Exhibit 10.3
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FORM OF RECEIVABLES SERVICING AGREEMENT
among
[ ]
as Servicer,
WHOLE AUTO LOAN TRUST [ ]
as Issuer,
and
BEAR ▇▇▇▇▇▇▇ ASSET BACKED FUNDING INC.
dated as of [ , ]
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TABLE OF CONTENTS
Page
ARTICLE I
TRANSACTION SUMMARY
ARTICLE II
DEFINITIONS
SECTION 2.1 Definitions..........................................1
SECTION 2.2 Other Definitional Provisions........................6
ARTICLE III
COLLECTIONS
SECTION 3.1 Collections..........................................7
SECTION 3.2 Application of Collections...........................7
SECTION 3.3 Net Deposits.........................................7
SECTION 3.4 Monthly Receivables Tape and Servicer Report.........7
ARTICLE IV
SERVICING OF RECEIVABLES
SECTION 4.1 Appointment and Duties of the Servicer...............8
SECTION 4.2 Collection and Allocation of Receivable Payments.....8
SECTION 4.3 Realization upon Receivables.........................9
SECTION 4.4 Physical Damage Insurance............................9
SECTION 4.5 Maintenance of Security Interests in Financed
Vehicles.............................................9
SECTION 4.6 Custody of Receivable Files..........................9
SECTION 4.7 Duties of the Servicer as Custodian.................10
SECTION 4.8 Instructions; Authority To Act......................10
SECTION 4.9 Custodian's Indemnification.........................10
SECTION 4.10 Effective Period and Termination....................11
SECTION 4.11 Access to Certain Documentation and Information
Regarding Receivables...............................11
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SECTION 4.12 Servicer Fee........................................11
SECTION 4.13 Servicer Expenses...................................11
SECTION 4.14 Appointment of Subservicer..........................11
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of [ ]......12
ARTICLE VI
COVENANTS
SECTION 6.1 Affirmative Covenants of the Servicer...............13
SECTION 6.2 Reporting Requirements of the Servicer..............14
SECTION 6.3 Annual Statement as to Compliance; Notice
of Default..........................................14
SECTION 6.4 Annual Independent Certified Public
Accountants' Report.................................14
SECTION 6.5 Negative Covenants of the Servicer..................15
SECTION 6.6 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002..........................16
ARTICLE VII
THE SERVICER
SECTION 7.1 Liability of the Servicer; Indemnities..............16
SECTION 7.2 Merger or Consolidation of, or Assumption of
Obligations of, Seller or Servicer..................17
SECTION 7.3 Limitation on Liability of Servicer and Others......18
SECTION 7.4 [ ] Not To Resign as Servicer..............18
ARTICLE VIII
DEFAULT
SECTION 8.1 Servicer Default....................................19
SECTION 8.2 Appointment of Successor............................20
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ARTICLE IX
BREACH OF WARRANTY AND REPURCHASES
SECTION 9.1 Breach of Warranty and Repurchases..................20
SECTION 9.2 Purchase by Servicer of Receivables upon Breach.....21
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments..........................................21
SECTION 10.2 Protection of Title to Issuer.......................22
SECTION 10.3 Notices.............................................24
SECTION 10.4 No Waiver; Remedies.................................24
SECTION 10.5 Binding Effect; Assignability.......................24
SECTION 10.6 Governing Law.......................................24
SECTION 10.7 Severability........................................24
SECTION 10.8 Nonpetition Covenants...............................24
SECTION 10.9 Execution in Counterparts...........................25
SECTION 10.10 Limitation of Liability of Owner Trustee...........25
SECTION 10.11 Beneficiary........................................25
SECTION 10.12 Headings...........................................25
EXHIBIT A - Sample Servicer Report
EXHIBIT B - Schedule of Contracts
EXHIBIT C - Legal Opinion of Counsel to [ ]
SCHEDULE A - Location of Receivables Files
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RECEIVABLES SERVICING AGREEMENT dated as of [ , ] among [ ], a [ ], as
"Servicer", WHOLE AUTO LOAN TRUST [ ], a Delaware statutory trust, as the
"Issuer" and BEAR ▇▇▇▇▇▇▇ INVESTMENT ASSET BACKED FUNDING INC., a Delaware
corporation (the "Depositor").
The following Servicing Agreement (the "Agreement") describes the terms
and conditions of the transaction defined above.
ARTICLE I
TRANSACTION SUMMARY
The following summary of the transaction is intended for general
information purposes. The specific terms of the transaction are explained in
detail elsewhere in this Agreement. Capitalized terms used in this summary are
defined in Article II.
The Servicer has previously sold automobile retail installment sale
contracts to [ ] and has continued to service those contracts. The Depositor
has caused those contracts to be transferred on the date hereof to the Issuer,
and the Servicer will continue to service those contracts pursuant to this
Agreement.
ARTICLE II
DEFINITIONS
SECTION 2.1 Definitions. In this Agreement, the following words and
phrases shall have the following meanings unless the context otherwise
requires:
"Adverse Claim" means any mortgage, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (consensual,
statutory or other), charge, security arrangement, or any other encumbrance or
other right or claim in, of or on any Person's assets or properties in favor
of any other Person, of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, and any
financing lease having substantially the same economic effect as any of the
foregoing).
"Agreement" means this Receivables Servicing Agreement, as it may be
amended from time to time.
"Amount Financed" means the amount advanced under a Receivable toward the
purchase price of the Financed Vehicle and any related costs.
"APR" of a Receivable means the annual rate of finance charges stated in
the related Contract.
"Business Day" means any day other than a Saturday or a Sunday or a day
on which banks are not authorized to be open or required to be closed in New
York City or Wilmington, Delaware.
"Certificateholder" means a registered holder of a certificate issued by
the Issuer, which certificate evidences a beneficial interest in the Issuer.
"Certificate of Title" means any certificate, instrument or other
document issued by a state or other governmental authority in respect of any
motor vehicle for the purpose of evidencing the ownership of, or any Adverse
Claim in or against, such motor vehicle.
"Closing Date" means [ ].
"Collection" means any amount paid by an Obligor or any other party with
respect to a Receivable, including Liquidation Proceeds.
"Collection Period" means a calendar month; provided that the first
Collection Period will commence on [ ] and end on and include [ ].
"Contract" means, with respect to any Receivable, any and all
instruments, agreements, invoices, or other writings pursuant to which such
Receivable arises or which evidence such Receivable. Each Contract is listed
on the Schedule of Contracts.
"Credit and Collection Policy" means the credit and collection policies
and practices of the Servicer and any successor Servicer relating to
Receivables and Contracts, such policies being subject to unilateral revision
or modification at any time by the Servicer or successor Servicer.
"Cumulative Net Loss Ratio" means for the last day of any Collection
Period, a fraction expressed as a percentage, the numerator of which is the
sum of all Net Losses for the current and prior Collection Periods and the
denominator of which is the Pool Balance as of the Cut-Off Date.
"Cut-Off Date" means [ ].
"Dealer" means the dealer who sold a Financed Vehicle and who originated
and assigned the related Receivable to [ ] under an existing agreement between
such dealer and [ ].
"Deposit Account" means account number [ ] at [ ], or such other account
designated in writing from time to time by the Indenture Trustee, at the
direction of [ ], as administrator under the Administration Agreement, to the
Servicer.
"Final Scheduled Maturity Date" means [ ].
"Finance Charges" means, with respect to any Receivable and its related
Contract, any finance, interest or similar charges owing by an Obligor
pursuant to such Contract, including, without limitation, any charge payable
in connection with any extension or adjustment under
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such Contract (without
regard to whether any such extension or adjustment is permitted under the
terms of this Agreement).
"Financed Vehicle" means an automobile or light-duty truck, together with
all accessions thereto, securing an Obligor's indebtedness under the
applicable Contract.
"Indenture" means the Indenture dated as of [ ] between the Issuer and [
], as Indenture Trustee.
"Indenture Trustee" means [ ], as indenture trustee under the Indenture,
and any successor indenture trustee under the Indenture.
"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.
"Insurance Policy" means (i) any comprehensive and collision, fire, theft
or other insurance policy maintained by an Obligor in which the Servicer is
named as loss payee with respect to one or more Financed Vehicles, and (ii)
any credit, life or disability insurance maintained by an Obligor in
connection with any Contract.
"Issuer" means Whole Auto Loan Trust [ ], a Delaware statutory trust.
"Liquidated Receivable" means any Receivable liquidated by the Servicer
through the sale of a Financed Vehicle or otherwise written off in accordance
with the Credit and Collection Policy.
"Liquidation Proceeds" means, with respect to any Liquidated Receivable,
the monies collected in respect thereof, from whatever source, net of the sum
of any amounts expended by the Servicer in connection with such liquidation
and any amounts required by law to be remitted to the Obligor on such
Liquidated Receivable.
"Monthly Receivables Tape" means a computer disc or tape containing the
information as to each Receivable set forth in Exhibit B to the Purchase
Agreement, as of the end of the related Collection Period.
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"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
["Net Loss" for a Collection Period means the sum of (i) the aggregate
Principal Balances of all Receivables charged-off as uncollectible, in
accordance with the Credit and Collection Policy, minus (ii) the aggregate
Liquidation Proceeds received during such Collection Period.]
"Noteholder" means the record holder of a Note.
"Notes" means the notes issued by the Issuer pursuant to the Indenture.
"Obligor" means any Person which is obligated to make payment on a
Receivable.
"Officer's Certificate" means a certificate signed by the chairman of the
board, any vice president, the controller or any assistant controller, the
president, a treasurer, assistant treasurer, secretary or assistant secretary
of the Seller 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 Servicer, which counsel shall be
acceptable to the Indenture Trustee, the Owner Trustee or the Depositor, as
applicable.
"Owner Trustee" means the Person acting as Owner Trustee under the Trust
Agreement, its successors in interest and any successor owner trustee under
the Trust Agreement.
"Payment Date" means the [ ]th day of each month (or if such [ ]th day is
not a Business Day, the next succeeding Business Day) commencing on [ ].
"Person" means any corporation, natural person, firm, joint venture,
partnership, limited liability company, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Pool Balance" means, at any time, the aggregate Principal Balance of all
Receivables at such time (excluding Removed Receivables and Liquidated
Receivables).
"Principal Balance" of a Receivable, as of the close of business on any
date of determination, means the Amount Financed minus the sum of (i) the
portion of all payments made by or on behalf of the related Obligor on or
prior to such day and allocable to principal using the [Simple Interest
Method] [state other method] and (ii) the principal portion of the Purchase
Amount paid with respect to the Receivable.
"Purchase Agreement" means the Purchase Agreement dated [ ] between [ ]
and Bear ▇▇▇▇▇▇▇ Asset Backed Funding Inc., pursuant to which [ ] sold the
Receivables to [ ].
"Purchase Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full a Receivable under
the terms thereof, including interest to the end of the month of purchase.
"Rating Agencies" means Moody's and Standard & Poor's.
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"Receivable" means the indebtedness and other obligations of an Obligor
arising under a Contract, whether such indebtedness or other obligations
constitute accounts, chattel paper, instruments or general intangibles, in
each case, as such terms are defined in the UCC, and including, without
limitation, the obligation to pay any Finance Charges with respect thereto.
"Receivables Files" means the documents specified in Section 4.6.
"Related Security" means, with respect to any Receivable:
(i) all of the Seller's interest in the Financed Vehicle, the financing
of the purchase of which gave rise to such Receivable, including,
without limitation, all of the Seller's right, title and interest in
and to the proceeds of the Insurance Policies, and all warranties,
indemnities, service obligations and other contract rights issued or
granted by, or otherwise existing under applicable law against, the
manufacturer or Dealer in respect of such Financed Vehicle,
(ii) all other security interests or liens and property subject thereto
from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such
Receivable, or otherwise, together with all financing statements
signed by an Obligor describing any collateral securing such
Receivable, and including, without limitation, all security
interests or liens, and property subject thereto, granted by any
Person (whether or not the primary Obligor on such Receivable) under
or in connection therewith,
(iii)all books, records and other information relating to such
Receivable, including, without limitation, all Contracts,
(iv) all service contracts and other contracts and agreements relating
to such Receivable,
(v) any proceeds from recourse to Dealers with respect to Receivables
with respect to which the Servicer has determined in accordance with
its customary servicing procedures that eventual payment in full is
unlikely,
(vi) any Financed Vehicle that shall have secured a Receivable and shall
have been acquired by or on behalf of the Seller, the Servicer or
the Issuer, and
(vii)all proceeds of any of the foregoing.
"Removed Receivable" means, a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 9.2.
"Required Insurance" means an Insurance Policy with respect to a Financed
Vehicle (i) that has been issued to the Obligor by an insurance company
acceptable to the Servicer, (ii) that provides comprehensive, collision, fire,
theft and other physical damage coverage, (iii) that is in an amount not less
than the market value of the applicable Financed Vehicle, and (iv) that has
the Servicer noted as the loss payee thereon.
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"Schedule of Contracts" means the list of Contracts attached hereto as
Exhibit B, such list being in microfiche, paper or electronic format.
"Seller" means [ ], and its successors and permitted assigns.
"Servicer" means [ ] or any replacement thereof under Article VII.
"Servicer Default" has the meaning assigned to that term in Section 8.1.
"Servicer Fee" means, the product of (a) the Servicing Fee Rate (or, in
the case of the initial Collection Period, the product of (i) a fraction, the
numerator of which is equal to the number of days (based on a 30 day month)
elapsed from the Cut-Off Date through the last day of such initial Collection
Period and the denominator of which is 360 and (ii) 1.00%), and (b) the Pool
Balance as of the first day of the preceding Collection Period.
"Servicer Report" means the report with respect to each Collection Period
(substantially in the form of Exhibit A hereto) to be provided by the Servicer
in accordance with Section 3.4 of this Agreement.
"Servicing Fee Rate" means 1/12 of [1.00]%.
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of (a) the fixed
rate of interest, (b) the unpaid principal balance, and (c) a fraction, the
numerator of which is the number of days elapsed since the preceding payment
of interest was made and the denominator of which is 365, and the remainder of
such payment is allocable to principal.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
"Trust" means the Issuer.
"Trust Agreement" means the Amended and Restated Trust Agreement dated as
of [ ], between Bear ▇▇▇▇▇▇▇ Asset Backed Funding Inc. and the Owner Trustee.
"Trust Officer" means, (i) in the case of the Owner Trustee, any officer
in the Corporate Trust Administration Department of the Owner Trustee with
direct responsibility for the administration of the Trust Agreement on behalf
of the Owner Trustee and (ii) in the case of the Paying Agent, any officer of
the Paying Agent with direct responsibility to perform the duties of the
Paying Agent under this Agreement or any related document.
SECTION 2.2 Other Definitional Provisions.
(a) 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.
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(a) 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.
(b) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Article, Section,
Schedule and Exhibit references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(c) 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.
(d) 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 agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE III
COLLECTIONS
SECTION 3.1 Collections. The Servicer shall, subject to Section 3.3,
remit to the Deposit Account all Collections within two Business Days of
receipt thereof.
SECTION 3.2 Application of Collections. With respect to each
Receivable, payments by or on behalf of the Obligor shall be applied to
interest and principal in accordance with the [Simple Interest Method] [state
other method].
SECTION 3.3 Net Deposits. As an administrative convenience, the
Servicer will be permitted to make the deposit of all Collections and Purchase
Amounts for the Collection Period net of the Servicer Fee and any other
amounts that the Servicer is permitted to retain pursuant to Section 4.13. The
Servicer, however, will account to the Issuer as if all deposits,
distributions and transfers were made individually.
SECTION 3.4 Monthly Receivables Tape and Servicer Report. The Servicer
will provide the Owner Trustee, the Indenture Trustee, each Paying Agent and
the Depositor (a) the Monthly Receivables Tape and (b) the Servicer Report
with respect to the
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related Collection Period no later than 11:00 a.m. (New York City time)
on the [ ] Business Day preceding the Payment Date following such Collection
Period.
ARTICLE IV
SERVICING OF RECEIVABLES
SECTION 4.1 Appointment and Duties of the Servicer. The Issuer hereby
appoints [ ] as the Servicer and [ ] accepts such appointment. The Servicer,
for the benefit of the Issuer (to the extent provided herein), shall manage,
service, administer, make collections and discharge liens on the Receivables
with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to all comparable automotive receivables that
it services for itself and others. The Servicer's duties shall include
collection and posting of all payments, responding to inquiries of Obligors on
such Receivables, investigating delinquencies, sending payment coupons to
Obligors, reporting tax information to Obligors, accounting for collections
and furnishing monthly and annual statements to the Owner Trustee with respect
to distributions. Subject to the provisions of Section 4.2, the Servicer shall
follow its customary standards, policies and procedures in performing its
duties as Servicer. Without limiting the generality of the foregoing, the
Servicer is authorized and empowered to execute and deliver, on behalf of
itself, the Issuer and the Owner Trustee or any of them, any and all
instruments of satisfaction or cancellation, or partial or full release or
discharge, and all other comparable instruments, with respect to such
Receivables or to the Financed Vehicles securing such Receivables. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Issuer
shall thereupon be deemed to have automatically assigned, solely for the
purpose of collection, such Receivables to the Servicer. If in any enforcement
suit or legal proceeding it shall be held that the Servicer may not enforce a
Receivable on the 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. The Owner Trustee shall upon the written
request of the Servicer furnish the Servicer with any powers of attorney and
execute any other documents reasonably necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder. The
Owner Trustee shall have no liability for furnishing any power of attorney
requested by the Servicer or for executing any other document requested by the
Servicer, and shall be entitled to rely on the request of the Servicer without
independent investigation in determining that such accounts are authorized and
permitted hereunder.
SECTION 4.2 Collection and Allocation of Receivable Payments. The
Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable automotive receivables that it services for itself
or others. The Servicer shall allocate collections between principal and
interest in accordance with the customary servicing procedures it follows with
respect to all comparable automotive receivables that it services for itself
or others. [The Servicer may grant extensions, rebates or adjustments on a
Receivable to the same extent that it grants extensions, rebates or
adjustments with respect to all comparable automotive receivables that it
services for itself or others.] [; provided that (i) the aggregate Principal
Balance of Receivables as to which an
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extension have been granted shall not
exceed [ ]% of the then current Pool Balance and (ii) the Servicer shall not
extend any Receivable beyond the earlier of (x) [ ] months after its original
maturity date and (y) the Collection Period in which the Final Scheduled
Maturity Date occurs. If, as a result of inadvertently rescheduling or
extending payments, such rescheduling or extension breaches any of the terms
of the proviso to the preceding sentence, then the Servicer shall be obligated
to purchase such Receivable pursuant to Section 9.2. For the purpose of such
purchases pursuant to Section 9.2, notice shall be deemed to have been
received by the Servicer at such time as shall make purchase mandatory as of
the last day of the Collection Period during which the discovery of such
breach occurred.] The Servicer may in its discretion waive any late payment
charge or any other fees that may be collected in the ordinary course of
servicing a Receivable. The Servicer shall not agree to any alteration of the
interest rate or the originally scheduled payments on any Receivable.
SECTION 4.3 Realization upon Receivables. On behalf of the Issuer,
the Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary
or advisable in its servicing of automotive receivables, which may include
reasonable efforts to realize upon any recourse to Dealers and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine
in its discretion that such repair and/or repossession will increase the
Liquidation Proceeds by an amount greater than the amount of such expenses.
SECTION 4.4 Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Vehicle as
of the execution of the Receivable.
SECTION 4.5 Maintenance of Security Interests in Financed Vehicles.
The Servicer shall, in accordance with its customary servicing procedures,
take such steps as are necessary to maintain perfection of the security
interest created by each Receivable in the related Financed Vehicle. The
Servicer is hereby authorized to take such steps as are necessary to
re-perfect such security interest on behalf of the Issuer in the event of the
relocation of a Financed Vehicle or for any other reason.
SECTION 4.6 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer
hereby irrevocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer as custodian of the
following documents or instruments which are hereby or will hereby be
constructively delivered to the Issuer, as of the Closing Date with respect to
each Receivable (the "Receivable Files"):
(a) the fully executed original of the Contract related to such
Receivable;
(b) the original credit application fully executed by the Obligor;
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(c) the original Certificate of Title or such 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 Financed
Vehicle; and
(d) any and all other documents that the Servicer shall keep on
file, in accordance with its customary procedures, relating to a Receivable,
an Obligor or a Financed Vehicle.
SECTION 4.7 Duties of the Servicer as Custodian.
(a) The Servicer shall hold the Receivable Files as custodian for the
benefit of the Issuer and maintain such accurate and complete accounts,
records and computer systems pertaining to each Receivable File as shall
enable the Issuer to comply with this Agreement. In performing its duties as
custodian the Servicer shall act with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to 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 to verify the accuracy of the Servicer's
record keeping. The Servicer shall promptly report to the Issuer 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 of the Receivable
Files.
(b) The Servicer shall maintain each Receivable File at one of its
offices specified in Schedule A or at such other office as shall be specified
to the Issuer by written notice not later than 90 days after any change in
location. The Servicer shall make available to the Issuer or its respective
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 instruct.
(c) Upon instruction from the Indenture Trustee, the Servicer shall
release any Receivable File to the Indenture Trustee, the Indenture Trustee's
agent or the Indenture Trustee's designee, as the case may be, at such place
or places as the Indenture Trustee may designate, as soon as practicable.
SECTION 4.8 Instructions; Authority To Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of
the Indenture Trustee.
SECTION 4.9 Custodian's Indemnification. The Servicer as custodian shall
indemnify the Issuer, the Owner Trustee, the Indenture Trustee, the Paying
Agent and each of their respective officers, directors, employees and agents
for any and all liabilities, obligations, losses, compensatory damages,
payments, costs or expenses of any kind whatsoever that may be imposed on,
incurred by or asserted against the Issuer, the Owner Trustee, the Indenture
Trustee, the Paying Agent or any of their respective
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officers, directors, employees and 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 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, respectively.
SECTION 4.10 Effective Period and Termination. The Servicer's appointment
as custodian shall become effective as of the Cut-Off Date and shall continue
in full force and effect until terminated pursuant to this Section. If [ ]
shall cease to be Servicer in accordance with the provisions of this
Agreement, the appointment of such Servicer as custodian shall be terminated
by the Owner Trustee. The Owner Trustee may terminate the Servicer's
appointment as custodian, with cause, at any time upon written notification to
the Servicer. As soon as practicable after any termination of such
appointment, the Servicer shall deliver the Receivable Files to the Indenture
Trustee or the Indenture Trustee's agent at such place or places as the
Indenture Trustee may reasonably designate. All reasonable costs and expenses
(including attorneys' fees) incurred in connection with transferring the
Receivable Files to the Indenture Trustee or the Indenture Trustee's designee,
as applicable, and amending this Agreement to reflect such succession as
custodian pursuant to this Section shall be paid by such Servicer upon
presentation of reasonable documentation of such costs and expenses.
SECTION 4.11 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Owner Trustee and the
Indenture Trustee access to the Receivable Files in such cases where the
Certificateholders shall be required by applicable statutes or regulations to
review such documentation. Access shall be afforded without charge, but only
upon reasonable request and during the normal business hours at the offices of
the Servicer. Nothing in this Section shall affect the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of
this Section.
SECTION 4.12 Servicer Fee. If [ ] is acting as the Servicer, then
the Servicer shall retain an amount equal to the Servicer Fee (in full
satisfaction of the payment of such fee to the Servicer) out of amounts
required to be remitted by the Servicer in accordance with Section 3.3. The
Servicer shall also be entitled to receive all late fees, prepayment charges,
and other administrative fees or similar charges allowed by applicable law
with respect to the Receivables, collected (from whatever source) on the
Receivables.
SECTION 4.13 Servicer Expenses. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of independent accountants, legal counsel, taxes
imposed on the Servicer and expenses incurred in connection with distributions
and reports to the Indenture Trustee, the Owner Trustee and Paying Agent.
SECTION 4.14 Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that Depositor shall have consented
thereto; and
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provided, further, that the Servicer shall remain obligated and be liable to
the Issuer, the Indenture Trustee and the Owner Trustee for the servicing and
administering of the Receivables in accordance with the provisions hereof
without diminution of such obligation and liability by virtue of the
appointment of such subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Receivables. The fees and expenses of the subservicer shall be as agreed
between the Servicer and its subservicer from time to time, and none of the
Issuer, the Indenture Trustee, or the Owner Trustee, shall have any
responsibility therefor.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of [ ]. [ ], as Seller
and Servicer, makes the following representations on which the Issuer is
deemed to have relied in acquiring the Receivables. The representations speak
as of the Closing Date, and shall survive the sale of the Receivables to the
Issuer.
(a) [ ] is duly organized and validly existing as a [ ] in good
standing under the laws of the State of [ ], with the corporate power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal right to acquire and
own the Receivables.
(b) [ ] is duly qualified to do business as a foreign corporation in
good standing, and has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the conduct of
its business shall require such qualifications.
(c) [ ] has the corporate power and authority to execute and deliver
this Agreement and to carry out its terms; and the execution, delivery and
performance of this Agreement has been duly authorized by [ ] by all necessary
corporate action.
(d) This Agreement constitutes a legal, valid and binding obligation
of the Servicer enforceable in accordance with its terms.
(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles of organization
or operating agreement of [ ], or any indenture, agreement or other instrument
to which [ ] is a party or by which it is bound; or result in the creation or
imposition of any Adverse Claim upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument (other than
pursuant to this Agreement); or violate any law or, to the best of [ ]'s
knowledge, any order, rule or regulation applicable to [ ] of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over [ ] or its properties.
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(f) To [ ]'s best knowledge, there are no proceedings or
investigations pending or threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over [ ] or its properties: (i) asserting the invalidity of this
Agreement or any related documents or (ii) that may materially and adversely
affect the performance by [ ] of its obligations under, or the validity or
enforceability of, this Agreement, or any related documents.
(g) The information in each Servicer Report to be prepared under
Section 3.4 and all information (including the Schedule of Contracts and the
computer tape or other information regarding the Receivables made available to
the Depositor) furnished or to be furnished at any time by [ ] in connection
with this Agreement is or will be accurate in all material respects as of its
date, and no such document will contain any untrue statement of a material
fact or will omit to state a material fact which is necessary to make the
facts stated therein not misleading.
(h) The Receivable Files are kept at one or more of the locations
listed in Schedule A.
(i) As of the related Cut-off Date, no Obligor on a Receivable is
shown on the Receivable Files as the subject of a bankruptcy proceeding.
(j) [ ] is not aware of any judgment or tax lien filings against it.
(k) [ ] as custodian for the Issuer has in its possession all
original copies of the contracts that constitute or evidence the Receivables.
ARTICLE VI
COVENANTS
SECTION 6.1 Affirmative Covenants of the Servicer. Until all amounts
due to the Issuer hereunder have been paid to the Issuer, [ ], in its capacity
as Servicer, will:
(a) maintain its existence in the jurisdiction of its organization,
and qualify and remain qualified in good standing as a foreign limited
liability company in each jurisdiction where the failure to be so qualified
could materially adversely affect its ability to perform its obligations
hereunder;
(b) maintain and implement administrative and operating procedures,
and keep and maintain all records and other information, reasonably necessary
or advisable for the collection of the Receivables (including, without
limitation, records adequate to permit the daily identification of Receivables
and all Collections and adjustments to Receivables);
(c) at its expense timely and fully perform and comply with all
material provisions and covenants required to be observed by [ ] under the
Contracts related to the Receivables; and
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(d) comply in all material respects with the Credit and Collection
Policy and with all applicable laws with regard to each Receivable and any
Contract related to such Receivable.
SECTION 6.2 Reporting Requirements of the Servicer. Until all
amounts due to the Issuer hereunder have been paid to the Issuer, the Servicer
will furnish to the Owner Trustee, the Indenture Trustee and the Depositor:
(a) the Servicer Report as required under Section 3.4;
(b) as soon as possible, and in any event within [five Business
Days], shall describe such event or condition and, if applicable, the steps
being taken with respect thereto by the Person(s) affected thereby of: (i) the
occurrence of any Servicer Default or event which with the passage of time or
the giving of notice or both would constitute a Servicer Default or (ii) the
institution of any litigation, arbitration proceeding or governmental
proceeding which could be reasonably likely to have a material adverse effect
on the performance by the Servicer of its obligations under this Agreement or
any related documents or the collectibility of the Receivables; and
(c) such other information, documents, records or reports respecting
the Receivables or the condition or operations, financial or otherwise, of the
Servicer as the [Depositor] may from time to time reasonably request.
SECTION 6.3 Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Depositor, on or before April 30 of each year beginning [ ],
an Officer's Certificate, dated as of December 31 of the preceding year,
stating that (i) a review of the activities of the Servicer during the
preceding 12-month period (or such longer period as shall have elapsed since
the Closing Date) and of its performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement throughout such year or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Depositor, promptly after having obtained knowledge thereof,
but in no event later than five (5) Business Days thereafter, written notice
in an Officer's Certificate of any event which with the giving of notice or
lapse of time, or both, would become a Servicer Default hereunder.
SECTION 6.4 Annual Independent Certified Public Accountants' Report.
The Servicer shall cause a firm of independent certified public accountants,
which may also render other services to the Servicer, the Seller or their
Affiliates, to deliver to the Owner Trustee, the Indenture Trustee and the
Depositor, on or before April 30 of each year beginning [ ], with respect to
the prior calendar year (or such shorter period in the case of the first such
report) a report addressed to the Servicer, to the effect that such firm has
examined [the financial statements of [ ] and issued its report thereon and
that such examination (a)
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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; (b) included tests relating to
automotive loans serviced for others in accordance with the requirements of
the Uniform Single Attestation Program for Mortgage Bankers (the "Program"),
to the extent the procedures in such Program are applicable to the servicing
obligations set forth in this Agreement; and (c) except as described in the
report, disclosed no exceptions or errors in the records relating to
automobile and light-duty truck loans serviced for others that, in the firm's
opinion, paragraph four of such Program requires such firm to report.] [the
automobile and light-duty truck receivable servicing functions of the Servicer
for such period, including the Servicer's procedures and records relating to
servicing of the Receivables under this Agreement and that, on the basis of
such examination, such firm is of the opinion that such servicing has been
conducted during such period in compliance with this Agreement except for (a)
such exceptions as such firm believes to be immaterial and (b) such other
exceptions as shall be set forth in such firm's report. In addition, such
report shall state that [such firm has compared the mathematical calculations
of each amount set forth in the [Servicer's Report/describe any remittance
report] forwarded by the Servicer during the period covered by such report
(which shall be the preceding calendar year or such shorter period in the case
of the first such report) with the Servicer's computer reports which were the
source of such amounts and that on the basis of such comparison, such firm is
of the opinion that such amounts are in agreement, except for such exceptions
as such firm believes to be immaterial and such other exceptions as shall be
set forth in such statement. [In addition, such report shall set forth the
procedures performed in conjunction with the examination and shall contain an
opinion of such firm as to the accuracy of the amounts set forth in the
[Servicer's Report/describe any remittance report] delivered in such period.]]
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 6.5 Negative Covenants of the Servicer. Until all amounts
due to the Issuer hereunder have been paid to the Issuer, Servicer will not:
(a) except as provided herein, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to any Receivables, the Related Security or any
Collections or assign any right to receive income in respect thereof;
(b) amend or otherwise modify the terms of any Receivable, or amend,
modify or waive any term or condition of any Contract related thereto, in each
case, in any manner which is inconsistent with the Credit and Collection
Policy; or
(c) release the Financed Vehicle securing any Receivable from the
security interest granted by such Receivable in whole or in part except in the
event of payment in full by the Obligor thereunder or repossession, impair the
rights of the Issuer in such Receivable, or increase the number of scheduled
payments due under a Receivable.
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SECTION 6.6 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002. To the extent permitted by
applicable law and the rules of the Securities and Exchange Commission as
interpreted by the staff of the Securities and Exchange Commission, the
Servicer shall furnish to the [Depositor] [Indenture Trustee] in a timely
manner for filing under the Securities Exchange Act of 1934, as amended, the
certification required by Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 in
respect of any securitization of the Receivables; provided that such
certification shall only relate to the Servicing Report. Whether or not such
certification may be given by the Servicer, the Servicer hereby indemnifies
and holds harmless the [Depositor] and [Indenture Trustee] against any loss,
liability and damages incurred by the [Depositor] [Indenture Trustee] in
respect of any certification furnished by it pursuant to such Section 302 of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 to the extent such loss, liability and damages
arises out of or is based on such certification relating to information
contained in or omitted from any Servicer Report.
ARTICLE VII
THE SERVICER
SECTION 7.1 Liability of the Servicer; Indemnities. The Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the
Noteholders and the Certificateholders and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee, the Indenture Trustee
and the Depositor from and against any loss, liability or expense incurred by
reason of (i) any breach of any representation, warranty or covenant by the
Servicer, as applicable, and (ii) the Servicer's willful misfeasance, bad
faith or negligence in the performance of its duties under this Agreement, or
by reason of reckless disregard of its obligations and duties under this
Agreement.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee and the Depositor and any of
the officers, directors, employees and agents of the Issuer, the Owner
Trustee, the Indenture Trustee and the Depositor from and against any taxes
that may at any time be asserted against any such Person with respect to the
transactions contemplated herein, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but, in
the case of the Issuer, not including any taxes asserted with respect to, and
as of the date of, the sale of the Receivables to the Issuer or the issuance
and original sale of the Certificates or the Notes, or asserted with respect
to ownership of the Receivables, or federal or other income taxes arising out
of distributions on the Certificates or the Notes) and costs and expenses in
defending against the same.
(c) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee, the Indenture Trustee and the Depositor and their respective
officers, directors, employees and agents from and against all costs,
expenses, losses, claims,
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damages and liabilities arising out of or incurred in connection
with the acceptance or performance of the trusts and duties herein and in the
Trust Agreement contained, in the case of the Owner Trustee, except to the
extent that such cost, expense, loss, claim, damage or liability: (i) in the
case of the Owner Trustee, the Indenture Trustee and the Depositor shall be
due to the willful misfeasance, bad faith or negligence (except for errors in
judgment) of the Owner Trustee, the Indenture Trustee and the Depositor,
respectively, or (ii) in the case of the Owner Trustee, shall arise from the
breach by the Owner Trustee of any of its representations or warranties set
forth in Section 7.03 of the Trust Agreement.
(d) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Certificateholders, the Indenture Trustee and
the Depositor, the Noteholders and the Paying Agent and any of their
respective officers, directors, employees and agents 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.
For purposes of this Section, in the event of the termination of the
rights and obligations of [ ] (or any successor thereto pursuant to Section
7.2) as Servicer pursuant to Section 8.1, such Servicer shall be deemed to be
the Servicer pending appointment of a successor Servicer pursuant to Section
8.2.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee and the termination of this Agreement 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 shall
collect any of such amounts from others, such Person shall promptly repay such
amounts to the Servicer without interest.
SECTION 7.2 Merger or Consolidation of, or Assumption of Obligations
of, Seller or Servicer. Any Person (a) into which the Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to
which the Servicer shall be a party, (c) which may succeed to the properties
and assets of the Servicer substantially as a whole, or (d) with respect to
the Servicer's obligations hereunder, which is a legal entity 50% or more of
the voting power of which is owned, directly or indirectly, by [ ] or an
affiliate of or successor to [ ] or an affiliate of such successor, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Servicer under this Agreement, shall be the
successor to the Servicer hereunder without the execution or filing of any
document or any further act by any of the parties to this Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 5.1 shall have been
breached and no Servicer Default, and no event that, after notice or lapse of
time, or both, would become a Servicer Default shall have occurred and be
continuing, (ii) the Servicer shall have delivered to the Owner Trustee and
the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, and (iii) the Servicer shall have delivered
17
to the Owner Trustee and the Indenture Trustee an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of the Issuer in
the Receivables and reciting the details of such filings, or (B) stating that,
in the opinion of such counsel, no such action shall be necessary to preserve
and protect such interests. Notwithstanding anything herein to the contrary,
the execution of the foregoing agreement of assumption and compliance with
clauses (i), (ii) and (iii) above shall be conditions to the consummation of
the transactions referred to in clauses (a) , (b) or (c) above.
SECTION 7.3 Limitation on Liability of Servicer and Others. The
Servicer and any manager, officer, employee or agent of the Servicer may rely
in good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.
Neither the Servicer nor any of the managers, officers, employees or
agents of the Servicer shall be under any liability to the Issuer or the
Certificateholders or the Noteholders, except as provided under this
Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; provided,
however, that this provision shall not protect the Servicer or any such Person
against any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of duties or by reason
of reckless disregard of obligations and duties under this Agreement.
SECTION 7.4 [ ] Not To Resign as Servicer. Subject to the provisions
of Section 7.2 and the following paragraph, [ ] shall not resign from the
obligations and duties hereby imposed on it as Servicer under this Agreement
except upon a determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law and cannot be
cured. Notice of any such determination permitting the resignation of [ ]
shall be communicated to the Owner Trustee and the Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Owner Trustee and the Indenture Trustee concurrently with or
promptly after such notice. No such resignation shall become effective until a
successor Servicer shall have assumed the responsibilities and obligations of
[ ] in accordance with Section 8.2.
Notwithstanding the foregoing, if [ ] shall fail to own, directly or
indirectly, at least 51% of the membership interest in [ ], then at the
written request of the Depositor and without compensation to the Servicer, the
Servicer shall resign from its obligations and duties hereunder and shall
transfer its servicing responsibilities in a commercially reasonable manner to
the successor servicer designated by [the Depositor].
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ARTICLE VIII
DEFAULT
SECTION 8.1 Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deposit in the Deposit Account
any required payment, which failure continues unremedied for a period of five
Business Days; or
(b) failure by the Servicer duly to observe or to perform in any
material respect any other covenants or agreements of the Servicer set forth
in this Agreement, which failure shall (i) materially and adversely affect the
rights of Issuer and (ii) continue unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given (A) to the Servicer by the Owner Trustee or
the Indenture Trustee or (B) to the Servicer and to the Owner Trustee and the
Indenture Trustee by (i) if any Notes are outstanding, holders of at least 25%
of the outstanding principal amount of the Notes and (ii) if the Notes have
been paid in full, the Holders of Class D Certificates evidencing at least 25%
of the Certificate Balance; or
(c) the occurrence of an Insolvency Event with respect to the
Servicer; or
[(d) the Cumulative Net Loss Ratio exceeds [ ]%,]
(e) [Insert any additional events of Servicer Default].
then, and in each and every case, so long as the Servicer Default
shall not have been remedied, either (i) if any Notes are outstanding, the
Indenture Trustee at the direction of holders of at least 25% of the
outstanding principal amount of the Notes or (ii) if the Notes have been paid
in full, the Owner Trustee at the direction of Holders of Class D Certificates
evidencing at least 25% of the Certificate Balance, (iii) if the Class D
Certificates have been paid in full, the Owner Trustee at the direction of
holders of Class E Certificates evidencing Percentage Interests aggregating at
least 51% or in each case, by notice then given in writing to the
Servicer and the Depositor may terminate all the rights and obligations (other
than the obligations set forth in Section 7.1 hereof) of the Servicer under
this Agreement. On or after the receipt by the Servicer of such written
notice, all authority and power of the Servicer under this Agreement, whether
with respect to the Notes, the Certificates or the Receivables or otherwise,
shall, without further action, pass to and be vested in such successor
Servicer as may be appointed by the Indenture Trustee (if it gave the
termination notice) or the Owner Trustee (if it gave the termination notice);
and, without limitation, the Indenture Trustee or the Owner Trustee, as
applicable, is hereby authorized and empowered to execute and deliver, for the
benefit of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivables and related documents, or otherwise. The predecessor Servicer
shall cooperate with the successor Servicer and the Indenture Trustee and the
Owner Trustee in effecting the termination of the responsibilities and rights
of the predecessor Servicer under this Agreement,
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including the transfer to the successor Servicer for administration by it of
all cash amounts that shall at the time be held by the predecessor Servicer
for deposit, or shall thereafter be received by it with respect to any
Receivable. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the Receivable Files to the successor
Servicer and amending this Agreement to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses.
SECTION 8.2 Appointment of Successor.
(a) Upon the Servicer's receipt of notice of termination pursuant to
Section 8.1 or the Servicer's resignation in accordance with the terms of this
Agreement, the predecessor Servicer shall continue to perform its functions as
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of (i) the date 60 days from the delivery to the
Indenture Trustee and the Owner Trustee of written notice of such resignation
(or written confirmation of such notice) in accordance with the terms of this
Agreement and (ii) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of the Servicer's termination
hereunder, (i) if any Notes are outstanding, the Indenture Trustee shall be
the successor Servicer and (ii) if the Notes have been paid in full, the
Master Servicer shall be, and the successor Servicer shall accept its
appointment by a written assumption in form acceptable to the Indenture
Trustee or the Owner Trustee, as applicable.
(b) 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.
ARTICLE IX
BREACH OF WARRANTY AND REPURCHASES
SECTION 9.1 Breach of Warranty and Repurchases. The Servicer shall
inform the other parties to this Agreement promptly, in writing, upon the
discovery of any breach of [ ]'s representations and warranties made by the
Servicer as the seller of the Receivables pursuant to Section [ ] of the
Purchase Agreement. Unless any such breach shall have been cured by the last
day of the second Collection Period following the discovery thereof by the
Indenture Trustee or the Owner Trustee or receipt by the Owner Trustee or the
Indenture Trustee of written notice from the Servicer of such breach, [ ]
shall be obligated to repurchase any Receivable materially and adversely
affected by any such breach as of such last day (or, at the Servicer's option,
the last day of the first Collection Period following the discovery). In
consideration of the repurchase of any such Receivable,
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[ ] shall remit the Purchase Amount to the Deposit Account. Subject to the
provisions of Section 7.1, the sole remedy of the Issuer with respect to a
breach of representations and warranties pursuant to Section 5.1 and the
agreement contained in Section [ ] of the Purchase Agreement shall be to
require the Servicer to repurchase Receivables pursuant to this Section,
subject to the conditions contained herein.
SECTION 9.2 Purchase by Servicer of Receivables upon Breach. The
Servicer or the Owner Trustee shall inform the other party promptly, in
writing, upon the discovery of any breach pursuant to Section 4.2, 4.5 or 6.5.
Unless the breach shall have been cured by the last day of the second
Collection Period following such discovery (or, at the Servicer's election,
the last day of the first following Collection Period), the Servicer shall
purchase any Receivable materially and adversely affected by such breach as of
such last day. If the Servicer takes any action during any Collection Period
pursuant to Section 4.2 that impairs the rights of the Issuer, the Noteholders
or the Certificateholders in any Receivable or as otherwise provided in
Section 4.2, the Servicer shall purchase such Receivable as of the last day of
such Collection Period. In consideration of the purchase of any such
Receivable pursuant to either of the two preceding sentences, the Servicer
shall remit the Purchase Amount to the Deposit Account. The sole remedy of the
Issuer, the Indenture Trustee and the Owner Trustee with respect to a breach
pursuant to Section 4.2, 4.5 or 6.5 shall be to require the Servicer to
purchase Receivables pursuant to this Section. The Owner Trustee and the
Indenture Trustee shall not have duty to conduct any affirmative investigation
as to the occurrence of any condition requiring the repurchase of any
Receivable pursuant to this Section.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments. This Agreement may be amended by the
Servicer, the Issuer and the Depositor 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
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 Certificateholder or Noteholder.
This Agreement may also be amended from time to time by the Servicer and
the Issuer, with the consent of the Holders of outstanding Class D
Certificates evidencing not less than a majority of the Certificate Balance
and Holders of at least 51% of the outstanding principal amount of the Notes,
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 Certificateholders or the Noteholders; provided,
however, that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made for the benefit
of the Certificateholders or the Noteholders or (b) reduce the aforesaid
percentage of the Certificate Balance or the aforesaid percentage of that
outstanding principal
21
amount of the Notes, the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all the outstanding
Certificates and Notes.
Promptly after the execution of any such amendment or consent pursuant
to either of the two preceding paragraphs, the Owner Trustee shall furnish
written notification of the substance of such amendment or consent to each
Certificateholder and Noteholder.
It shall not be necessary for the consent of Certificateholders and
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Depositor 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 10.2(i)(i). The Owner Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Owner Trustee's own rights,
duties or immunities under this Agreement or otherwise.
SECTION 10.2 Protection of Title to Issuer.
(a) The Servicer, as the initial seller of the Receivables, shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer in the Receivables and in the proceeds thereof to the extent such
interest arises from the Servicer as such seller of the Receivables. The
Servicer shall deliver (or cause to be delivered) to the Owner Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) The Servicer shall not change its name, identity or corporate
structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a)
above seriously misleading within the meaning of ss. 9-402(7) of the UCC,
unless it shall have given the Owner Trustee and the Indenture Trustee at
least five days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) The Servicer shall have an obligation to give the Owner Trustee
and the Indenture Trustee at least 60 days' prior written notice of any change
in the jurisdiction in which it is organized if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of
any amendment of any previously filed financing or continuation statement or
of any new financing statement and shall promptly file any such amendment or
new financing statement. The Servicer shall at all times maintain each office
from which it shall service Receivables, and its principal executive office,
within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such 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
22
Receivable and the amounts from time to time deposited in the Deposit Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under the Purchase Agreement of the Receivables,
the Servicer's master computer records (including any backup archives) that
refer to a Receivable shall indicate clearly the interest of the Issuer in
such Receivable and that such Receivable is owned by the Issuer. Indication of
the Issuer's interest in a Receivable shall be deleted from or modified on the
Servicer's computer systems when, and only when, the Receivable shall have
been paid in full or repurchased.
(f) If at any time the Servicer shall propose to sell, grant a
security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or 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.
(g) The Servicer shall permit the Indenture Trustee, the Owner
Trustee and their respective agents at any time during normal business hours
to inspect, audit and make copies of and abstracts from the Servicer's records
regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Indenture
Trustee or the Owner Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Contracts and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee:
(i) promptly after the execution and delivery of this Agreement
and of 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
fully to perfect the interest of the Issuer 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 perfect such interest; and
(i) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cut-Off 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 fully to perfect the interest of
the Owner Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) no such action shall be necessary to perfect such
interest.
23
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 10.3 Notices. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
photocopy, facsimile, electronic mail or other digital communication) and
sent, as to each party hereto, at its address set forth under its name on the
signature pages hereto, or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices
and communications shall be effective when sent.
SECTION 10.4 No Waiver; Remedies. No failure on the part of the
Issuer to exercise, and no delay in exercising, any right hereunder or under
this Agreement or any related document shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 10.5 Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the Servicer, the Issuer, and the
Depositor and their respective successors and assigns, except that the
Servicer shall not have the right to assign any interest herein without the
prior written consent of the Issuer. This Agreement shall create and
constitute the continuing obligation of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such time as all
amounts due to the Issuer hereunder have been paid to the Issuer; provided,
however, that the rights and remedies of the Issuer and the Owner Trustee
under Section 7.1 shall survive any termination of this Agreement.
SECTION 10.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS THAT WOULD APPLY THE LAW OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 10.7 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 10.8 Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the Servicer shall not, prior to the date which
is one year and one day after the termination of this Agreement with respect
to the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any federal or state
bankruptcy, insolvency or similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian,
24
sequestrator or other similar official of the Issuer or any substantial part
of its property, or ordering the winding up or liquidation of the affairs of
the Issuer.
SECTION 10.9 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same agreement.
SECTION 10.10 Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary, this Agreement has
been countersigned by [ ] not in its individual capacity but solely in its
capacity as Owner Trustee of the Issuer and in no event shall [ ] in its
individual capacity or, except as expressly provided in the Trust Agreement,
as beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant
hereto, as to all of which recourse shall be had solely to the assets of the
Issuer. For all purposes of this Agreement, in the performance of its duties
or obligations hereunder or in the performance of any duties or 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.
SECTION 10.11 Beneficiary. Each of the Indenture Trustee and the
Owner Trustee is a third-party beneficiary to this Agreement and is entitled
to the rights and benefits hereunder and may enforce the provisions hereof as
if it were a party hereto.
SECTION 10.12 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.
25
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized officers as of the date set forth on the cover page
of this Agreement.
WHOLE AUTO LOAN TRUST
[ ]
By:[ ],
not in its individual capacity but
solely
as Owner Trustee on behalf of the Trust
By:
-----------------------------------
Name:
Title:
BEAR ▇▇▇▇▇▇▇ ASSET BACKED FUNDING INC.
By:
-----------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
26
EXHIBIT A
SAMPLE SERVICER REPORT
Whole Auto Loan Trust [ ]
-------------------------------------------------------------
Collateral Pool Number of
Balance Date Accounts $ Amount
--------------- --------- --------
Pool Balance -
Beginning of Period
Collections of Installment
Principal
Collections
Attributable to
Full Payoffs
Principal Amount
of Repurchases
Principal Amount
of Gross Losses
--------------------
Pool Balance - End
of Period
====================
Pool Statistics End of Period
--------------- --------------------
Initial Pool Balance (Pool
Balance at the Purchase Date)
Pool Factor (Pool Balance as a
Percent of Initial Pool Balance)
Weighted Average APR
Weighted Average Remaining Term
(months)
Weighted Average Seasoning
(months)
Delinquency Data $ Amount % of Outstanding
---------------- -------- ----------------
Over 30 days
Over 60 days
Over 90 days
Repossessions
-------- --------------------
======== ====================
Delinquency Ratio (3 mo.
Weighted Avg.)
Loss Data $ Amount % of Initial Pool Balance
--------- -------- -------------------------
Current Month
Gross Losses
Recoveries
-------- --------------------
Net Loss
======== ====================
Cumulative Loss Data
Gross Losses
A-1
From and To and Including
Including
--------- ----------------
Collections Period
Payment Date
Statement Number
Servicing Days in
Period
Cash Sources
------------
Collections of Installment
Principal
Collections Attributable to
Full Payoffs
Principal Amount of
Repurchases
Recoveries on Loss Accounts
-----------
Subtotal Principal
Collections of Interest
Investment Earnings Per
Trustee
-----------
Subtotal Interest
-----------
Total Cash Sources
===========
Cash Uses
---------
Servicer Fee Distribution
[Administrative Payments Amounts
to OT *]
-----------------
Principal available for
distribution
Interest available for
distribution
----------------------------
Total Cash Uses $ $
===========-----------------
[We need to deal with payment of trustee fees]
[Administrative Payments
------------------------
Total Principal and Interest
Sources
Investment Earnings Per
Trustee *
Daily Collections Remitted
Servicer Fee (withheld)
Owner Trustee Annual Fees
(withheld per OT) *
Owner Trustee Transaction
Fees (withheld per OT) *
Owner Trustee Reimb.
Expenses (withheld per OT) *
-----------
Payment Due to/(from) ]
Trust Account
===========
* as reported by Owner Trustee
A-2
EXHIBIT B
SCHEDULE OF CONTRACTS
Information as to the Receivables as of [ ]. This information may be provided
in the form of a computer tape or disk.
Identification No. Interest Rate Principal Balance Maturity Date
------------------ ------------- ----------------- -------------
[other information]
B-1
EXHIBIT C
LEGAL OPINION OF COUNSEL TO [ ]
C-1
SCHEDULE A
Location of Receivable Files
SA-1
