Term of Servicer. The Servicer hereby covenants and
agrees to act as Servicer under, and for the term of, this Agreement.
Section 4.14. Access to Information Regarding Trust and Basic
Documents. The Servicer shall furnish to the Owner Trustee from time to time
such information regarding the Trust or the Basic Documents as the Owner
Trustee shall reasonably request. Upon request, the Indenture Trustee shall
furnish to the Owner Trustee annually a copy of the Note Register; provided,
however, the Indenture Trustee shall not be obligated to furnish a copy of the
Note Register more than once each calendar year. The Servicer shall furnish to
the Owner Trustee copies of all documents and reports required to be provided
by the Servicer pursuant to this Article IV of the Sale and Servicing
Agreement.
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ARTICLE V
DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
Section 5.01. Establishment of Accounts.
(a) The Servicer, for the benefit of the Noteholders and the
Certificateholders, 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 the Certificateholders.
(b) The Issuer, for the benefit of the Noteholders, shall cause the
Indenture Trustee to establish with and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Note Interest Distribution
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders.
(c) The Issuer, for the benefit of the Noteholders, shall cause the
Indenture Trustee to establish with and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Principal Distribution Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Noteholders.
(d) The Issuer, for the benefit of the Noteholders, shall cause the
Indenture Trustee to establish with 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.
(e) [Reserved].
(f) [Reserved].
(g) Funds on deposit in the Collection Account and the Reserve
Account shall be invested by the Indenture Trustee in Eligible Investments
selected in writing by the Servicer; provided, however, that if the Servicer
fails to select any Eligible Investment, the Indenture Trustee shall invest
such funds in an Eligible Investment described in clause (d) of the definition
of "Eligible Investment" herein. All such Eligible Investments shall be held
by the Indenture Trustee for the benefit of the Noteholders and/or the
Certificateholders, as applicable. Other than as permitted in writing by the
Rating Agencies, funds on deposit in the Trust Accounts shall be invested in
Eligible Investments that will mature not later than the Business Day
immediately preceding the next Payment Date. If the Servicer shall so request,
funds deposited in a Trust Account on a day that immediately precedes a
Payment Date upon the maturity of any Eligible Investments may, at the
discretion of the Indenture Trustee, be invested overnight.
(h) In the event that there are Net Investment Losses in Eligible
Investments chosen by the Servicer, the Servicer shall deposit into the
Collection Account, no later than one (1) Business Day prior to the Payment
Date, the amount of the Net Investment Losses. The Indenture Trustee shall not
be held liable in any way for any Net Investment Losses, except for losses
attributable to the Indenture Trustee's failure to make payments on such
Eligible
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Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as Indenture Trustee, in accordance with their
terms.
(i) (i) The Indenture Trustee shall possess all right, title and
interest in all funds and investment property on deposit from time to time in
or credited to the Trust Accounts and in all proceeds thereof (including all
income thereon) and all such funds, investment property, proceeds and income
shall be part of the Trust Estate, except as otherwise set forth herein. The
Trust Accounts shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders and, as applicable, the
Certificateholders. If, at any time, any Trust Account 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 from the account that is no longer an Eligible Deposit
Account to the Trust Account.
(ii) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, and subject to
the terms of the Securities Account Control Agreement, 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(i)(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 Physical Property
shall be delivered to the Indenture Trustee in accordance with paragraph (a)
of the definition of "Delivery" and shall be held, pending maturity or
disposition, solely by the Indenture Trustee or a securities intermediary (as
such term is defined in Section 8-102 of the UCC) acting solely for the
Indenture Trustee;
(C) any Trust Account Property that is a book-entry security held
through the Federal Reserve System pursuant to federal book-entry regulations
shall be delivered in accordance with paragraph (b) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee, pending maturity
or disposition, through continued book-entry registration of such Trust
Account Property as described in such paragraph;
(D) any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause (C) above shall
be delivered to the Indenture Trustee in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the Indenture Trustee,
pending maturity or disposition, through continued registration of the
Indenture Trustee's (or its nominee's) ownership of such security; and
(E) any Trust Account Property that is a security entitlement shall
be delivered in accordance with paragraph (d) of the definition herein of
"Delivery" and shall be held pending
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maturity or disposition by the Indenture Trustee or a securities
intermediary acting solely for the Indenture Trustee.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the
Indenture Trustee, following a Servicer Termination Event to instruct
the Indenture Trustee to make withdrawals and payments from the Trust
Accounts and the Certificate Distribution Account for the purpose of
withdrawing any amounts deposited in error into such accounts.
Section 5.02. Collections. The Servicer shall remit to the Collection
Account all payments by or on behalf of the Obligors with respect to the
Receivables (other than Purchased Receivables), all Liquidation Proceeds and
any subsequent Recoveries on the Business Day prior to the Payment Date for so
long as (i) National City is the Servicer, (ii) the Servicer has the Minimum
Required Rating, and (iii) no Servicer Termination Event shall have occurred
and be continuing. Notwithstanding anything herein to the contrary, so long as
the conditions set forth in clauses (i) through (iii) above are satisfied, the
may make any remittance pursuant to the preceding sentence net of the
Servicing Fee payable to the Servicer on the related Payment Date. The
Servicer If (i) National City is no longer the Servicer, (ii) National City no
longer has the Minimum Required Rating, or (iii) a Servicer Termination Event
shall have occurred and be continuing, the Servicer shall remit to the
Collection Account all payments by or on behalf of the Obligors with respect
to the Receivables (other than Purchased Receivables), all Liquidation
Proceeds and any subsequent Recoveries within two Business Days of receipt
thereof. Notwithstanding anything herein to the contrary, so long as National
City is the Servicer, National City may withhold from deposit into the
Collection Account any amounts indicated on the related Servicer's Certificate
as being due and payable to the Seller. For purposes of this Article V, the
phrase "payments by or on behalf of Obligors" shall mean payments made with
respect to the Receivables by Persons other than the Servicer or the Seller.
Section 5.03. Application of Collections.
(a) All payments received from or on behalf of an Obligor during each
Collection Period with respect to each Receivable (other than a Purchased
Receivable), shall be applied to interest, fees and principal in accordance
with the Simple Interest Method and the Servicer's customary procedures.
Generally, subject to the foregoing sentence, the Servicer applies obligor
payments, first to interest, second to late charges and certain other charges
and third to unpaid principal.
(b) Without limitation of Section 5.03(a), if an Obligor on a
Receivable, in addition to making the payment due thereon in a Collection
Period, makes one or more additional scheduled payments in such Collection
Period, the additional scheduled payments made in such Collection Period shall
be treated as a partial principal prepayment and shall be applied to reduce
the principal balance of such Receivable in such Collection Period and, unless
otherwise requested by such Obligor, such Obligor shall not be required to
make any scheduled payment in respect of such Receivable for the number of due
dates corresponding to the number of such additional scheduled payments (the
"Paid-Ahead Period"). During the Paid-Ahead Period, interest shall
37
continue to accrue on the Principal Balance of such Receivable, as reduced
by the application of such additional scheduled payments.
Section 5.04. Purchase Amounts. For so long as (i) National City is
the Servicer, (ii) National City has the Minimum Required Rating, and (iii) no
Servicer Termination Event shall have occurred and be continuing, the Servicer
and the Seller shall be entitled pursuant to the first sentence of Section
5.02 to deposit or cause to be deposited the aggregate Purchase Amounts in the
Collection Account on a monthly basis rather than within two Business Days of
receipt. If, however, (i) National City no longer is the Servicer, (ii)
National City no longer has the Minimum Required Rating, or (iii) a Servicer
Termination Event shall have occurred and be continuing, the Servicer or the
Seller shall deposit or cause to be deposited in the Collection Account the
aggregate Purchase Amount with respect to Purchased Receivables within two
Business Days of receipt and the Servicer shall deposit therein all amounts to
be paid under Section 4.07 and Section 9.01 within two Business Days of
receipt.
Section 5.05. Permitted Withdrawals from Collection Account. On each
Distribution Date, the Indenture Trustee, at the direction of the Servicer,
shall, in addition to, and prior to, the withdrawals from the Collection
Account on such Distribution Date pursuant to Section 5.06(b), make the
following withdrawals from the Collection Account, for the following purposes:
(a) to withdraw any amount not required to be deposited in the
Collection Account or deposited therein in error; and
(b) to clear and terminate the Collection Account in connection with
the termination of this Agreement.
The Servicer shall keep and maintain an accounting, as part of the
monthly Servicer's Certificate prepared by the Servicer, for the purpose of
justifying any withdrawals from the Collection Account pursuant to this
Section 5.05. It is understood that whenever reference is made in this
Agreement to withdrawals by the Servicer from the Collection Account and
distributions by the Servicer of amounts so withdrawn, such withdrawals and
distributions shall be made or caused to be made by the Indenture Trustee in
accordance with written instructions from the Servicer signed by a Responsible
Officer of the Servicer.
Section 5.06. Distributions.
(a) On each Determination Date, the Servicer shall calculate all
amounts required to be deposited pursuant to this Section and deliver a
Servicer's Certificate pursuant to Section 4.09.
(b) On each Payment Date, the Servicer shall instruct the Indenture
Trustee in writing (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
4.09) to make payments, deposits and distributions on such Payment Date, to
the extent of funds on deposit in the Collection Account with respect to such
Payment Date (including funds, if any, deposited therein from the Reserve
Account pursuant to Section 5.07(b), pursuant to clauses (i) through (x)
below, in the following order and priority:
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(i) to the Servicer, from Available Funds, the Servicing
Fee for the related Collection Period (and any accrued and unpaid
Servicing Fees from prior Collection Periods);
(ii) to the Note Interest Distribution Account, for payment
to the Class A Noteholders pursuant to Section 5.06(c)(i), from the
Available Funds remaining after the application of clause (i), the
Class A Noteholders' Interest Distributable Amount;
(iii) to the Principal Distribution Account, for
distribution pursuant to Section 5.06(d), from the Available Funds
remaining after the application of clauses (i) and (ii), the First
Priority Principal Distribution Amount, if any;
(iv) to the Note Interest Distribution Account, for payment
to the Class B Noteholders pursuant to Section 5.06(c)(ii), from the
Available Funds remaining after the application of clauses (i)
through (iii), the Class B Noteholders' Interest Distributable
Amount;
(v) to the Principal Distribution Account, for distribution
pursuant to Section 5.06(d), from the Available Funds remaining after
the application of clauses (i) through (iv), the Second Priority
Principal Distribution Amount, if any, reduced by any First Priority
Principal Distribution Amount paid pursuant to clause (iii) above;
(vi) to the Note Interest Distribution Account, for payment
to the Class C Noteholders pursuant to Section 5.06(c)(iii), from the
Available Funds remaining after the application of clauses (i)
through (v), the Class C Noteholders' Interest Distributable Amount;
(vii) to the Principal Distribution Account, for
distribution pursuant to Section 5.06(d), from the Available Funds
remaining after the application of clauses (i) through (vi), the
Regular Note Principal Distribution Amount, reduced by any First
Priority Principal Distribution Amount paid pursuant to clause (iii)
above and any Second Priority Principal Distribution Amount paid
pursuant to clause (v) above;
(viii) to the Reserve Account, from the Available
Collections remaining after the application of clauses (i) through
(vii), any deficiency in the Specified Reserve Account Balance;
(ix) to the applicable party, from the Available
Collections remaining after the application of clauses (i) through
(viii), any accrued and unpaid fees, expenses and indemnification
expenses owed to such party under any of the Basic Documents
(including legal fees and expenses), to the extent not paid pursuant
to clauses (i) through (viii); and
(x) the remainder, if any, of the Available Collections and
the Reserve Account Excess Amount, if any, to the Certificate
Distribution Account for distribution to the Holders of the
Certificates.
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Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Collection Account and the Principal
Distribution Account hereunder until all amounts distributable on the
Certificates have been distributed to the Holders of the Certificates.
(c) On each Payment Date, the Servicer shall instruct the Indenture
Trustee in writing (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
4.09) to withdraw the funds on deposit in the Note Interest Distribution
Account with respect to the Collection Period preceding such Payment Date and
make payments and distributions on such date pursuant to clauses (i) through
(iii) below, in the following order and priority:
(i) to the Class A Noteholders, the Class A Noteholders'
Interest Distributable Amount for such Payment Date;
(ii) to the Class B Noteholders, the Class B Noteholders'
Interest Distributable Amount for such Payment Date; and
(iii) to the Class C Noteholders, the Class C Noteholders'
Interest Distributable Amount for such Payment Date.
(d) On each Payment Date, the Servicer shall instruct the Indenture
Trustee in writing (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
4.09) to withdraw the funds on deposit in the Principal Distribution Account
with respect to the Collection Period preceding such Payment Date and make
payments and distributions on such date pursuant to clauses (i) through (iii)
below, in the following order and priority:
(i) to the Class A Noteholders, in the following order and
priority, the Class A Principal Distributable Amount for such Payment
Date:
(A) to the Class A-1 Noteholders on account of
principal until the Outstanding Amount of the Class A-1
Notes is reduced to zero;
(B) to the Class A-2 Noteholders on account of
principal until the Outstanding Amount of the Class A-2
Notes is reduced to zero;
(C) to the Class A-3 Noteholders on account of
principal until the Outstanding Amount of the Class A-3
Notes is reduced to zero; and
(D) to the Class A-4 Noteholders on account of
principal until the Outstanding Amount of the Class A-4
Notes is reduced to zero;
(ii) to the Class B Noteholders, the Class B Principal
Distributable Amount for such Payment Date; and
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(iii) to the Class C Noteholders, the Class C Principal
Distributable Amount for such Payment Date.
Notwithstanding the foregoing, subject to the provisions of Section
5.04(b) of the Indenture, (A) following the occurrence and during the
continuation of an Event of Default specified in Section 5.01(i), 5.01(ii),
5.01(iv) or 5.01(v) of the Indenture which has resulted in an acceleration of
the Notes (or following the occurrence of any such event after an Event of
Default specified in Section 5.01(iii) of the Indenture has occurred and the
Notes have been accelerated), the Servicer shall instruct the Indenture
Trustee to transfer the funds on deposit in the Collection Account remaining
after the application of clauses 5.06(b)(i) and (ii) above to the Principal
Distribution Account to the extent necessary to reduce the principal amount of
all the Class A Notes to zero, or, if the Class A Notes shall have been paid
in full, to transfer the funds on deposit in the Collection Account remaining
after the application of clauses 5.06(b)(i) through (iv) above to the
Principal Distribution Account to the extent necessary to reduce the principal
amount of all the Class B Notes to zero, or, if the Class A Notes and Class B
Notes shall have been paid in full, to transfer the funds on deposit in the
Collection Account remaining after the application of clauses 5.06(b)(i)
through (vi) above to the Principal Distribution Account to the extent
necessary to reduce the principal amount of all the Class C Notes to zero, (B)
following the occurrence and during the continuation of an Event of Default
specified in Section 5.01(iii) of the Indenture, which has resulted in an
acceleration of the Notes, the Servicer shall instruct the Indenture Trustee
to transfer the funds on deposit in the Collection Account remaining after the
application of clauses 5.06(b)(i) through (vii) above to the Principal
Distribution Account to the extent necessary to reduce the principal amount of
all the Notes to zero, and (C) in the case of an event described in clause (A)
or (B), the Holders of the Certificates will not receive any distributions
until the principal amount and accrued interest on all the Notes has been paid
in full. Notwithstanding clauses (A) through (D) of Section 5.06(d)(i), if the
Notes shall have been accelerated pursuant to Section 5.02 of the Indenture,
amounts payable under Section 5.06(d)(i) shall be applied to the repayment of
principal of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes pro rata on the basis of the respective Outstanding
Amounts of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes.
Section 5.07. Reserve Account.
(a) On or prior to the Closing Date the Issuer shall cause to have
deposited an amount equal to the Reserve Initial Deposit into the Reserve
Account from the net proceeds of the sale of the Securities. The Reserve
Account shall be an asset of the Issuer.
(b) On each Payment Date, the Servicer shall instruct the Indenture
Trustee in writing (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
4.09) to withdraw the Reserve Account Withdrawal Amount, if any, and the
Reserve Account Excess Amount, if any, from the Reserve Account and deposit
such Reserve Account Withdrawal Amount and such Reserve Account Excess Amount
into the Collection Account for distribution in the order of priority set
forth in Section 5.06(b) no later than 12:00 noon, New York City time, on the
Business Day prior to the related Payment Date.
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(c) In the event that, on any Payment Date, the amount on deposit in
the Reserve Account shall be less than the Specified Reserve Account Balance,
the Available Collections remaining after the payment of the amounts set forth
in Section 5.06(b)(i) through (vii), up to an amount equal to such shortfall,
shall be deposited by the Indenture Trustee to the Reserve Account on such
Payment Date.
(d) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.06 following payment in full of all of the Outstanding
Amount of the Notes until the Pool Balance is reduced to zero. Following the
payment in full of the aggregate Outstanding Amount of the Notes and of all
other amounts owing or to be distributed hereunder or under the Indenture or
the Trust Agreement to Noteholders and the termination of the Trust, any
amount then allocated to the Reserve Account shall be paid to the Certificate
Distribution Account for distribution to the Certificateholders.
Section 5.08. Statements to Securityholders. On each Determination
Date, the Servicer shall provide to the Indenture Trustee (with a copy to each
Rating Agency, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and each
Paying Agent (if any)) for the Indenture Trustee to forward to each Noteholder
of record as of the most recent Record Date and to the Owner Trustee (with a
copy to each Paying Agent (if any)) for the Owner Trustee to forward to each
Certificateholder of record as of the most recent Record Date a statement
substantially in the form of Exhibit B setting forth at least the following
information as to the Securities to the extent applicable:
(a) the amount of collections received with respect to the
Receivables during the related Collection Period and allocable to principal
for each Class of Notes on such Payment Date;
(b) the amount of collections received with respect to the
Receivables during the related Collection Period and allocable to interest for
each Class of Notes on such Payment Date;
(c) the Outstanding Amount of each Class of Notes and the Note Pool
Factor for each such Class as of the close of business on the preceding
Payment Date, after giving effect to payments allocated to principal reported
under clause (a) above;
(d) the amount of the Servicing Fee paid to the Servicer on such
Payment Date;
(e) the amount of the First Priority Principal Distribution Amount,
if any, for such Payment Date;
(f) the amount of the Second Priority Principal Distribution Amount,
if any, for such Payment Date;
(g) the amount of the Regular Note Principal Distribution Amount for
such Payment Date;
(h) the aggregate amounts of Realized Losses, if any, and Cram Down
Losses, if any, separately identified, with respect to the related Collection
Period;
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(i) the Pool Balance as of the close of business on the last day of
the related Collection Period, after giving effect to payments allocated to
principal reported under clause (a) above;
(j) the balance of the Reserve Account on the related Determination
Date after giving effect to deposits and withdrawals to be made on such
Payment Date, if any;
(k) the amount of any deposit to the Reserve Account and the amount
and application of any funds withdrawn from the Reserve Account, in each case
with respect to such Payment Date;
(l) the aggregate principal balance of all Receivables that became
Liquidated Receivables or Purchased Receivables during the related Collection
Period;
(m) the aggregate principal balance and number of Receivables that
are 30 to 59 days, 60 to 89 days or 90 days or more delinquent as of the last
day of the related Collection Period;
(n) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall, the Class A-3 Interest Carryover Shortfall, the
Class A-4 Interest Carryover Shortfall, the Class B Interest Carryover
Shortfall and the Class C Interest Carryover Shortfall, in each case after
giving effect to payments on such Payment Date, and any change in such amounts
from the preceding statement;
(o) the Class A-1 Principal Carryover Shortfall, the Class A-2
Principal Carryover Shortfall, the Class A-3 Principal Carryover Shortfall,
the Class A-4 Principal Carryover Shortfall, the Class B Principal Carryover
Shortfall and the Class C Principal Carryover Shortfall, in each case after
giving effect to payments on such Payment Date, and any change in such amounts
from the preceding statement;
(p) the aggregate Purchase Amounts for Receivables, if any, that were
or are to be purchased during or with respect to such Collection Period;
(q) the aggregate Principal Balance and number of all Receivables
with respect to which the related Financed Vehicle was repossessed; and
(r) the aggregate Principal Balance and number of Receivables with
respect to which the Servicer granted an extension.
Each amount set forth on the Payment Date Statement under clauses
(a), (b), (d), (e), (f), (g), (n) or (o) above shall also be expressed as a
dollar amount per $1,000 of original principal balance of a Note.
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ARTICLE VI
THE DEPOSITOR
Section 6.01. Representations of Depositor. The Depositor makes the
following representations to the Issuer, the Servicer, the Indenture Trustee
and the Seller. The Issuer relies on such representations in accepting the
Receivables and delivering the Securities. Such representations speak as of
the execution and delivery of this Agreement and as of the Closing Date, and
shall survive the sale, transfer and assignment of the Receivables by the
Depositor to the Issuer and the pledge thereof to the Indenture Trustee in
accordance with the terms of 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 Delaware, 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.
(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 where the failure to do so would
materially and adversely affect the Depositor's ability to transfer the
Receivables to the Trust pursuant to this Agreement or the validity or
enforceability of the Receivables.
(c) Power and Authority. The Depositor has the corporate power and
authority to execute and deliver this Agreement and the other Basic Documents
to which it is a party and to carry out their respective terms; the Depositor
has full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Issuer, and the Depositor shall have duly
authorized such sale and assignment to the Issuer by all necessary corporate
action; and the execution, delivery and performance of this Agreement and the
other Basic Documents to which the Depositor is a party have been duly
authorized by the Depositor by all necessary corporate action.
(d) Binding Obligation. This Agreement and the other Basic Documents
to which the Depositor is a party, when duly executed and delivered by the
other parties hereto and thereto, shall constitute legal, valid and binding
obligations of the Depositor, enforceable against the Depositor in accordance
with their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and
to general principles of equity (whether applied in a proceeding at law or in
equity).
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the other Basic Documents and the fulfillment of the
terms of this Agreement and the other Basic Documents shall not conflict with,
result in any breach of any of the terms or provisions of or constitute (with
or without notice or lapse of time, or both) a default under, the certificate
of incorporation or bylaws of the Depositor, or any indenture, agreement,
mortgage, deed of trust or other instrument to which the Depositor is a party
or by which it is bound; or
44
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument, other than this Agreement and the other
Basic Documents; or violate any law, order, rule or regulation applicable to
the Depositor of any court or federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened, against the Depositor
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the Depositor or its
properties: (i) asserting the invalidity of this Agreement or any other Basic
Document; (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by
this Agreement or any other Basic Document; (iii) seeking any determination or
ruling that might materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or enforceability of, this
Agreement or any other Basic Document; or (iv) seeking to adversely affect the
federal income tax attributes of the Trust, the Notes or the Certificates.
(g) No Consents. The Depositor is not required to obtain the consent
of any other party or any consent, license, approval, registration,
authorization, or declaration of or with any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
Section 6.02. Corporate Existence. During the term of this Agreement,
the Depositor will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby. In
addition, all transactions and dealings between the Depositor and its
Affiliates will be conducted on an arm's-length basis.
Section 6.03. Liability of Depositor; Indemnities. The Depositor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under this Agreement (which shall not
include distributions on account of the Notes or the Certificates).
Section 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor. Any Person with which the Depositor shall merge or
consolidate or which the Depositor shall permit to become the successor to the
Depositor's business shall execute an agreement of assumption of every
obligation of the Depositor under this Agreement and the other Basic
Documents. Whether or not such assumption agreement is executed, such
successor Person shall be the successor to the Depositor under this Agreement
without the execution or filing of any document or any further act on the part
of any of the parties to this Agreement. The Depositor shall provide prompt
notice of any merger, consolidation or succession pursuant to this Section
6.04 to the Owner Trustee, the Indenture Trustee, the Servicer, the
Securityholders and
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the Rating Agencies. Notwithstanding the foregoing, the Depositor shall
not merge or consolidate with any other Person or permit any other Person to
become a successor to the Depositor's business unless (w) immediately after
giving effect to such transaction, no representation or warranty made pursuant
to Section 3.02 or 6.01 shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation
of such transaction), (x) the Depositor shall have delivered to the Owner
Trustee, the Indenture Trustee and the Servicer 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 6.04 and
that all conditions precedent provided for in this Agreement relating to such
transaction have been complied with, (y) the Rating Agency Condition shall
have been satisfied and (z) the Depositor shall have delivered to the Owner
Trustee, the Indenture Trustee and the Servicer 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 to preserve and protect the interest of the Trust in the
Receivables and reciting the details of such filings or (B) no such action is
necessary to preserve and protect such interest.
Section 6.05. 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 be under no 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 6.06. Depositor May Own Securities. The Depositor and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Securities 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 Basic Document.
Section 6.07. Depositor to Provide Copies of Relevant Securities
Filings. The Depositor shall provide or cause to be provided to the Servicer a
copy of any document filed by the Depositor subsequent to the date hereof with
the Securities and Exchange Commission pursuant to the Securities Act of 1933
or the Securities Exchange Act of 1934 that relate specifically to the Trust,
the Notes or the Certificates.
Section 6.08. Amendment of Depositor's Organizational Documents. The
Depositor shall not amend its organizational documents except in accordance
with the provisions thereof.
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ARTICLE VII
THE SERVICER
Section 7.01. Representations of Servicer. The Servicer makes the
following representations upon which the Issuer is deemed to have relied in
acquiring the Receivables. Such representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee in accordance with the terms of the Indenture.
(a) Organization and Good Standing. The Servicer is a national
banking association duly organized and validly existing as a banking
institution under the laws of the United States and continues to hold a valid
certificate to do business as such. The Servicer is duly authorized to own its
properties and transact its business and is in good standing in each
jurisdiction in which the character of the business transacted by it or any
properties owned or leased by it requires such authorization and in which the
failure to be so authorized would have a material adverse effect on the
business, properties, assets, or condition (financial or other) of the
Servicer and its subsidiaries, considered as one enterprise. The Servicer has,
and at all relevant times had, the power, authority and legal right to
acquire, own, and service the Receivables.
(b) Licenses and Approvals. The Servicer has obtained all necessary
licenses and approvals, in all jurisdictions where the failure to do so would
materially and adversely affect the Servicer's ability to acquire, own and
service the Receivables.
(c) Power and Authority. The Servicer has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it
is a party and to carry out their respective terms; and the execution,
delivery and performance of this Agreement and the other Basic Documents to
which it is a party have been duly authorized by the Servicer by all necessary
action.
(d) Binding Obligation. This Agreement and the other Basic Documents
to which it is a party constitute legal, valid and binding obligations of the
Servicer, enforceable against the Servicer in accordance with their respective
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and to general principles of equity whether
applied in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the other Basic Documents to which it is a party and the
fulfillment of their respective terms shall not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, the articles of association
or bylaws of the Servicer, or any indenture, agreement, mortgage, deed of
trust or other instrument to which the Servicer is a party or by which it is
bound; or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument, other than this Agreement and the other
Basic Documents, or violate any law, order, rule or regulation applicable to
the Servicer of any
47
court or federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or any of
its properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Servicer's knowledge, threatened, against the Servicer
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement or any of the other
Basic Documents; (ii) seeking to prevent the issuance of the Securities or the
consummation of any of the transactions contemplated by this Agreement or any
of the other Basic Documents; (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement or any
of the other Basic Documents; or (iv) seeking to adversely affect the federal
income tax or other federal, state or local tax attributes of the Securities.
Section 7.02. Indemnities of Servicer. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer and the representations made by the Servicer under
this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Securityholders 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, excluding any losses incurred in
connection with the sale of any repossessed Financed Vehicles in a
commercially reasonable manner and in compliance with the terms of this
Agreement.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, and their
respective officers, directors, agents and employees, and the Securityholders,
from and against any taxes that may at any time be asserted against any of
such parties with respect to the transactions contemplated in this Agreement,
including any sales, gross receipts, tangible or intangible personal property,
privilege or license taxes (but not including any federal or other income
taxes, including franchise taxes asserted with respect to, and as of the date
of, the transfer of the Receivables to the Trust or the issuance and original
sale of the Securities), and any reasonable costs and expenses in defending
against the same.
(c) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the
Securityholders and any of the officers, directors, employees or agents of the
Issuer, the Owner Trustee, the Depositor 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 gross negligence,
willful misfeasance or bad faith of 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.
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For purposes of this Section, in the event of the termination of the
rights and obligations of National City (or any successor thereto pursuant to
Section 7.03) as Servicer pursuant to Section 8.02, or the 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 8.03.
Indemnification under this Section shall survive the resignation or
removal of the Servicer or the termination of this Agreement with respect to
acts of the Servicer prior thereto, and shall include reasonable fees and
expenses of counsel and reasonable 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 (i) into which the Servicer may be merged
or consolidated, (ii) resulting from any merger or consolidation to which the
Servicer shall be a party, (iii) that acquires by conveyance, transfer or
lease substantially all of the assets of the Servicer or (iv) succeeding to
the business of the Servicer, which Person shall execute an agreement of
assumption to perform every obligation of the Servicer under this Agreement,
shall be the successor to the Servicer under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties to this Agreement. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section 7.03 to the Owner
Trustee, the Indenture Trustee and each Rating Agency. Notwithstanding the
foregoing, the Servicer shall not merge or consolidate with any other Person
or permit any other Person to become a successor to the Servicer's business
unless (i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 7.01 shall have been
breached (for purposes hereof, such representations and warranties shall speak
as of the date of the consummation of such transaction) and no event that,
after notice or lapse of time or both, would become a Servicer Termination
Event shall have occurred, (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 7.03 and that all conditions
precedent provided for in this Agreement relating to such transaction have
been complied with and (iii) the Servicer shall have delivered to the Owner
Trustee and the Indenture Trustee an Opinion of Counsel stating that either
(A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary to preserve and
protect the interest of the Trust and the Indenture Trustee, respectively, in
the assets of the Trust and reciting the details of such filings or (B) no
such action shall be necessary to preserve and protect such interest.
Section 7.04. Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of its directors, officers,
employees or agents shall be under any liability to the Issuer, the Depositor,
the Indenture Trustee, the Owner Trustee, the Noteholders or the
Certificateholders, except as provided in this Agreement, for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement; provided, however, that this provision shall not protect the
Servicer against any liability that
49
would otherwise be imposed by reason of a breach of this Agreement or
willful misfeasance, bad faith or negligence in the performance of duties. The
Servicer and any director, officer, employee or agent of the Servicer may
conclusively rely in good faith on the written advice of counsel or on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising under this Agreement.
(b) The parties expressly acknowledge and consent to the Indenture
Trustee simultaneously acting in the capacity of successor Servicer and
Indenture Trustee. The Indenture Trustee may, in such capacities, discharge
its separate functions fully, without hindrance or regard to conflict of
interest principles, duty of loyalty principles or other breach of fiduciary
duties to the extent that any such conflict or breach arises from the
performance by the Indenture Trustee of express duties set forth in this
Agreement in any of such capacities.
Section 7.05. [Reserved].
Section 7.06. Servicer Not to Resign.
(a) Subject to the provisions of Section 7.03, the Servicer shall not
resign from the obligations and duties imposed on it by this Agreement as
Servicer except upon a determination that the performance of its duties under
this Agreement shall no longer be permissible under applicable law.
(b) Notice of any determination that the performance by the Servicer
of its duties hereunder is no longer permitted under applicable law 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 by the Servicer to the Owner Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No resignation of the
Servicer shall become effective until a successor Servicer acceptable to the
Controlling Party shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 8.03. If no Servicer has been
appointed within 30 days of resignation or removal, the Controlling Party may
petition any court of competent jurisdiction for such appointment.
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ARTICLE VIII
DEFAULT
Section 8.01. Servicer Termination Events. For purposes of this
Agreement, the occurrence and continuance of any of the following shall
constitute a "Servicer Termination Event":
(a) any failure by the Servicer to deposit into the Collection
Account any proceeds or payment required to be so delivered under the terms of
this Agreement that continues unremedied for a period of five Business Days
after written notice is received by the Servicer or after discovery of such
failure by a Responsible Officer of the Servicer;
(b) failure by the Servicer to deliver to the Owner Trustee, the
Indenture Trustee and the Seller the Servicer's Certificate by the applicable
Determination Date, or to observe any covenant or agreement set forth in
Section 4.06, which failure (i) materially and adversely affects the rights of
the Securityholders and (ii) continues unremedied for a period of thirty days
after knowledge thereof by the Servicer or after the date on which written
notice of such failure requiring the same to be remedied shall have been given
to the Servicer by any of the Owner Trustee, the Indenture Trustee or
Noteholders evidencing not less than 25% of the Outstanding Amount of the
Notes;
(c) failure on the part of the Servicer duly to observe or perform
any other covenants or agreements of the Servicer set forth in this Agreement,
which failure (i) materially and adversely affects the rights of the
Securityholders and (ii) continues unremedied for a period of 60 days after
discovery of such failure by a Responsible Officer of the Servicer or after
the date on which written notice of such failure requiring the same to be
remedied shall have been given to the Servicer by any of the Owner Trustee,
the Indenture Trustee, Noteholders evidencing not less than 25% of the
Outstanding Amount of the Controlling Class or, if no Notes are outstanding,
the Holders of Certificates evidencing not less than 25% of the percentage
interests in the Certificates; or
(d) the occurrence of an Insolvency Event with respect to the
Servicer.
Section 8.02. Consequences of a Servicer Termination Event. If a
Servicer Termination Event shall occur, the Indenture Trustee may, and at the
direction of Noteholders evidencing 25% of the Outstanding Amount of the
Controlling Class or, if no Notes are Outstanding, the Holders of Certificates
evidencing not less than 25% of the percentage interests in the Certificates,
shall terminate all of the rights and obligations of the Servicer under this
Agreement by notice in writing to the Servicer. On or after the receipt by the
Servicer of such written notice, all authority, power, obligations and
responsibilities of the Servicer under this Agreement automatically shall pass
to, be vested in and become obligations and responsibilities of the successor
Servicer appointed by the Controlling Party; provided, however, that such
successor Servicer shall have no liability with respect to any obligation that
was required to be performed by the terminated Servicer prior to the date that
such successor Servicer becomes the Servicer or any claim of a third party
based on any alleged action or inaction of the terminated Servicer. The
51
successor Servicer is authorized and empowered by this Agreement to execute
and deliver, on behalf of the terminated Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, whether to complete the transfer and endorsement
of the Receivables and related documents to show the Indenture Trustee (or the
Owner Trustee if the Notes have been paid in full) as lienholder or secured
party on the related certificates of title of the Financed Vehicles or
otherwise. The terminated Servicer agrees to cooperate with the successor
Servicer in effecting the termination of the responsibilities and rights of
the terminated Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all money and property held by
the Servicer with respect to the Receivables and other records relating to the
Receivables, including any portion of the Receivables File held by the
Servicer and a computer tape in readable form as of the most recent Business
Day containing all information necessary to enable the successor Servicer to
service the Receivables. The terminated Servicer shall also provide the
successor Servicer access to Servicer personnel and computer records in order
to facilitate the orderly and efficient transfer of servicing duties.
Section 8.03. Appointment of Successor Servicer.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.02 or upon the resignation of the Servicer
pursuant to Section 7.06, the Indenture Trustee shall be the successor in all
respects to the Servicer in its capacity as Servicer under this Agreement and
shall be subject to all the rights, responsibilities, restrictions, duties,
liabilities and termination provisions relating to the Servicer under this
Agreement, except as otherwise stated herein. The Depositor, the Owner
Trustee, the Indenture Trustee and such successor Servicer shall take such
action, consistent with this Agreement, as shall be necessary to effectuate
any such succession. If a successor Servicer is acting as Servicer hereunder,
it shall be subject to termination under Section 8.02 upon the occurrence of
any Servicer Termination Event after its appointment as successor Servicer.
(b) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.02 or upon the resignation of the Servicer
pursuant to Section 7.06, or if the Indenture Trustee is legally unable to act
as Servicer, the Controlling Party may exercise at any time its right to
appoint a successor to the Servicer, and shall have no liability to the Owner
Trustee, the Indenture Trustee, the Servicer, the Depositor, any Noteholders,
any Certificateholders or any other Person if it does so. Notwithstanding the
above, if the Indenture Trustee shall be legally unable or unwilling to act as
Servicer, the Indenture Trustee, the Owner Trustee or Noteholders evidencing
25% of the Outstanding Amount of the Controlling Class or, if no Notes are
outstanding, the Holders of Certificates evidencing not less than 25% of the
percentage interests in the Certificates, may petition a court of competent
jurisdiction to appoint any Eligible Servicer as the successor to the
Servicer. Pending appointment pursuant to the preceding sentence, the
Indenture Trustee shall act as successor Servicer unless it is legally unable
to do so, in which event the outgoing Servicer shall continue to act as
Servicer until a successor has been appointed and accepted such appointment.
The Trustee shall be entitled to withdraw from the Collection Account and
remit to the successor Servicer or such other party entitled thereto all
reasonably incurred Servicer transition costs.
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(c) Upon appointment, the 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.
Section 8.04. Notification to Securityholders. Upon any termination
of, or appointment of a successor to, the Servicer pursuant to this Article
VIII, the Owner Trustee shall give prompt written notice thereof to the
Certificateholders, and the Indenture Trustee shall give prompt written notice
thereof to the Noteholders and each Rating Agency.
Section 8.05. Waiver of Past Defaults. Noteholders evidencing not
less than a majority of the Outstanding Amount of the Controlling Class or, if
no Notes are Outstanding, the Holders of Certificates evidencing not less than
a majority of the percentage interests in the Certificates may, on behalf of
all Securityholders, 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 Termination Event
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto.
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ARTICLE IX
TERMINATION
Section 9.01. Optional Purchase of All Receivables.
(a) On each Determination Date as of which the Pool Balance is equal
to or less than 5% of the Initial Pool Balance, the Servicer shall have the
option to purchase the Receivables. To exercise such option, the Servicer
shall deposit to the Collection Account pursuant to Section 5.04 an amount
equal to the aggregate Purchase Amount for the Receivables (including
Receivables that became Liquidated Receivables during the related Collection
Period) and shall succeed to all interests in and to the Receivables. The
exercise of such option shall effect a retirement, in whole but not in part,
of all outstanding Notes.
(b) As described in Article IX of the Trust Agreement, notice of any
termination of the Trust shall be given by the Servicer to the Owner Trustee
and the Indenture Trustee as soon as practicable after the Servicer has
received notice thereof.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, the Indenture Trustee
pursuant to this Agreement.
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ARTICLE X
MISCELLANEOUS
Section 10.01. Amendment.
(a) This Agreement may be amended by the Depositor, the Servicer, the
Indenture Trustee and the Issuer, without the consent of any of the
Noteholders or the Certificateholders, 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 the Certificateholders; 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 Certificateholder; provided further that such action shall
be deemed not to adversely affect in any material respect the interests of any
Noteholder or Certificateholder and no Opinion of Counsel to that effect shall
be required if the person requesting the amendment obtains a letter from the
Rating Agencies stating that the amendment would not result in the downgrading
or withdrawal of the ratings then assigned to the Notes.
(b) This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Issuer, with the prior written consent of the
Indenture Trustee, Noteholders holding not less than a majority of the
Outstanding Amount of the Class A Notes, Noteholders holding not less than a
majority of the Outstanding Amount of the Class B Notes, Noteholders holding
not less than a majority of the Outstanding Amount of the Class C Notes and
the Holders of outstanding Certificates evidencing not less than a majority of
the percentage interests in the Certificates, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Securityholders; provided, however, that no such amendment shall (i) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Securityholders or (ii) reduce the aforesaid
percentage of the Outstanding Amount of the Class A Notes, the Class B Notes
or the Class C Notes, the Noteholders of which are required to consent to any
such amendment, without the consent of the Noteholders holding all Outstanding
Class A Notes, Class B Notes and Class C Notes or (iii) reduce the aforesaid
percentage of the percentage interests in the Certificates, the Holders of
which are required to consent to any such amendment, without the consent of
the Holders of all outstanding Certificates.
Promptly after the execution of any amendment or consent, the
Administrator shall furnish written notification of the substance of such
amendment or consent to each Securityholder, the Indenture Trustee and each
Rating Agency.
It shall not be necessary for the consent of Securityholders 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.
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Prior to the execution of any amendment to this Agreement, the Owner
Trustee, on behalf of the Issuer, and the Indenture Trustee shall be entitled
to receive and rely upon an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement and the Opinion of
Counsel referred to in Section 10.02(i)(A). The Owner Trustee, on behalf of
the Issuer, and the Indenture Trustee may, but shall not be obligated to,
enter into any such amendment that 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.
(a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such a
manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Issuer and the Indenture Trustee in
the Receivables and the proceeds thereof. The Servicer 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. In addition, the Seller and the
Depositor hereby authorize the Issuer at any time and from time to time to
prepare and file financing statements and amendments thereto in any
jurisdiction as may be necessary or desirable to preserve, maintain and
protect the interests of the Issuer and the Indenture Trustee in the
Receivables and the proceeds thereof.
(b) None of the Seller, the Depositor or the Servicer shall change
its name, identity or corporate structure in any manner that would, could or
might make any financing statement or continuation statement filed in
accordance with paragraph (a) above seriously misleading within the meaning of
ss. 9-506 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) Each of the Seller, the Depositor and the Servicer shall have an
obligation to give the Owner Trustee and the Indenture Trustee at least five
Business Days' prior written notice of any change in the jurisdiction of its
organization if, as a result of such change of jurisdiction, 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 each such Receivable, including
payments and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on or with respect to each
such Receivable and the amounts from time to time deposited in the Collection
Account in respect of each such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables, the
Servicer's master computer records (including
56
any backup archives) that refer to a Receivable shall be coded to reflect
that such Receivable is part of the portfolio of Receivables that is the
subject of this Agreement and is owned by National City Auto Receivables Trust
2002-A and pledged by National City Auto Receivables Trust 2002-A to the
Indenture Trustee for the benefit of the Noteholders. Indication of such
Receivables' inclusion in the portfolio 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 repurchased.
(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 motor
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 sold 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
upon reasonable notice and at any time during normal business hours, which
does not unreasonably interfere with the Servicer's normal operations or
customer or employee relations, 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
the Indenture Trustee, within fifteen 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 prior to such request
indicating removal of Receivables from the Trust.
The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(i) promptly after the execution and delivery of this Agreement
and each amendment hereto, an Opinion of Counsel stating that, in
the opinion of such counsel, either (A) all financing statements and
continuation statements have been executed and filed that are
necessary to fully preserve and protect the interest of the Trust
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; and
(ii) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three
months after the Cutoff Date, an Opinion of Counsel, dated as of a
date during such 90-day period, stating that, in the opinion of such
counsel, either (A) all financing statements and continuation
statements have been executed and filed that are necessary to fully
preserve and protect the interest of the Trust 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.
57
Each Opinion of Counsel referred to in clause (i) or (ii) above shall
specify any action necessary (as of the date of such opinion) to be taken in
the following year to preserve and protect such interest.
Section 10.03. Notices. All demands, notices, communications and
instructions upon or to the Depositor, the Servicer, the Issuer, the Owner
Trustee, the Indenture Trustee or any Rating Agency under this Agreement shall
be in writing, personally delivered, faxed and followed by first class mail,
or mailed by certified mail, return receipt requested, and shall be deemed to
have been duly given upon receipt (a) in the case of the Depositor, to
National City Vehicle Receivables Inc., 0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxx
00000, Attention: Xxxxxx Xxxxx; (b) in the case of the Servicer, Administrator
and Custodian, to National City Bank, 0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxx
00000, Attention: Xxxxxx Xxxxx, (c) in the case of the Indenture Trustee, to
The Bank of New York, 0 Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Asset Backed Finance Unit; (d) in the case of the Issuer or the
Owner Trustee, at the Corporate Trust Administration Department (as defined in
the Trust Agreement); (e) in the case of Xxxxx'x, to 00 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: ABS Monitoring Department; (f) in the case of
Fitch, Fitch Ratings, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, XX 00000
Attention: ABS Surveillance; and (g) in the case of Standard & Poor's, to 00
Xxxxx Xxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed
Surveillance Department; or, as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
Section 10.04. Assignment by the Depositor or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided
in Sections 6.04 and 7.03 herein 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.
Section 10.05. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Depositor, the Servicer, the
Seller, the Issuer, the Owner Trustee, the Certificateholders, the Indenture
Trustee and the Noteholders, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the 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.
Section 10.07. Counterparts. This Agreement may be executed by the
parties hereto in any number of counterparts, each of which when so executed
and delivered shall be an original, but all of which shall together constitute
but one and the same instrument.
58
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, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 10.10. Assignment by Issuer. The Depositor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee in accordance with
the terms of the Indenture for the benefit of the Noteholders of all right,
title and interest of the Issuer in, to and under the Receivables or the
assignment of any or all of the Issuer's rights and obligations hereunder to
the Indenture Trustee.
Section 10.11. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the parties hereto shall not, prior to the date
that is one year and one day after the termination of this Agreement with
respect to the Issuer or the Depositor, acquiesce, petition or otherwise
invoke or cause the Issuer or the Depositor to invoke the process of any court
or government authority for the purpose of commencing or sustaining a case
against the Issuer or 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 Issuer or
the Depositor or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer or the Depositor.
Section 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Wilmington Trust Company in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee of the
Issuer have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer in accordance
with the priorities set forth herein. For all purposes of this Agreement, in
the performance of its duties or obligations hereunder or in the performance
of any duties or obligations of the Issuer hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Bank of New York, not in its individual
capacity but solely as Indenture Trustee, and in no event shall The Bank of
New York 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 in accordance
with the priorities set forth herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first
above written.
NATIONAL CITY AUTO RECEIVABLES TRUST 2002-A
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: /s/ W. Xxxxx Xxxxxxxxxx
-----------------------------------------
Name: W. Xxxxx Xxxxxxxxxx
Title: Vice President
NATIONAL CITY VEHICLE RECEIVABLES INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: V.P., Secretary
NATIONAL CITY BANK
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
60
SCHEDULE A
[RESERVED]
SCHEDULE B
Final Schedule of Receivables
[On file with the Indenture Trustee]
SCHEDULE C
Location of Receivable Files
National City Bank
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
EXHIBIT A
Representations and Warranties of the Seller
Under Section 3.02 of the Receivables Purchase Agreement
EXHIBIT B
Form of Payment Date Statement to Securityholders
National City Bank
National City Auto Receivables Trust 2002-A Payment Date Statement to
Securityholders
Principal Distribution Amount
-----------------------------------------------------------------------------
Class A-1 Notes: ($ per $1,000 original principal balance)
Class A-2 Notes: ($ per $1,000 original principal balance)
Class A-3 Notes: ($ per $1,000 original principal balance)
Class A-4 Notes: ($ per $1,000 original principal balance)
Class B Notes: ($ per $1,000 original principal balance)
Class C Notes: ($ per $1,000 original principal balance)
Interest Distribution Amount
-----------------------------------------------------------------------------
Class A-1 Notes: ($ per $1,000 original principal balance)
Class A-2 Notes: ($ per $1,000 original principal balance)
Class A-3 Notes: ($ per $1,000 original principal balance)
Class A-4 Notes: ($ per $1,000 original principal balance)
Class B Notes: ($ per $1,000 original principal balance)
Class C Notes: ($ per $1,000 original principal balance)
First Priority Principal
Distribution Amount ($ per $1,000 original principal balance)
Second Priority Principal
Distribution Amount ($ per $1,000 original principal balance)
Regular Note Principal
Distribution Amount ($ per $1,000 original principal balance)
Class A-1 Interest
Carryover Shortfall ($ per $1,000 original principal balance)
Class A-2 Interest
Carryover Shortfall ($ per $1,000 original principal balance)
Class A-3 Interest
Carryover Shortfall ($ per $1,000 original principal balance)
Class A-4 Interest
Carryover Shortfall ($ per $1,000 original principal balance)
Class B Interest
Carryover Shortfall ($ per $1,000 original principal balance)
Class C Interest
Carryover Shortfall ($ per $1,000 original principal balance)
Class A-1 Principal
Carryover Shortfall ($ per $1,000 original principal balance)
Class A-2 Principal
Carryover Shortfall ($ per $1,000 original principal balance)
Class A-3 Principal
Carryover Shortfall ($ per $1,000 original principal balance)
Class A-4 Principal
Carryover Shortfall ($ per $1,000 original principal balance)
Class B Principal
Carryover Shortfall ($ per $1,000 original principal balance)
Class C Principal
Carryover Shortfall ($ per $1,000 original principal balance)
Payment Date Payment
Shortfall
Reserve Account
Withdrawal Shortfall
Note Balance:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Class B Notes:
Class C Notes:
Note Pool Factor:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Class B Notes:
Class C Notes:
Servicing Fee ($ per $1,000 original principal balance)
Pool Balance
Realized Losses
Repossessed Receivables
Liquidated Receivables or Purchased Receivables
Receivables granted extensions or deferments
Purchase Amounts
Reserve Account Balance
Amount Deposited to Reserve Account
Principal Balance of Receivables that were delinquent:
30 to 59 days
60 to 89 days
90 days or more
Amount Withdrawn from Reserve Account
Mandatory Redemption Amount
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class B Notes
EXHIBIT C
FORM OF SERVICER'S CERTIFICATE
[To be Provided by Servicer]
EXHIBIT D-1
EXTENSION POLICY
EXHIBIT D-2
FORM OF DEALER AGREEMENTS
[On file with the Trustee]
EXHIBIT D-3
FORM OF ASSIGNMENT
[On file with the Trustee]
EXHIBIT E
[RESERVED]
EXHIBIT F
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
1. General. The Sale and Servicing Agreement creates a valid and
continuing security interest (as defined in the UCC) in all of the Depositor's
right, title and interest in and to the Receivables in favor of the Issuer
which, (a) is enforceable upon execution of the Sale and Servicing Agreement
against creditors of and purchasers from the Depositor as such enforceability
may be limited by applicable Debtor Relief Laws, now or hereafter in effect,
and by general principles of equity (whether considered in a suit at law or in
equity), and (b) upon filing of the financing statements described in clause 4
below will be prior to all other Liens (other than Liens permitted pursuant to
clause 5 below).
2. Characterization. The Receivables constitute "tangible chattel
paper" within the meaning of UCC Section 9-102. The Depositor has taken all
steps necessary to perfect its security interest against the Obligor in the
Financed Vehicles securing the Receivables.
3. Creation. Immediately prior to the conveyance of the Receivables
pursuant to the Sale and Servicing Agreement, the Depositor owns and has good
and marketable title to, or has a valid security interest in, the Receivables
free and clear of any Lien, claim or encumbrance of any Person.
4. Perfection. The Depositor has caused or will have caused, within
ten days of the Closing Date, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the security interest granted to the Issuer
under the Sale and Servicing Agreement in the Receivables.
5. Priority. Other than the security interests granted to the Issuer
pursuant to the Sale and Servicing Agreement, the Depositor has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of
the Receivables, the Depositor has not authorized the filing of and is not
aware of any financing statements against the Depositor that includes a
description of collateral covering the Receivables other than any financing
statement (i) relating to the security interests granted to the Issuer under
the Sale and Servicing Agreement, (ii) that has been terminated or (iii) that
has been granted pursuant to the terms of the Basic Documents. None of the
tangible chattel paper that constitutes or evidences the Receivables has any
marks or notations indicating that they are pledged, assigned or otherwise
conveyed to any Person other than Indenture Trustee.