EXHIBIT 4.3
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EXECUTION COPY
SALE AND SERVICING AGREEMENT
between
DAIMLERCHRYSLER AUTO TRUST 2002-A
Issuer,
and
DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC,
Seller and Servicer
Dated as of April 1, 2002
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TABLE OF CONTENTS
PAGE
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ARTICLE I
Definitions
SECTION 1.01. Definitions............................................................................1
SECTION 1.02. Other Definitional Provisions.........................................................13
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables.............................................................14
SECTION 2.02. Conveyance of Fixed Value Payments and Fixed Value
Finance Charges.......................................................................15
SECTION 2.03. Fixed Value Securities................................................................15
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of Seller with Respect to the
Receivables...........................................................................16
SECTION 3.02. Repurchase upon Breach................................................................20
SECTION 3.03. Custody of Receivable Files...........................................................20
SECTION 3.04. Duties of Servicer as Custodian.......................................................20
SECTION 3.05. Instructions; Authority To Act........................................................21
SECTION 3.06. Custodian's Indemnification...........................................................21
SECTION 3.07. Effective Period and Termination......................................................21
SECTION 3.08 Representations and Warranties as to the Security Interest of
the Issuer in the Receivables.........................................................21
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer....................................................................22
SECTION 4.02. Collection and Allocation of Receivable Payments......................................22
SECTION 4.03. Realization upon Receivables..........................................................23
SECTION 4.04. Physical Damage Insurance.............................................................23
SECTION 4.05. Maintenance of Security Interests in Financed Vehicles................................23
SECTION 4.06. Covenants of Servicer.................................................................23
SECTION 4.07. Purchase of Receivables upon Breach...................................................23
SECTION 4.08. Servicing Fee.........................................................................24
SECTION 4.09. Servicer's Certificate................................................................24
SECTION 4.10. Annual Statement as to Compliance; Notice of Default..................................24
SECTION 4.11. Annual Independent Certified Public Accountants' Report...............................25
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables.................................................................25
SECTION 4.13. Servicer Expenses.....................................................................25
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SECTION 4.14. Appointment of Subservicer............................................................25
ARTICLE V
Distributions; Reserve Account; Statements to Certificateholders and Noteholders
SECTION 5.01. Establishment of Deposit Account......................................................26
SECTION 5.02. Collections...........................................................................27
SECTION 5.03. Application of Collections............................................................28
SECTION 5.04. Additional Deposits...................................................................28
SECTION 5.05. Distributions.........................................................................29
SECTION 5.06. Reserve Account.......................................................................30
SECTION 5.07. Statements to Noteholders and Certificateholders......................................31
SECTION 5.08. Net Deposits..........................................................................31
ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller.............................................................32
SECTION 6.02. Preservation of Existence.............................................................33
SECTION 6.03. Liability of Seller; Indemnities......................................................33
SECTION 6.04. Merger or Consolidation of, or Assumption of Obligations
of, Seller............................................................................34
SECTION 6.05. Limitation on Liability of Seller and Others..........................................35
SECTION 6.06. Seller May Own Notes..................................................................35
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer...........................................................35
SECTION 7.02. Indemnities of Servicer...............................................................36
SECTION 7.03. Merger or Consolidation of, or Assumption of Obligations
of, Servicer..........................................................................37
SECTION 7.04. Limitation on Liability of Servicer and Others........................................38
SECTION 7.05. DCS Not To Resign as Servicer.........................................................38
ARTICLE VIII
Default
SECTION 8.01. Servicer Default......................................................................38
SECTION 8.02. Appointment of Successor..............................................................39
SECTION 8.03. Notification to Noteholders and Certificateholders....................................40
SECTION 8.04. Waiver of Past Defaults...............................................................40
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables..................................................41
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ARTICLE X
Miscellaneous
SECTION 10.01. Amendment.............................................................................41
SECTION 10.02. Protection of Title to Trust..........................................................42
SECTION 10.03. Notices...............................................................................44
SECTION 10.04. Assignment by the Seller or the Servicer..............................................44
SECTION 10.05. Limitations on Rights of Others.......................................................45
SECTION 10.06. Severability..........................................................................45
SECTION 10.07. Separate Counterparts.................................................................45
SECTION 10.08. Headings..............................................................................45
SECTION 10.09. Governing Law.........................................................................45
SECTION 10.10. Assignment by Issuer..................................................................45
SECTION 10.11. Nonpetition Covenants.................................................................45
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture Trustee........................46
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
SCHEDULE C Schedule of YSOA
EXHIBIT A Form of Distribution Statement to Noteholders........................................A-1
EXHIBIT B Form of Servicer's Certificate.......................................................B-1
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SALE AND SERVICING AGREEMENT dated as of April 1, 2002, between
DAIMLERCHRYSLER AUTO TRUST 2002-A, a Delaware business trust (the
"Issuer"), and DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC, a Michigan
limited liability company, as seller and servicer.
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with automobile retail installment sale contracts
generated by DaimlerChrysler Services North America LLC in the ordinary course
of business; and
WHEREAS DaimlerChrysler Services North America LLC is willing to sell
such receivables to, and to service such receivables on behalf of, the Issuer;
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:
"Amortizing Payment" means, with respect to each Fixed Value Receivable
and each Collection Period prior to the date on which the Fixed Value Payment
relating to such Receivable is due, the amount specified in the applicable
Contract in the payment schedule as the "Amount of Each Payment", except that in
the case of a prepayment, liquidation or repurchase by the Seller or purchase by
the Servicer, the Amortizing Payment shall be equal to the aggregate "Amount of
Each Payment" that has not yet been paid for the period through and including
the last payment prior to the date when the Fixed Value Payment is due less the
amount of the unearned finance charges under the related Contract allocable to
such amount in accordance with the Servicer's customary procedures.
"Amortizing Payment Finance Charge" means, with respect to each payment
collected on a Fixed Value Receivable, the finance charge included in such
payment (as determined in accordance with the Servicer's customary procedures)
that is allocable to the related Principal Balance.
"Amount Financed" means (i) with respect to a Standard Receivable, the
amount advanced under such Standard Receivable toward the purchase price of the
Financed Vehicle and any related costs and (ii) with respect to a Fixed Value
Receivable, an amount equal to the present value of the fixed level payment
monthly installments (not including the amount designated as the Fixed Value
Payment) under such Fixed Value Receivable, assuming that each payment is made
on the due date in the month in which such payment is due, discounted at the APR
for such Fixed Value Receivable.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of finance charges stated in the related Contract.
"Basic Documents" means the Indenture, the Trust Agreement, the
Administration Agreement and the Purchase Agreement.
"Cash Release Amount" means on each Payment Date on and after the First
Release Payment Date, the greater of:
(i) the lesser of (a) D - [S - (P x 96%)] or (b) D minus the
outstanding principal balance of the Class A-1 Notes immediately prior
to such Payment Date
or
(ii) $0.00
where
D = the sum of (a) principal collections and principal payments
contained in the Total Distribution Amount for such Payment
Date and (b) the excess, if any, of (x) the interest
collections, interest payments and investment earnings
contained in such Total Distribution Amount over (y) the sum
of (A) the Servicing Fee for such Payment Date and any unpaid
Servicing Fees for prior Payment Dates, (B) accrued and unpaid
interest on the Notes and (C) the amount, if any, required to
be deposited into the Reserve Account pursuant to Section
5.05(a)(ii)(B);
S = the sum of the aggregate Outstanding Amount of the Notes and
the Certificate Balance before giving effect to payments made
on the Notes and Certificates on such Payment Date.
P = the Related Pool Balance minus the YSOA for such Payment Date.
"Certificate Balance" has the meaning assigned to such term in the
Trust Agreement
"Certificateholders" has the meaning assigned to such term in the Trust
Agreement.
"Certificates" has the meaning assigned to such term in the Trust
Agreement.
"Class" means any one of the classes of Notes.
"Class A-1 Final Scheduled Payment Date" means the May 2003 Payment
Date.
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
is registered in the Note Register.
"Class A-2 Final Scheduled Payment Date" means the December 2004
Payment Date.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note
is registered in the Note Register.
"Class A-3 Final Scheduled Payment Date" means the April 2006 Payment
Date.
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"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note
is registered in the Note Register.
"Class A-4 Final Scheduled Payment Date" means the October 2008 Payment
Date.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note
is registered in the Note Register.
"Collection Period" means a calendar month (or in the case of the first
Collection Period, the period from and including April 10, 2002 to and including
May 31, 2002). The "related Collection Period" for a Payment Date is the
Collection Period ending immediately prior to such Payment Date. Unless
otherwise specified, any amount stated as of the last day of a Collection Period
or as of the first day of a Collection Period shall give effect to the following
calculations as determined as of the close of business on such last day: (1) all
applications of collections, and (2) all distributions to be made on the related
Payment Date.
"Company" means DaimlerChrysler Retail Receivables LLC, a Michigan
limited liability company, and any successor in interest or, if the Rights (as
defined in the Purchase Agreement) have been assigned to a Person that becomes a
transferee in accordance with Section 5.05 of the Purchase Agreement, such
transferee Person and any successor in interest.
"Contract" means a motor vehicle retail installment sale contract.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at 1 Bank One Plaza, Mailcode IL1-0481, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Services Division; or at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders
and the Seller, or the principal corporate trust office of any successor
Indenture Trustee (of which address such successor Indenture Trustee will notify
the Noteholders and the Seller).
"Cutoff Date" means April 10, 2002.
"DCS" means DaimlerChrysler Services North America LLC, a Michigan
limited liability company, or its successors.
"Dealer" means the dealer who sold a Financed Vehicle and who
originated and assigned the related Receivable to DCS under an existing
agreement between such dealer and DCS.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of
the UCC and are susceptible of physical delivery, transfer thereof to
the Indenture Trustee or its nominee or custodian by physical delivery
to the Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102 of the UCC) transfer
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thereof (i) by delivery of such certificated security endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank to a securities intermediary (as defined
in Section 8-102 of the UCC) and the making by such securities
intermediary of entries on its books and records identifying such
certificated securities (as defined in Section 8-102 of the UCC) of the
Indenture Trustee or its nominee or custodian 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 a
securities intermediary by the amount of such certificated security,
the identification by the clearing corporation on its books and records
that the certificated securities are credited to the sole and exclusive
securities account of the securities intermediary, the maintenance of
such certificated securities by such clearing corporation or a
custodian or the nominee of such clearing corporation subject to the
clearing corporation's exclusive control, and the making by such
securities intermediary of entries on its books and records identifying
such certificated securities as being credited to the securities
account of the Indenture Trustee or its nominee or custodian (all of
the foregoing, "Physical Property"), and, in any event, any such
Physical Property in registered form shall be in the name of the
Indenture Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect
the complete transfer of ownership of any such Trust Account Property
(as defined herein) 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 securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that are book-entry securities 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 which is also a "depository"
pursuant to applicable Federal regulations; the identification by the
Federal Reserve Bank of such book-entry securities on its record being
credited to the securities intermediary's securities account; the
making by such securities intermediary of entries in its books and
records identifying such book-entry security held through the Federal
Reserve System pursuant to Federal book-entry regulations as being
credited to the Indenture Trustee's securities account; 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 or its nominee or custodian,
consistent with changes in applicable law or regulations or the
interpretation thereof; and
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not
governed by clause (a) above, registration on the books and records of
the issuer thereof in the name of the securities intermediary, the
sending of a confirmation by the securities intermediary of the
purchase by the Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such securities intermediary of
entries on its books and records identifying
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such uncertificated certificates as belonging to the Indenture Trustee
or its nominee or custodian.
"Deposit Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a)(i).
"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 one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories that signifies
investment grade.
"Eligible Institution" means (a) a depository institution organized
under the laws of the United States of America or any one of the states thereof
or the District of Columbia (or any domestic branch of a foreign bank), which
(i) has either (A) a long-term unsecured debt rating of "AAA" or better by
Standard & Poor's and "A1" or better by Moody's or (B) a certificate of deposit
rating of "A-1+" by Standard & Poor's and "P-1" or better by Moody's, or any
other long-term, short-term or certificate of deposit rating acceptable to the
Rating Agencies and (ii) whose deposits are insured by the FDIC or (b) the
corporate trust department of the Indenture Trustee, the Owner Trustee or
JPMorgan Chase Bank. If so qualified, the Indenture Trustee, the Owner Trustee
or JPMorgan Chase Bank may be considered an Eligible Institution for the
purposes of clause (a) of this definition.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which 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 thereof (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or State banking or depository institution
authorities; provided, however, that at the time of the investment or
contractual commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such
depository institution or trust company) thereof shall have a credit
rating from each of the Rating Agencies in the highest applicable
rating category granted thereby;
(c) commercial paper, variable amount notes or other short
term debt obligations having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
Rating Agencies in the highest applicable rating category granted
thereby;
(d) investments in money market or common trust funds having a
rating from each of the Rating Agencies in the highest applicable
rating category granted thereby
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(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 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);
(g) repurchase obligations with respect to any security or
whole loan, entered into with (i) a depository institution or trust
company (acting as principal) described in clause (b) above (except
that the rating referred to in the proviso in such clause (b) shall be
"A-1" or higher in the case of Standard & Poor's) (such depository
institution or trust company being referred to in this definition as a
"financial institution"), (ii) a broker/dealer (acting as principal)
registered as a broker or dealer under Section 15 of the Exchange Act
(a "broker/dealer") the unsecured short-term debt obligations of which
are rated "P-1" by Moody's and at least "A-1" by Standard & Poor's at
the time of entering into such repurchase obligation (a "rated
broker/dealer"), (iii) an unrated broker/dealer (an "unrated
broker/dealer"), acting as principal, that is a wholly-owned subsidiary
of a non-bank holding company the unsecured short-term debt obligations
of which are rated "P-1" by Moody's and at least "A-1" by Standard &
Poor's at the time of entering into such repurchase obligation (a
"Rated Holding Company") or (iv) an unrated subsidiary (a "Guaranteed
Counterparty"), acting as principal, that is a wholly-owned subsidiary
of a direct or indirect parent Rated Holding Company, which guarantees
such subsidiary's obligations under such repurchase agreement; provided
that the following conditions are satisfied:
(A) the aggregate amount of funds invested in
repurchase obligations of a financial institution, a rated
broker/dealer, an unrated broker/dealer or Guaranteed
Counterparty in respect of which the Standard & Poor's
unsecured short-term ratings are "A-1" (in the case of an
unrated broker/dealer or Guaranteed Counterparty, such rating
being that of the related Rated Holding Company) shall not
exceed 20% of the sum of the then outstanding principal
balance of the Notes (there being no limit on the amount of
funds that may be invested in repurchase obligations in
respect of which such Standard & Poor's rating is "A-1+" (in
the case of an unrated broker/dealer or Guaranteed
Counterparty, such rating being that of the related Rated
Holding Company));
(B) in the case of the amount allocated to the
Reserve Account, the rating from Standard & Poor's in respect
of the unsecured short-term debt obligations of the financial
institution, rated broker/dealer, unrated broker/dealer or
Guaranteed Counterparty (in the case of an unrated
broker/dealer or Guaranteed Counterparty, such rating being
that of the related Rated Holding Company) shall be "A-1+";
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(C) the repurchase obligation must mature within 30
days of the date on which the Indenture Trustee or the Issuer,
as applicable, enters into such repurchase obligation;
(D) the repurchase obligation shall not be
subordinated to any other obligation of the related financial
institution, rated broker/dealer, unrated broker/dealer or
Guaranteed Counterparty;
(E) the collateral subject to the repurchase
obligation is held, in the appropriate form, by a custodial
bank on behalf of the Indenture Trustee or the Issuer, as
applicable;
(F) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a
Guaranteed Counterparty, the following conditions shall also
be satisfied:
(i) the Indenture Trustee or the
Issuer, as applicable, shall have received an opinion
of counsel (which may be in-house counsel) to the
effect that the guarantee of the related Rated
Holding Company is a legal, valid and binding
agreement of the Rated Holding Company, enforceable
in accordance with its terms, subject as to
enforceability to bankruptcy, insolvency,
reorganization and moratorium or other similar laws
affecting creditors' rights generally and to general
equitable principles;
(ii) the Indenture Trustee or the
Issuer, as applicable, shall have received (x) an
incumbency certificate for the signer of such
guarantee, certified by an officer of such Rated
Holding Company and (y) a resolution, certified by an
officer of the Rated Holding Company, of the board of
directors (or applicable committee thereof) of the
Rated Holding Company authorizing the execution,
delivery and performance of such guarantee by the
Rated Holding Company;
(iii) the only conditions to the
obligation of such Rated Holding Company to pay on
behalf of the Guaranteed Counterparty shall be that
the Guaranteed Counterparty shall not have paid under
such repurchase obligation when required (it being
understood that no notice to, demand on or other
action in respect of the Guaranteed Counterparty is
necessary) and that the Indenture Trustee or the
Issuer shall make a demand on the Rated Holding
Company to make the payment due under such guarantee;
(iv) the guarantee of the Rated
Holding Company shall be irrevocable with respect to
such repurchase obligation and shall not be
subordinated to any other obligation of the Rated
Holding Company; and
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(v) each of Standard & Poor's and
Moody's has confirmed in writing to the Indenture
Trustee or Issuer, as applicable, that it has
reviewed the form of the guarantee of the Rated
Holding Company and has determined that the issuance
of such guarantee will not result in the downgrade or
withdrawal of the ratings assigned to the Notes.
(H) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide
that, upon any failure to maintain such overcollateralization,
the repurchase obligation shall become due and payable, and
unless the repurchase obligation is satisfied immediately, the
collateral subject to the repurchase agreement shall be
liquidated and the proceeds applied to satisfy the unsatisfied
portion of the repurchase obligation;
(h) any other investment with respect to which the Issuer or
the Servicer has received written notification from the Rating Agencies
that the acquisition of such investment as an Eligible Investment will
not result in a withdrawal or downgrading of the ratings on the Notes.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Maturity Date" means March 31, 2008.
"Financed Vehicle" means an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
respective Standard Receivable or Fixed Value Receivable.
"First Release Payment Date" means the Payment Date on which the Class
A-1 Notes have been paid in full.
"Fitch Ratings" means Fitch, Inc., or its successor.
"Fixed Value Finance Charge" means, with respect to each payment
collected on a Fixed Value Receivable, the finance charge included in such
payment (as determined in accordance with the Servicer's customary procedures)
that is allocable to the related Fixed Value Payment.
"Fixed Value Payment" means, with respect to each Fixed Value
Receivable, the amount specified on the applicable Contract as the "Amount of
Fixed Value Payment" reduced (i) in the case of a prepayment or repurchase, by
the amount of the unearned finance charges under the Contract allocable to such
payment in accordance with the Servicer's customary procedures and (ii) in the
case of a liquidation, by the excess of Liquidation Proceeds collected by the
Servicer over the Amortizing Payment on such date.
"Fixed Value Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche) that provides for amortization of the
loan over a series of fixed level payment monthly installments in accordance
with the simple interest method, but also requires a final payment that is
greater than the scheduled monthly payments and is due after payment of such
scheduled monthly payments and that may be made by (i) payment in full in cash
of a fixed value amount, (ii) return of the Financed Vehicle to the Servicer
provided certain
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conditions are satisfied or (iii) refinancing the final fixed value payment in
accordance with specified conditions. No Fixed Value Receivables will be
transferred to the Trust.
"Fixed Value Securities" has the meaning assigned to such term in
Section 2.03.
"Indenture" means the Indenture dated as of April 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 Overcollateralization Amount" means $83,303,165.39.
"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.
"Investment Earnings" means, with respect to any Payment Date, the
investment earnings (net of losses and investment expenses), if any, on amounts
on deposit in the Deposit Account to be applied on such Payment Date pursuant to
Section 5.01(b).
"Issuer" means DaimlerChrysler Auto 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 any Receivable liquidated by the Servicer
through the sale of a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof, from whatever source on a
Liquidated Receivable during the Collection Period in which such Receivable
became a Liquidated Receivable, 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.
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"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and
Class A-4 Notes.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officer's Certificate" means a certificate signed by 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, the Company or the Servicer, as appropriate.
"OMSC Receivable" means any Standard Receivable acquired by DCS from
the Overseas Military Sales Corporation, or its successor.
"Opinion of Counsel" means one or more written opinions of counsel, who
may be an employee of or counsel to the Seller, the Company or the Servicer,
which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or
the Rating Agencies, as applicable.
"Original Pool Balance" means $2,504,880,990.65.
"Overcollateralization Amount" means, with respect to any Payment Date,
(i) the Related Pool Balance minus (ii) the Securities Amount minus (iii) the
YSOA.
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"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, with respect to each Collection Period, the sixth
day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on June 6, 2002.
"Payment Determination Date" means, with respect to any Payment Date,
the Business Day immediately preceding such Payment Date.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day of a
Collection Period, the aggregate Principal Balance of the Receivables as of such
day (excluding Purchased Receivables and 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 and (ii)
the principal portion of the Purchase Amount paid with respect to the
Receivable.
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"Purchase Agreement" means the Purchase Agreement dated as of April 1,
2002, between the Seller and the Company.
"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.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or by the Seller pursuant to Section 3.02.
"Rating Agency" means Moody's and Standard & Poor's or, if no such
organization or successor is any longer in existence, a nationally recognized
statistical rating organization or other comparable Person designated by the
Seller, notice of which designation shall be given to the Indenture Trustee, the
Owner Trustee and the Servicer. Any notice required to be given to a Rating
Agency pursuant to this Agreement shall also be given to Fitch Ratings, although
Fitch Ratings shall not be deemed to be a Rating Agency for any purposes of this
Agreement.
"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 of the
Rating Agencies shall have notified the Seller, the Company, the Servicer, the
Owner Trustee and the Indenture Trustee in writing that such action will not
result in a reduction or withdrawal of the then current rating of the Notes.
"Receivable" means (i) any Standard Receivable and (ii) the Amortizing
Payments with respect to any Fixed Value Receivable.
"Receivable Files" means the documents specified in Section 3.03.
"Related Pool Balance" means, with respect to any Payment Date, the
Pool Balance as of the end of the related Collection Period.
"Reserve Account" means the account that is part of the Deposit Account
and is designated as such, established and maintained pursuant to Section 5.01.
"Reserve Account Initial Deposit" means the initial deposit of cash and
Eligible Investments in the amount of $5,958,500 made by the Seller into the
Deposit Account on the Closing Date.
"Securities Amount" means, with respect to any Payment Date, the sum of
the aggregate Outstanding Amount of the Notes and the Certificate Balance after
giving effect to payments of principal made on the Notes and payments pursuant
to Section 5.05(a)(ii)(E) made on the Certificates on such Payment Date.
"Seller" means DCS and its successors in interest to the extent
permitted hereunder.
"Servicer" means DCS, as the servicer of the Receivables, and each
successor to DCS (in the same capacity) pursuant to Section 7.03 or 8.02.
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"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" means a certificate of the Servicer delivered
pursuant to Section 4.09, substantially in the form of Exhibit B.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 4.08.
"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 the fixed rate of
interest multiplied by the unpaid principal balance multiplied by a fraction,
the numerator of which is the number of days elapsed since the preceding payment
of interest was made, the denominator of which is 365, and the remainder of such
payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Amount" means, with respect to any Payment Date, an
amount equal to the Reserve Account Initial Deposit.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
"Standard Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche) that is not a Fixed Value Receivable.
"Total Distribution Amount" means, for any Payment Date and the
Collection Period preceding such Payment Date, the sum of the following amounts,
without duplication: (a) all collections on Receivables (including payments
relating to refunds of extended warranty protection plan costs or of physical
damage, credit life or disability insurance policy premiums, but only to the
extent that such costs or premiums were financed by the respective obligor as of
the date of the related Contract), (b) all Liquidation Proceeds of Receivables
that became Liquidated Receivables in accordance with the Servicer's customary
servicing procedures, (c) the Purchase Amount of each Receivable that became a
Purchased Receivable in such Collection Period and (d) Investment Earnings
deposited in the Deposit Account during such Collection Period.
"Trust" means the Issuer.
"Trust Account Property" means the Deposit Account, all amounts and
investments held from time to time in the Deposit Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, and all
proceeds of the foregoing.
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"Trust Agreement" means the Amended and Restated Trust Agreement dated
as of April 1, 2002, among the Seller, the Company and the Owner Trustee.
"Trust Officer" means, in the case of the Indenture Trustee, any
Officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, 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 Basic
Documents on behalf of the Owner Trustee.
"YSOA" means, with respect to a Payment Date, the dollar amount set
forth opposite such Payment Date in Schedule YSOA.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to them
in the Indenture.
(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; 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 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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(g) For all purposes of this Agreement and the Basic Documents,
interest with respect to all Classes of Notes other than the Class A-1 Notes
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months; and interest with respect to the Class A-1 Notes shall be computed on
the basis of the actual number of days in each applicable Class A-1 Interest
Accrual Period divided by 360.
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables. In consideration of the
Issuer's delivery to or upon the order of the Seller of (x) $1,794,041,500.00
(which amount represents the Original Pool Balance less (i) the Reserve Account
Initial Deposit, (ii) the Initial Overcollateralization Amount, (iii) the
initial YSOA, (iv) the Class A-1 Principal Balance, (v) the initial Certificate
Balance and (vi) certain other discounts and expenses of the Issuer), and (y)
the Certificates, the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Issuer, without recourse (subject to the obligations of
the Seller set forth herein), all right, title and interest of the Seller in and
to:
(a) the Receivables and all moneys received thereon on and
after April 10, 2002;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the
Seller in the Financed Vehicles;
(c) any proceeds with respect to the Receivables from claims
on any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors;
(d) 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;
(e) any Financed Vehicle that shall have secured a Receivable
and shall have been acquired by or on behalf of the Seller, the
Servicer, the Company or the Trust;
(f) all right, title and interest in all funds on deposit from
time to time in the Deposit Account, including the Reserve Account
Initial Deposit, and in all investments and proceeds thereof (including
all income thereon); and
(g) the proceeds of any and all of the foregoing.
The Seller hereby directs the Issuer to issue the Certificates
to the Company. The Seller and the Issuer acknowledge that $506,000,000
of the purchase price of the Receivables owed by the Issuer to the
Seller pursuant to this Section 2.01 (which amount is not included in
the first sentence of Section 2.01) shall be offset by the Issuer
against delivery of the Class A-1 Notes to the order of the Seller.
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SECTION 2.02. Conveyance of Fixed Value Payments and Fixed Value
Finance Charges. Promptly following the transfer to the Issuer of the
Receivables on the Closing Date, the Issuer shall, without further action
hereunder, be deemed to sell, transfer, assign, set over and otherwise convey to
the Seller, effective as of the Closing Date, without recourse, representation
or warranty, all the right, title and interest of the Issuer in and to the Fixed
Value Payments and the Fixed Value Finance Charges, if any, all monies due and
to become due and all amounts received with respect thereto and all proceeds
thereof, subject to Section 5.03(b).
SECTION 2.03. Fixed Value Securities. (a) At any time after the Closing
Date, at the option of the Seller and upon 10 days prior notice to the Owner
Trustee and the Indenture Trustee, the Seller will be permitted to sell to the
Issuer, and the Issuer shall be obligated to purchase from the Seller (subject
to the availability of funds), all or any portion of the Fixed Value Payments
and/or Fixed Value Finance Charges, subject to the terms and conditions
described below. Upon any such sale, (x) the Seller and the Owner Trustee will
enter into an amendment to this Agreement and the Basic Documents to provide
for, at the election of the Seller, the issuance of certificates representing
ownership interests in the Trust to the extent of such Fixed Value Payments
and/or Fixed Value Finance Charges or the issuance of indebtedness by the Issuer
secured by such Fixed Value Payments (collectively, the "Fixed Value
Securities") and to make any other provisions herein or therein that are
necessary or desirable in connection therewith and (y) the Owner Trustee will
enter into any other agreements or instruments related thereto as requested by
the Seller; provided, however, that the Owner Trustee may, but shall not be
obligated to, enter into any such amendment, agreement or instrument that
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or any other Basic Document; and provided, further, that the
obligation of the Issuer to purchase such Fixed Value Payments and/or Fixed
Value Finance Charges and of the Owner Trustee to enter into any such amendment
or other agreement or instrument is subject to the following conditions
precedent:
(i) such amendment and other agreements and instruments, in
forms satisfactory to the Owner Trustee and, in the case of amendments
or agreements to be executed and delivered by the Indenture Trustee, in
forms satisfactory to the Indenture Trustee, shall have been executed
by each other party thereto and delivered to the Owner Trustee or the
Indenture Trustee as appropriate;
(ii) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel to the effect that each condition precedent (including the
requirement with respect to all required filings) provided by this
Section has been complied with and such amendment or other agreement or
instrument is authorized or permitted by this Agreement;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such sale and issuance;
(iv) such sale and issuance and such amendment or other
agreement or instrument shall not adversely affect in any material
respect the interest of any Noteholder or Certificateholder, and the
Seller shall have provided to the Owner Trustee and the Indenture
Trustee an Officer's Certificate to such effect;
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(v) the Owner Trustee and the Indenture Trustee shall have
received an Opinion of Counsel to the effect that such sale and
issuance will not have any material tax consequence to any Noteholder
or Certificateholder; and
(vi) all filings and other actions required to continue the
first perfected interest of the Trust in the Owner Trust Estate and the
Indenture Trustee in the Collateral shall have been duly made or taken
by the Seller.
(b) Except as described in Section 10.04, the Seller will not sell,
transfer, assign, set over or otherwise convey the Fixed Value Payments and
Fixed Value Finance Charges other than to the Issuer pursuant to paragraph (a).
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of Seller with Respect to
the Receivables. The Seller makes the following representations and warranties
as to the Receivables on which the Issuer is deemed to have relied in acquiring
the Receivables. Such representations and warranties speak as of the execution
and delivery of this Agreement and as of the Closing Date, but shall survive the
sale, transfer and assignment of the Receivables to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. Each Standard Receivable
and Fixed Value Receivable (A) was originated in the United States of
America by a Dealer for the retail sale of a Financed Vehicle in the
ordinary course of such Dealer's business, was fully and properly
executed by the parties thereto, was purchased by the Seller from such
Dealer under an existing dealer agreement, (B) has created or shall
create a valid, subsisting and enforceable first priority security
interest in favor of the Seller and is assignable by the Seller to the
Issuer and by the Issuer to the Indenture Trustee, (C) contains
customary and enforceable provisions such that the rights and remedies
of the holder thereof are adequate for realization against the
collateral of the benefits of the security, and (D) generally provides
for level monthly payments (provided, that the payment in the first or
last month in the life of the Standard Receivable or Fixed Value
Receivable may be minimally different from the level payments and that
the payment in the last month of a Fixed Value Receivable may be a
Fixed Value Payment) that fully amortize the Amount Financed by
maturity and yield interest at the Annual Percentage Rate. No
Receivable conveyed to the Issuer on the Closing Date is an OMSC
Receivable or has forced-placed physical damage insurance.
(b) Schedule of Receivables. The information set forth in
Schedule A to this Agreement is true and correct in all material
respects as of the opening of business on the applicable Cutoff Date,
and no selection procedures believed to be adverse to the Noteholders
or Certificateholders were utilized in selecting the Receivables. The
computer tape or other listing regarding the Standard Receivables and
the Fixed Value Receivables made available to the Issuer and its
assigns (which computer tape or other listing is required to be
delivered as specified herein) is true and correct in all respects.
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(c) Compliance with Law. Each Standard Receivable and Fixed
Value Receivable and the sale of the Financed Vehicle complied at the
time it was originated or made and, at the execution of this Agreement,
complies in all material respects with all requirements of applicable
federal, state and local laws and regulations thereunder, including
usury laws, the federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the
▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve Board's Regulations B
and Z, the Texas Consumer Credit Code and State adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code, and
other consumer credit laws and equal credit opportunity and disclosure
laws.
(d) Binding Obligation. Each Standard Receivable and Fixed
Value Receivable represents the genuine, legal, valid and binding
payment obligation in writing of the Obligor, enforceable by the holder
thereof in accordance with its terms.
(e) No Government Obligor. None of the Standard Receivables or
Fixed Value Receivables is due from the United States of America or any
State or from any agency, department or instrumentality of the United
States of America or any State.
(f) Security Interest in Financed Vehicle. Immediately prior
to the sale, assignment and transfer thereof, each Standard Receivable
and Fixed Value Receivable shall be secured by a validly perfected
first security interest in the Financed Vehicle in favor of the Seller
as secured party or all necessary and appropriate actions have been
commenced that would result in the valid perfection of a first security
interest in the Financed Vehicle in favor of the Seller as secured
party.
(g) Receivables in Force. No Standard Receivable or Fixed
Value Receivable has been satisfied, subordinated or rescinded, nor has
any Financed Vehicle been released from the lien granted by the related
Standard Receivable or Fixed Value Receivable in whole or in part.
(h) No Amendments. No Standard Receivable or Fixed Value
Receivable has been amended such that the amount of the Obligor's
scheduled payments has been increased.
(i) No Waiver. No provision of a Standard Receivable or Fixed
Value Receivable has been waived.
(j) No Defenses. No right of rescission, setoff, counterclaim
or defense has been asserted or threatened with respect to any Standard
Receivable or Fixed Value Receivable.
(k) No Liens. To the best of the Seller's knowledge, no liens
or claims have been filed for work, labor or materials relating to a
Financed Vehicle that are liens prior to, or equal to or coordinate
with, the security interest in the Financed Vehicle granted by any
Standard Receivable or Fixed Value Receivable.
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(l) No Default. No Standard Receivable or Fixed Value
Receivable has a payment that is more than 30 days overdue as of the
related Cutoff Date, and, except as permitted in this paragraph, no
default, breach, violation or event permitting acceleration under the
terms of any Standard Receivable or Fixed Value Receivable has
occurred; and no continuing condition that with notice or the lapse of
time would constitute a default, breach, violation or event permitting
acceleration under the terms of any Standard Receivable or Fixed Value
Receivable has arisen; and the Seller has not waived and shall not
waive any of the foregoing.
(m) Insurance. The Seller, in accordance with its customary
procedures, has determined that, at the origination of the Standard
Receivable or Fixed Value Receivable, the Obligor had obtained physical
damage insurance covering the Financed Vehicle and under the terms of
the Standard Receivable and Fixed Value Receivable the Obligor is
required to maintain such insurance.
(n) Title. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute a sale of the Standard
Receivables and Fixed Value Receivables from the Seller to the Issuer
and that the beneficial interest in and title to the Standard
Receivables and Fixed Value Receivables not be part of the debtor's
estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. No Standard Receivable or
Fixed Value Receivable has been sold, transferred, assigned or pledged
by the Seller to any Person other than the Issuer. Immediately prior to
the transfer and assignment herein contemplated, the Seller had good
and marketable title to each Standard Receivable and Fixed Value
Receivable free and clear of all Liens, encumbrances, security
interests and rights of others and, immediately upon the transfer
thereof, the Issuer shall have good and marketable title to each
Standard Receivable and Fixed Value Receivable, free and clear of all
Liens, encumbrances, security interests and rights of others; and the
transfer has been perfected under the UCC.
(o) Lawful Assignment. No Standard Receivable or Fixed Value
Receivable has been originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer and assignment of such
Standard Receivable or Fixed Value Receivable or any Receivable under
this Agreement or the Indenture is unlawful, void or voidable.
(p) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Issuer a first perfected
ownership interest in the Standard Receivable and Fixed Value
Receivables, and to give the Indenture Trustee a first perfected
security interest therein, shall have been made.
(q) One Original. There is only one original executed copy of
each Standard Receivable and Fixed Value Receivable.
(r) Maturity of Receivables. Each Standard Receivable and
Fixed Value Receivable has a final maturity date before March 31, 2008.
(s) Scheduled Payments. (A) Each Standard Receivable and Fixed
Value Receivable has a first scheduled due date on or prior to the end
of the month following
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the related Cutoff Date and (B) no Standard Receivable or Fixed Value
Receivable has a payment that is more than 30 days overdue as of the
related Cutoff Date, and has a final scheduled payment date no later
than the Final Scheduled Maturity Date.
(t) Location of Receivable Files. The Receivable Files are
kept at one or more of the locations listed in Schedule B.
(u) Remaining Maturity. The latest scheduled maturity of any
Standard Receivable or Fixed Value Receivable shall be no later than
the Final Scheduled Maturity Date.
(v) Outstanding Principal Balance. Each Standard Receivable
and Fixed Value Receivable has an outstanding principal balance of at
least $1,000.00.
(w) No Bankruptcies. No Obligor on any Standard Receivable or
Fixed Value Receivable as of the related Cutoff Date was noted in the
related Receivable File as the subject of a bankruptcy proceeding.
(x) No Repossessions. No Financed Vehicle securing any
Standard Receivable or Fixed Value Receivable is in repossession
status.
(y) Chattel Paper. Each Standard Receivable and Fixed Value
Receivable constitutes "chattel paper" as defined in the UCC.
(z) Agreement. The representations of the Seller in Section
6.01 are true and correct.
(aa) Financing. As of the Cutoff Date, approximately 84.54% of
the aggregate principal balance of the Receivables, constituting
approximately 79.14% of the number of Receivables, represents new
vehicles; approximately all of the Receivables are Simple Interest
Receivables; and none of the Receivables are Fixed Value Receivables.
The aggregate principal balance of the Receivables, as of the Cutoff
Date is $2,504,880,990.65.
SECTION 3.02. Repurchase upon Breach. The Seller, the Servicer or the
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery of
any breach of the Seller's representations and warranties made pursuant to
Section 3.01 or 6.01. Unless any such breach shall have been cured by the last
day of the second Collection Period following the discovery thereof by the Owner
Trustee or receipt by the Owner Trustee of written notice from the Seller or the
Servicer of such breach, the Seller shall be obligated to repurchase any
Receivable materially and adversely affected by any such breach as of such last
day (or, at the Seller's option, the last day of the first Collection Period
following the discovery). In consideration of the repurchase of any such
Receivable, the Seller shall remit the Purchase Amount, in the manner specified
in Section 5.04. Subject to the provisions of Section 6.03, the sole remedy of
the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders or the
Certificateholders with respect to a breach of representations and warranties
pursuant to Section 3.01 and the agreement contained in this
19
Section shall be to require the Seller to repurchase Receivables pursuant to
this Section, subject to the conditions contained herein.
SECTION 3.03. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer hereby
revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the following documents or instruments which are hereby or will
hereby be constructively delivered to the Indenture Trustee, as pledgee of the
Issuer, as of the Closing Date with respect to each Receivable:
(a) the fully executed original of the Standard Receivable or
Fixed Value Receivable;
(b) the original credit application fully executed by the
Obligor;
(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 or the
Seller shall keep on file, in accordance with its customary procedures,
relating to a Standard Receivable or Fixed Value Receivable, an Obligor
or a Financed Vehicle.
SECTION 3.04. Duties of Servicer as Custodian. (a) Safekeeping. 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 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 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 B or at such
other office as shall be specified to the Issuer and the Indenture Trustee by
written notice not later than 90 days after any change in location. The Servicer
shall make available to the Issuer and the Indenture Trustee or their respective
duly authorized representatives, attorneys or auditors a list of locations of
the Receivable Files and the related accounts, records and computer systems
maintained by the Servicer at such times during normal business hours as the
Issuer or the Indenture Trustee shall instruct.
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(c) Release of Documents. 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 3.05. Instructions; Authority To Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Trust Officer of the
Indenture Trustee.
SECTION 3.06. Custodian's Indemnification. The Servicer as custodian
shall indemnify the Trust, the Owner Trustee and the Indenture Trustee and each
of their respective officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or asserted
against the Trust, the Owner Trustee or the Indenture Trustee or any of their
respective 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 for any portion of any such
amount resulting from the willful misfeasance, bad faith or negligence of the
Owner Trustee, and the Servicer shall not be liable to the Indenture Trustee for
any portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Indenture Trustee.
SECTION 3.07. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section. If
DCS shall resign as Servicer in accordance with the provisions of this Agreement
or if all of the rights and obligations of any Servicer shall have been
terminated under Section 8.01, the appointment of such Servicer as custodian
shall be terminated by the Indenture Trustee or by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes or, with the
consent of Holders of the Notes evidencing not less than 25% of the Outstanding
Amount of the Notes, by the Owner Trustee, in the same manner as the Indenture
Trustee or such Holders may terminate the rights and obligations of the Servicer
under Section 8.01. The Indenture Trustee or, with the consent of the Indenture
Trustee, the Owner Trustee may terminate the Servicer's appointment as
custodian, with cause, at any time upon written notification to the Servicer
and, without cause, upon 30 days' prior written notification to the Servicer. As
soon as practicable after any termination of such appointment, the Servicer
shall deliver the Receivable Files to the Indenture Trustee or the Indenture
Trustee's agent at such place or places as the Indenture Trustee may reasonably
designate.
SECTION 3.08. Representations and Warranties as to the Security
Interest of the Issuer in the Receivables. The Seller makes the following
representations and warranties to the Issuer. The representations and warranties
speak as of the execution and delivery of this Agreement and as of the Closing
Date, and shall survive the sale of the Trust Estate to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
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(a) This Agreement creates a valid and continuing security interest (as
defined in the UCC) in the Receivables in favor of the Trust, which security
interest is prior to all other Liens, and is enforceable as such as against
creditors of and purchasers from the Seller.
(b) The Receivables constitute "chattel paper" within the meaning of
Article 9 of the UCC.
(c) The Seller owns and has good and marketable title to the
Receivables free and clear of any lien, claim or encumbrance of any Person.
(d) The Seller has caused or will have caused, within ten days, 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 in the Receivables granted to the Issuer hereunder.
(e) Other than the security interest granted to the Issuer pursuant to
this Agreement, the Seller has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Receivables. The Seller has not
authorized the filing of and is not aware of any financing statements against
the Seller that include a description of collateral covering the Receivables
other than any financing statement relating to the security interest granted to
the Seller hereunder or that has been terminated. The Seller is not aware of any
judgment or tax lien filings against it.
(f) The Servicer as custodian for the Issuer has in its possession all
original copies of the contracts that constitute or evidence the Receivables.
The contracts that constitute or evidence the Receivables do not have any marks
or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Issuer.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer. The Servicer, for the benefit of the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting tax
information to Obligors, accounting for collections and furnishing monthly and
annual statements to the Owner Trustee and the Indenture Trustee with respect to
distributions. Subject to the provisions of Section 4.02, the Servicer shall
follow its customary standards, policies and procedures in performing its duties
as Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders 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
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such Receivables. If the Servicer shall commence a legal proceeding to enforce a
Receivable, the Issuer (in the case of a Receivable other than a Purchased
Receivable) shall thereupon be deemed to have automatically assigned, solely for
the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may not
enforce a Receivable on the 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 Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders. The Owner Trustee
shall upon the written request of the Servicer furnish the Servicer with any
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder.
SECTION 4.02. Collection and 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 Standard Receivable
or Fixed Value Receivable; provided, however, that if the Servicer extends the
date for final payment by the Obligor of any Receivable beyond the Final
Scheduled Maturity Date, it shall promptly repurchase the Standard Receivable or
Fixed Value Receivable from the Issuer in accordance with the terms of Section
4.07. The Servicer may in its discretion waive any late payment charge or any
other fees that may be collected in the ordinary course of servicing a Standard
Receivable or Fixed Value Receivable. The Servicer shall not agree to any
alteration of the interest rate or the originally scheduled payments on any
Standard Receivable or Fixed Value Receivable.
SECTION 4.03. Realization upon Receivables. On behalf of the Issuer,
the Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Financed
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 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Vehicle as
of the execution of the Standard Receivable or Fixed Value Receivable.
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SECTION 4.05. Maintenance of Security Interests in Financed Vehicles.
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Standard Receivable and Fixed Value Receivable in the related
Financed Vehicle. The Servicer is hereby authorized to take such steps as are
necessary to re-perfect such security interest on behalf of the Issuer and the
Indenture Trustee in the event of the relocation of a Financed Vehicle or for
any other reason.
SECTION 4.06. Covenants of Servicer. The Servicer shall not release the
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or repossession, nor shall the Servicer impair the rights
of the Issuer, the Indenture Trustee, the Certificateholders or the Noteholders
in such Receivable, nor shall the Servicer increase the number of scheduled
payments due under a Standard Receivable or Fixed Value Receivable.
SECTION 4.07. Purchase of Receivables upon Breach. The Servicer or the
Owner Trustee shall inform the other party and the Indenture Trustee and the
Seller promptly, in writing, upon the discovery of any breach pursuant to
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the last
day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first following Collection Period), the
Servicer shall purchase any Receivable materially and adversely affected by such
breach as of such last day. If the Servicer takes any action during any
Collection Period pursuant to Section 4.02 that impairs the rights of the
Issuer, the Indenture Trustee, the Certificateholders or the Noteholders in any
Receivable or as otherwise provided in Section 4.02, 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 in the manner specified
in Section 5.04. Subject to Section 7.02, the sole remedy of the Issuer, the
Owner Trustee, the Indenture Trustee, the Certificateholders or the Noteholders
with respect to a breach pursuant to Section 4.02, 4.05 or 4.06 shall be to
require the Servicer to purchase Receivables pursuant to this Section. The Owner
Trustee shall have no duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable pursuant
to this Section.
SECTION 4.08. Servicing Fee. The Servicing Fee for a Payment Date shall
equal 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 Cutoff
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. The Servicer shall also be entitled to 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, plus any reimbursement pursuant to the last
paragraph of Section 7.02.
SECTION 4.09. Servicer's Certificate. Not later than 11:00 A.M. (New
York time) on each Payment Determination Date, the Servicer shall deliver to the
Owner Trustee, each Paying Agent, the Indenture Trustee and the Seller, with a
copy to the Rating Agencies, a Servicer's Certificate containing all information
necessary to make the distributions to be made on the related Payment Date
pursuant to Sections 5.05 and 5.06 for the related Collection Period.
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Receivables to be purchased by the Servicer or to be repurchased by the Seller
shall be identified by the Servicer by account number with respect to such
Receivable (as specified in Schedule A).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default. (a)
The Servicer shall deliver to the Owner Trustee and the Indenture Trustee, on or
before April 30 of each year beginning April 30, 2003, 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. The
Indenture Trustee shall send a copy of such certificate and the report referred
to in Section 4.11 to the Rating Agencies. A copy of such certificate and the
report referred to in Section 4.11 may be obtained by any Certificateholder,
Noteholder or Note Owner by a request in writing to the Owner Trustee addressed
to the Corporate Trust Office. Upon the telephone request of the Owner Trustee,
the Indenture Trustee will promptly furnish the Owner Trustee a list of
Noteholders as of the date specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officer's Certificate of any event which with the giving of notice
or lapse of time, or both, would become a Servicer Default under Section 8.01(a)
or (b).
SECTION 4.11. 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 and the Indenture Trustee on or
before April 30 of each year beginning April 30, 2003, a report addressed to the
managers of the Servicer, to the effect that such firm has examined the
financial statements of DCS and issued its report thereon and that such
examination (a) 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.
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 4.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to the Certificateholders and
Noteholders access to the Receivable Files in such cases where the
Certificateholders or Noteholders shall be required by
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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 4.13. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Certificateholders and Noteholders.
SECTION 4.14. Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that the Rating Agency Condition shall
have been satisfied in connection therewith; and provided, further, that the
Servicer shall remain obligated and be liable to the Issuer, the Owner Trustee,
the Indenture Trustee, the Certificateholders and the Noteholders 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
Owner Trustee, the Indenture Trustee, the Certificateholders or the Noteholders
shall have any responsibility therefor.
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.01. Establishment of Deposit Account. (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
"Deposit Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders and the
Certificateholders. The Servicer shall establish the Reserve Account as part of
the Deposit Account.
(b) Funds on deposit in the Deposit Account shall be invested (1) by
the Indenture Trustee in Eligible Investments selected in writing by the
Servicer or an investment manager selected by the Servicer or (2) by an
investment manager in Eligible Investments selected by such investment manager;
provided that (A) such investment manager shall be selected by the Servicer, (B)
such investment manager shall have agreed to comply with the terms of this
Agreement as it relates to investing such funds, (C) any investment so selected
by such investment manager shall be made in the name of the Indenture Trustee
and shall be settled by a Delivery to the Indenture Trustee that complies with
the terms of this Agreement as it relates to investing such funds, and (D) prior
to the settlement of any investment so selected by such
26
investment manager the Indenture Trustee shall affirm that such investment is an
Eligible Investment. The Servicer will direct all investments through written
approval. In the event the Indenture Trustee must invest funds on deposit in the
Deposit Account, the Indenture Trustee will follow the most recent written
direction of the Servicer. It is understood and agreed that the Indenture
Trustee shall not be liable for any loss arising from an investment in Eligible
Investments made in accordance with this Section 5.01(b). All such Eligible
Investments shall be held by the Indenture Trustee for the benefit of the
Noteholders and the Certificateholders, as applicable; provided, that on each
Payment Determination Date all interest and other investment income (net of
losses and investment expenses) on funds on deposit in the Deposit Account (to
the extent such interest and income is on deposit in the Deposit Account at the
end of the related Collection Period) shall be deemed to constitute a portion of
the Total Distribution Amount for the related Payment Date. Other than as
permitted by the Rating Agencies, funds on deposit in the Deposit Account shall
be invested in Eligible Investments that will mature on or before the next
Payment Date.
(c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Deposit Account and in
all proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. The Deposit
Account shall be under the sole dominion and control of the Indenture Trustee
for the benefit of the Noteholders and the Certificateholders, as applicable.
If, at any time, the Deposit 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 Deposit Account as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such new
Deposit Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in
deposit accounts shall be held solely in the Eligible Deposit
Accounts, subject to the last sentence of Section 5.01(c)(i);
and each such Eligible Deposit Account shall be subject to the
exclusive custody and control of the Indenture Trustee, and
the Indenture Trustee shall have sole signature authority with
respect thereto;
(B) any Trust Account Property that constitutes
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; and
27
(D) any Trust Account Property that is an
"uncertificated security" under Article VIII 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.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the
Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Deposit Account for the purpose of
permitting the Servicer to carry out its respective duties hereunder or
permitting the Indenture Trustee to carry out its duties under the
Indenture.
SECTION 5.02. Collections. Subject to the continued satisfaction of the
commingling conditions described below, the Servicer shall remit to the Deposit
Account all payments by or on behalf of the Obligors with respect to the
Receivables (other than Purchased Receivables and not including Fixed Value
Payments), all Liquidation Proceeds collected during the related Collection
Period, prior to 11:00 A.M. (New York time) on the related Payment Date.
Notwithstanding the foregoing, if any of the commingling conditions ceases to be
met, the Servicer shall remit to the Deposit Account all payments by or on
behalf of the Obligors with respect to the Receivables (other than Purchased
Receivables and not including Fixed Value Payments), all Liquidation Proceeds
within two Business Days of receipt thereof. The commingling conditions are as
follows: (i) DCS must be the Servicer, (ii) no Servicer Default shall have
occurred and be continuing and (iii) (x) DCS must maintain a short-term rating
of at least "A-1" by Standard & Poor's and "P-1" by Moody's or (y) if daily
remittances occur hereunder, prior to ceasing daily remittances, the Rating
Agency Condition shall have been satisfied (and any conditions or limitations
imposed by the Rating Agencies in connection therewith are complied with).
Notwithstanding anything herein to the contrary, so long as DCS is the Servicer,
DCS may withhold from the deposit into the Deposit Account any amounts indicated
on the related Servicer's Certificate as being due and payable to DCS or the
Seller and pay such amounts directly to DCS or the Seller, as applicable. 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. In the event the commingling conditions cease to be
met, the Servicer shall make daily remittance of collections to the Deposit
Account within two Business Days of receipt thereof; provided however, daily
remittance may commence no later than five Business Days following a reduction
of DCS's short-term ratings below "A-1" by Standard & Poor's or "P-1" by
Moody's.
SECTION 5.03. Application of Collections. (a) All collections for the
Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall be applied
to interest and principal in accordance with the Simple Interest
Method.
(b) All collections of finance charges on a Fixed Value Receivable (as
determined in accordance with the Servicer's customary procedures) shall be
applied, first, to the Amortizing
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Payment Finance Charges due and unpaid on the related Principal Balance and then
to the Fixed Value Finance Charges due and unpaid on the related Fixed Value
Payment. The Servicer shall release to the Company the Collections allocated to
Fixed Value Finance Charges pursuant to the preceding sentence. All Liquidation
Proceeds with respect to any Fixed Value Receivable shall be applied first to
the related Receivable and only after the payment in full of the Principal
Balance thereof plus accrued but unpaid interest thereon shall any such
Liquidation Proceeds be applied to, or constitute, the related Fixed Value
Payment.
SECTION 5.04. Additional Deposits. The Servicer and the Seller shall
deposit or cause to be deposited in the Deposit Account the aggregate Purchase
Amount with respect to Purchased Receivables and the Servicer shall deposit
therein all amounts to be paid under Section 9.01. The Servicer will deposit the
aggregate Purchase Amount with respect to Purchased Receivables when such
obligations are due, unless the Servicer shall not be required to make daily
deposits pursuant to Section 5.02. All such other deposits shall be made on the
Payment Determination Date for the related Collection Period.
SECTION 5.05. Distributions.
(a) (i) On each Payment Determination Date, the Servicer shall
calculate all amounts required to be distributed to the Noteholders and the
Certificateholders and all amounts to be allocated within the Deposit Account as
described below. For purposes of this Section, the Servicing Fee for the related
Payment Date and any previously unpaid Servicing Fees shall be deducted from the
Total Distribution Amount at any time on or prior to the Payment Date. If the
Total Distribution Amount during a Collection Period has reached a level which
covers the payments due pursuant to clauses (A), (B) and (C) of Section
5.05(a)(ii), then for the remainder of the Collection Period the Servicer may
net the amounts, if any, distributable pursuant to clauses (D) and (E) of
Section 5.05(a)(ii) out of the Total Distribution Amount before depositing the
Total Distribution Amount into the Deposit Account and pay such amounts directly
to the related recipient.
(ii) On each Payment Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Payment Determination Date
pursuant to Section 4.09) to make the following allocations and
distributions by 11:00 A.M. (New York time), to the extent of the Total
Distribution Amount (net of the Servicing Fee for such Payment Date and
any previously unpaid Servicing Fees and any Cash Release Amount
deducted pursuant to Section 5.05(a)(i)), in the following order of
priority:
(A) allocate to the Noteholders for distribution
pursuant to Section 8.02 of the Indenture, from such net Total
Distribution Amount, an amount equal to the accrued and unpaid
interest due on the Notes on such Payment Date;
(B) allocate to the Reserve Account, from such net
Total Distribution Amount remaining after the application of
clause (A), the amount required, if any, such that the amount
therein is the Specified Reserve Amount;
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(C) allocate to the Noteholders for distribution as
principal pursuant to Section 8.02 of the Indenture, from such
net Total Distribution Amount remaining after the application
of clauses (A) and (B), the remaining amount until the
Outstanding Amount of the Notes is reduced to zero; provided,
however, that on each Payment Date on and after the First
Release Payment Date, the amount distributed pursuant to this
clause (C) will be reduced by the Cash Release Amount (which
Cash Release Amount shall either be deducted pursuant to
Section 5.05(a)(i) or distributed pursuant to Section
5.05(a)(ii)(D));
(D) if the conditions set forth in Section 5.05(b)
are satisfied, distribute to the Holders of the Certificates,
from such net Total Distribution Amount remaining after the
application of clauses (A) through (C), the Cash Release
Amount for such Payment Date to the extent not already
deducted pursuant to Section 5.05(a)(i); and
(E) distribute, to the Holders of the Certificates,
such net Total Distribution Amount remaining after the
application of clauses (A) through (D).
Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Deposit Account hereunder until the
Certificates are retired.
(b) The distribution of a Cash Release Amount pursuant to Section
5.05(a) on a Payment Date shall be subject to the satisfaction of all of the
following conditions:
(i) no such distribution or release shall be made until the
First Release Payment Date; and
(ii) the amount allocated to the Reserve Account is equal to
the Specified Reserve Amount.
SECTION 5.06. Reserve Account. (a) On the Closing Date, the Owner
Trustee will deposit, on behalf of the Seller, the Reserve Account Initial
Deposit into the Deposit Account from the net proceeds of the sale of the Notes
which amount shall be allocated to the Reserve Account.
(b) [RESERVED]
(c) (i) In the event that the Total Distribution Amount (after the
payment of the Servicing Fee and any previously unpaid Servicing Fees) with
respect to any Collection Period is less than the accrued and unpaid interest on
the Notes on a Payment Date, the Servicer shall instruct the Indenture Trustee
to withdraw from the Reserve Account on such Payment Date an amount equal to
such deficiency, to the extent of funds available therein, and allocate such
amount for distribution to the Noteholders.
(ii) In the event that the amount allocated for distribution
to the Noteholders pursuant to Section 5.05(a)(ii)(C) is insufficient
to make payments of principal on (A) the Class A-1 Notes so that the
Outstanding Amount for the Class A-1 Notes equals zero on the Class A-1
Final Scheduled Payment Date; (B) the Class A-2 Notes so that the
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Outstanding Amount for the Class A-2 Notes equals zero on the Class A-2
Final Scheduled Payment Date; (C) the Class A-3 Notes so that the
Outstanding Amount for the Class A-3 Notes equals zero on the Class A-3
Final Scheduled Payment Date; and (D) the Class A-4 Notes so that the
Outstanding Amount for the Class A-4 Notes equals zero on the Class A-4
Final Scheduled Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Class Final
Scheduled Payment Date an amount equal to such deficiency, to the
extent of funds available therein, and allocate such amount for
distribution to the Noteholders in accordance with this Sale and
Servicing Agreement.
(iii) In the event that the Outstanding Amount of the Notes
exceeds the Related Pool Balance, the Servicer shall instruct
the Indenture Trustee to withdraw from the Reserve Account on
the related Payment Date an amount equal to such excess, to
the extent of funds available therein, and allocate such
amount for distribution to the Noteholders.
(d) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.05(a) following payment in full of both the Outstanding
Amount of the Notes and of the Certificate Balance of the Certificates until the
Pool Balance is reduced to zero. Following the payment in full of the aggregate
Outstanding Amount of the Notes and of the Certificate Balance of the
Certificates 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 distributed
to the Seller.
SECTION 5.07. Statements to Noteholders and Certificateholders. On each
Payment Date, the Servicer shall make available via its website to the Owner
Trustee, the Rating Agencies, the Noteholders and the Certificateholders and
provide to the Indenture Trustee and each Paying Agent a statement substantially
in the form of Exhibit A, setting forth at least the following information as to
the Notes, to the extent applicable:
(i) the amount of such distribution allocable to principal
allocable to each Class of Notes;
(ii) the amount of such distribution allocable to interest
allocable to each Class of Notes;
(iii) the outstanding principal balance of each Class of Notes
as of the close of business on the last day of the preceding Collection
Period, after giving effect to payments allocated to principal reported
under clause (i) above;
(iv) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
(v) the amount allocated to the Reserve Account on such
Payment Determination Date after giving effect to allocations thereto
and withdrawals therefrom to be made on the next following Payment
Date, if any; and
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(vi) 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 (i) above.
Each amount set forth on the Payment Date statement under clauses (i),
(ii) or (iv) above shall be expressed as a dollar amount per $1,000 of original
principal balance of a Note.
SECTION 5.08. Net Deposits. As an administrative convenience, unless
the Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables and Purchase
Amounts for the Collection Period net of distributions to be made to the
Servicer with respect to the Collection Period. The Servicer, however, will
account to the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders as if all deposits, distributions and transfers were made
individually.
ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller. The Seller makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Receivables. The representations speak as of the execution and delivery of this
Agreement and as of the Closing Date, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly
organized and validly existing as a limited liability company in good
standing under the laws of the State of Michigan, with the power and
authority as a limited liability company 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
Standard Receivables and the Fixed Value Receivables.
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign limited liability company in good standing, and
has obtained all necessary licenses and approvals, in all jurisdictions
in which the ownership or lease of property or the conduct of its
business shall require such qualifications.
(c) Power and Authority. The Seller has the power and
authority as a limited liability company to execute and deliver this
Agreement and to carry out its terms; the Seller has full power and
authority to sell and assign the property to be sold and assigned to
and deposited with the Issuer, and the Seller shall have duly
authorized such sale and assignment to the Issuer by all necessary
action as a limited liability company; and the execution, delivery and
performance of this Agreement has been duly authorized by the Seller by
all necessary action as a limited liability company.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Seller enforceable in accordance
with its terms.
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(e) No Violation. 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
the Seller, or any indenture, agreement or other instrument to which
the Seller is a party or by which it is bound; or result in the
creation or imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other instrument
(other than pursuant to this Agreement and the Basic Documents); or
violate any law or, to the best of the Seller's knowledge, any order,
rule or regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties.
(f) No Proceedings. To the Seller's best knowledge, there are
no proceedings or investigations pending or threatened before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties:
(i) asserting the invalidity of this Agreement, the Indenture or any of
the other Basic Documents, the Notes or the Certificates, (ii) seeking
to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement,
the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates or (iv) which might
adversely affect the federal or state income tax attributes of the
Notes or the Certificates.
SECTION 6.02. Preservation of Existence. During the term of this
Agreement, the Seller will keep in full force and effect its existence, rights
and franchises as a limited liability company (or another legal entity) under
the laws of the jurisdiction of its organization 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 Seller and its Affiliates (including the
Company) will be conducted on an arm's-length basis.
SECTION 6.03. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement:
(a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company and the
Servicer and any of the officers, directors, employees and agents of
the Issuer, the Owner Trustee and the Indenture Trustee from and
against any taxes that may at any time be asserted against any such
Person with respect to the transactions contemplated herein and in the
Basic Documents, 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
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issuance and original sale of the Certificates and 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.
(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company, the
Certificateholders and the Noteholders and any of the officers,
directors, employees and agents of the Issuer, the Owner Trustee and
the Indenture Trustee from and against any loss, liability or expense
incurred by reason of (i) the Seller's willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, or
by reason of reckless disregard of its obligations and duties under
this Agreement and (ii) the Seller's or the Issuer's violation of
federal or state securities laws in connection with the offering and
sale of the Notes and the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein and in the Trust Agreement contained, in the case of the Owner
Trustee, and in the Indenture contained, in the case of the Indenture
Trustee, except to the extent that such cost, expense, loss, claim,
damage or liability: (i) in the case of the Owner Trustee, shall be due
to the willful misfeasance, bad faith or negligence (except for errors
in judgment) of the Owner Trustee or, in the case of the Indenture
Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Indenture Trustee; or
(ii) in the case of the Owner Trustee, shall arise from the breach by
the Owner Trustee of any of its representations or warranties set forth
in Section 7.03 of the Trust Agreement.
(d) The Seller shall pay any and all taxes levied or assessed
upon all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
SECTION 6.04. Merger or Consolidation of, or Assumption of Obligations
of, Seller. Any Person (a) into which the Seller may be merged or consolidated,
(b) which may result from any merger or consolidation to which the Seller shall
be a party or (c) which may succeed to the properties and assets of the Seller
substantially as a whole, which Person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller 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 3.01 shall
have been breached and no Servicer Default, and
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no event that, after notice or lapse of time, or both, would become a Servicer
Default shall have occurred and be continuing, (ii) the Seller shall have
delivered to the Owner Trustee and the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, (iii) the Rating Agency
Condition shall have been satisfied with respect to such transaction and (iv)
the Seller shall have delivered to the Owner Trustee and the Indenture Trustee
an Opinion of Counsel either (A) stating that, in the opinion of such counsel,
all financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interests. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii), (iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
SECTION 6.05. Limitation on Liability of Seller and Others. The Seller
and any director, officer, employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in, prosecute
or defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability.
SECTION 6.06. Seller May Own Notes. The Seller and any Affiliate
thereof may in its individual or any other capacity become the owner or pledgee
of Notes with the same rights as it would have if it were not the Seller or an
Affiliate thereof, except as expressly provided herein or in any Basic Document.
The Seller shall not own any Certificates unless the Rating Agency Condition is
satisfied.
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a limited liability company in good
standing under the laws of the state of its formation, with the power
and authority as a limited liability company 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,
35
authority and legal right to acquire, own, sell and service the
Standard Receivables and the Fixed Value Receivables and to hold the
Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign limited liability company in good standing, and
has obtained all necessary licenses and approvals, in all jurisdictions
in which the ownership or lease of property or the conduct of its
business (including the servicing of the Standard Receivables and the
Fixed Value Receivables as required by this Agreement) shall require
such qualifications.
(c) Power and Authority. The Servicer has the power and
authority as a limited liability company 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 the Servicer
by all necessary action as a limited liability company.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Servicer enforceable in accordance
with its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under, the articles of organization or operating agreement of
the Servicer, or any indenture, agreement 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 or other instrument
(other than this Agreement); or violate any law or, to the best of the
Servicer's knowledge, any order, rule or regulation applicable to the
Servicer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
(f) No Proceedings. To the Servicer's best knowledge, there
are no proceedings or investigations pending or threatened before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement, the
Indenture, any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents, the Notes
or the Certificates or (iv) relating to the Servicer and which might
adversely affect the federal or state income tax attributes of the
Notes or the Certificates.
(g) No Insolvent Obligors. As of the related Cutoff Date, no
Obligor on a Standard Receivable or Fixed Value Receivable is shown on
the Receivable Files as the subject of a bankruptcy proceeding.
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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 under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders, the Company and the Seller and any of the officers,
directors, employees and agents of the Issuer, the Owner Trustee and
the Indenture Trustee from and against any and all costs, expenses,
losses, damages, claims and liabilities arising out of or resulting
from the use, ownership or operation by the Servicer or any Affiliate
thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the
Company, the Certificateholders and the Noteholders and any of the
officers, directors, employees and agents of the Issuer, the Owner
Trustee and the Indenture Trustee from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that
such cost, expense, loss, claim, damage or liability arose out of, or
was imposed upon any such Person through, the negligence, willful
misfeasance or bad faith of 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.
For purposes of this Section, in the event of the termination of the
rights and obligations of DCS (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture Trustee)
pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or 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 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 Obligations
of, 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 DaimlerChrysler AG or an affiliate
of or successor to DaimlerChrysler AG or an affiliate of such successor, which
Person executed an agreement of assumption to perform every obligation of the
Servicer hereunder, shall be the successor to the Servicer under this Agreement
without further act on the part of any of the parties to this Agreement;
provided, however, that (i) immediately after giving effect to such transaction,
no Servicer Default and no event which, after notice or lapse of time, or both,
would become a Servicer Default shall have occurred and be continuing, (ii) the
Servicer shall have delivered to the Owner Trustee and the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel
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each stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with,
(iii) the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) immediately after giving effect to such transaction, the
successor to the Servicer shall become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement and (v)
the Servicer shall have delivered to the Owner Trustee and the Indenture Trustee
an Opinion of Counsel stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings or (B) no such action shall
be necessary to preserve and protect such interests. Notwithstanding anything
herein to the contrary, the execution of the foregoing agreement of assumption
and compliance with clauses (i), (ii), (iii), (iv) and (v) above shall be
conditions to the consummation of the transactions referred to in clause (a) ,
(b) or (c) above.
SECTION 7.04. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the managers, officers, employees or agents of the
Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action 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. The Servicer and any manager, officer, employee
or agent of the Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any person respecting any matters
arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with this
Agreement and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement and the Basic
Documents and the rights and duties of the parties to this Agreement and the
Basic Documents and the interests of the Certificateholders under this Agreement
and the Noteholders under the Indenture.
SECTION 7.05. DCS Not To Resign as Servicer. Subject to the provisions
of Section 7.03, DCS 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 DCS shall be communicated to the
Owner Trustee and the Indenture Trustee at the earliest practicable time (and,
if such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall (i) have assumed the responsibilities and obligations of DCS in
accordance with
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Section 8.02 and (ii) have become the Administrator under the Administration
Agreement in accordance with Section 8 of such Agreement.
ARTICLE VIII
Default
SECTION 8.01. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deposit in the Deposit
Account any required payment or to direct the Indenture Trustee to make
any required distributions therefrom, which failure continues
unremedied for a period of five Business Days after written notice of
such failure is received by the Servicer from the Owner Trustee or the
Indenture Trustee or after discovery of such failure by an officer of
the Servicer; or
(b) failure by the Servicer or the Seller, as the case may be,
duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer or the Seller (as the case may
be) set forth in this Agreement or any other Basic Document, which
failure shall (i) materially and adversely affect the rights of
Certificateholders or Noteholders 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 or the Seller (as the case may be) by the Owner Trustee
or the Indenture Trustee or (B) to the Servicer or the Seller (as the
case may be), and to the Owner Trustee and the Indenture Trustee by the
Holders of Notes or Certificates, as applicable, evidencing not less
than 25% of the Outstanding Amount of the Notes or evidencing
Percentage Interests (as defined in the Trust Agreement) aggregating at
least 25%; or
(c) the occurrence of an Insolvency Event with respect to the
Seller, the Servicer or the Company;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee or the Holders of Notes evidencing
not less than 25% of the Outstanding Amount of the Notes, by notice then given
in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee
if given by the Noteholders) may terminate all the rights and obligations (other
than the obligations set forth in Section 7.02 hereof) of the Servicer under
this Agreement. On or after the 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 the Indenture Trustee or such
successor Servicer as may be appointed under Section 8.02; and, without
limitation, the Indenture Trustee and the Owner Trustee are hereby authorized
and empowered to execute and deliver, for the benefit of the predecessor
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and related documents,
or otherwise.
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The predecessor Servicer shall cooperate with the successor Servicer, the
Indenture Trustee and the Owner Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the successor Servicer for administration by it of all
cash amounts that shall at the time be held by the predecessor Servicer for
deposit, or shall thereafter be received by it with respect to any Receivable.
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. Upon receipt of notice of
the occurrence of a Servicer Default, the Owner Trustee shall give notice
thereof to the Rating Agencies.
SECTION 8.02. Appointment of Successor. (a) Upon the Servicer's receipt
of notice of termination pursuant to Section 8.01 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (i) the date 45 days
from the delivery to the Owner Trustee and the Indenture Trustee of written
notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (ii) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Servicer's termination hereunder, the Indenture Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its appointment
(including its appointment as Administrator under the Administration Agreement
as set forth in Section 8.02(b)) by a written assumption in form acceptable to
the Owner Trustee and the Indenture Trustee. In the event that a successor
Servicer has not been appointed at the time when the predecessor Servicer has
ceased to act as Servicer in accordance with this Section, the Indenture Trustee
without further action shall automatically be appointed the successor Servicer
and the Indenture Trustee shall be entitled to the Servicing Fee.
Notwithstanding the above, the Indenture Trustee shall, if it shall be unwilling
or legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint any established institution, having a net worth of not
less than $100,000,000 and whose regular business shall include the servicing of
automotive receivables, as the successor to the Servicer under this Agreement.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall (i) 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 and (ii) become the Administrator under the Administration Agreement
in accordance with Section 8 of the Administration Agreement.
(c) The Servicer may not resign unless it is prohibited from serving as
such by law.
SECTION 8.03. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the
40
Owner Trustee shall give prompt written notice thereof to Certificateholders,
and the Indenture Trustee shall give prompt written notice thereof to
Noteholders and the Rating Agencies.
SECTION 8.04. Waiver of Past Defaults. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes or the Holders
(as defined in the Trust Agreement) of Certificates evidencing not less than a
majority of the Percentage Interests (as defined in the Trust Agreement) may, on
behalf of all Noteholders or the Holders of the Certificates, as the case may
be, 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 allocations or distributions from the Deposit Account in accordance
with this Agreement. Upon any such waiver of a past default, such default shall
cease to exist, and any Servicer Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereto.
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables. (a) As of the last
day of any Collection Period as of which the then outstanding Pool Balance is
10% or less of the Original Pool Balance and the Class A-1 Notes, Class A-2
Notes and Class A-3 Notes have been paid in full or will be paid in full on the
next Payment Date, the Servicer shall have the option to purchase the Owner
Trust Estate, other than the Deposit Account; provided, however, that, unless
Moody's agrees otherwise, the Servicer may not effect any such purchase if the
rating of the Servicer's long-term debt obligations is less than Baa3 by
Moody's, unless the Owner Trustee and the Indenture Trustee shall have received
an Opinion of Counsel to the effect that such purchase would not constitute a
fraudulent conveyance. To exercise such option, the Servicer shall deposit
pursuant to Section 5.04 in the Deposit Account an amount equal to the aggregate
Purchase Amount for the Receivables (including defaulted Receivables), plus the
appraised value of any such other property held by the Trust other than the
Deposit Account, such value to be determined by an appraiser mutually agreed
upon by the Servicer, the Owner Trustee and the Indenture Trustee, and shall
succeed to all interests in and to the Trust. Notwithstanding the foregoing, the
Servicer shall not be permitted to exercise such option unless the amount to be
deposited in the Deposit Account pursuant to the preceding sentence, together
with any other funds in the Deposit Account, is greater than or equal to the sum
of the outstanding principal balance of the Notes and the Certificate Balance of
the Certificates and all accrued but unpaid interest (including any overdue
interest and premium) thereon.
(b) Notice of the exercise of the option in Section 9.01(a) shall be
given by the Servicer to the Owner Trustee and the Indenture Trustee on or prior
to the last day of the Collection Period referred to in Section 9.01(a).
41
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment. This Agreement may be amended by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee, but
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 (including for the issuance of Fixed
Value Securities pursuant to Section 2.03) 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.
This Agreement may also be amended from time to time by the Seller, the
Servicer and the Issuer, with the consent of the Indenture Trustee, the consent
of the Holders of Notes evidencing not less than a majority of the Outstanding
Amount of the Notes and the consent of the Holders (as defined in the Trust
Agreement) of outstanding Certificates evidencing not less than a majority of
the Percentage Interests (as defined in the Trust Agreement) for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided, however, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on Receivables or distributions that
shall be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes or the Percentage Interests (as defined in the Trust
Agreement), the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes and the Holders
(as defined in the Trust Agreement) of all the outstanding Certificates.
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, the Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee 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)(1). The Owner Trustee and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's or
the Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.
42
SECTION 10.02. Protection of Title to Trust. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and of the Indenture Trustee in the Receivables and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Seller nor 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. 9-402(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) Each of the Seller and 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 change, 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
Standard Receivable and each Fixed Value Receivable accurately and in sufficient
detail to permit (i) the reader thereof to know at any time the status of such
Standard Receivable or Fixed Value 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 Standard Receivable or Fixed
Value Receivable and the amounts from time to time deposited in the Deposit
Account in respect of such Standard Receivable or Fixed Value Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Standard Receivables and the
Fixed Value Receivables, the Servicer's master computer records (including any
backup archives) that refer to a Standard Receivable or Fixed Value Receivable
shall indicate clearly the interest of the Issuer and the Indenture Trustee in
such Standard Receivable or Fixed Value Receivable and that such Standard
Receivable or Fixed Value Receivable is owned by the Issuer and has been pledged
to the Indenture Trustee. Indication of the Issuer's and the Indenture Trustee's
interest in a Standard Receivable or Fixed Value Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
related Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller or 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 Standard
Receivable or Fixed Value
43
Receivable, shall indicate clearly that such Standard Receivable or Fixed Value
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 at
any time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Standard Receivable or Fixed
Value Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee or to
the Indenture Trustee, within five Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer's Certificates furnished before such request indicating removal of
Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) 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 preserve and protect the interest of the
Owner Trustee and the Indenture Trustee in the Receivables, and
reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) no such action shall be
necessary to preserve and protect such interest; and
(2) 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 fully to preserve and
protect the interest of the Owner Trustee and the Indenture Trustee in
the Receivables, and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are given, or (B) no
such action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall specify any
action necessary (as of the date of such opinion) to be taken in the following
year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause
the Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
SECTION 10.03. Notices. All demands, notices, communications and
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Seller or the Servicer, to DaimlerChrysler Services North America
LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, CIMS ▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention of Assistant Secretary ((▇▇▇) ▇▇▇-▇▇▇▇), (b) in the case of the Issuer
or the Owner Trustee, at the Corporate Trust Office (as defined in the Trust
Agreement), (c) in the case of the Indenture Trustee, at the Corporate Trust
44
Office, (d) in the case of Moody's, to ▇▇▇▇▇'▇ Investors Service, Inc., ABS
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (e) in the
case of Standard & Poor's, to Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention of Asset Backed Surveillance Department, and (f) in the case of Fitch
Ratings, to Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention
of Structured Finance Asset Backed Securities; 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 Seller or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided in
the remainder of this Section, 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 Seller or the Servicer.
The Issuer and the Servicer hereby acknowledge and consent to the conveyance and
assignment (i) by the Seller to the Company pursuant to the Purchase Agreement
and (ii) by the Company to a limited liability company or other Person (provided
that conveyance and assignment is made in accordance with Section 5.05 of the
Purchase Agreement), of any and all of the Seller's rights and interests (and
corresponding obligations, if any) hereunder with respect to receiving amounts
from the Reserve Account and with respect to receiving and conveying any Fixed
Value Payments, and the Issuer and the Servicer hereby agree that the Company,
and any such assignee of the Company, shall be entitled to enforce such rights
and interests directly against the Issuer as if the Company, or such assignee of
the Company, were itself a party to this Agreement.
SECTION 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Seller, the Company (and any
assignee of the Company pursuant to Section 10.04), the Servicer, 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 Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.07. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.09. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and
45
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
SECTION 10.10. Assignment by Issuer. The Seller hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest by
the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders of all right, title and interest of the Issuer in, to and under
the Receivables and/or the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
SECTION 10.11. Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, the Servicer and the Seller shall not, prior to
the date which is one year and one day after the termination of this Agreement
with respect to the Issuer or the Company, acquiesce, petition or otherwise
invoke or cause the Issuer or the Company (or any assignee of the Company
pursuant to Section 10.04) to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
or the Company (or any assignee of the Company pursuant to Section 10.04) 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 Company (or any assignee of the Company
pursuant to Section 10.04) or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Issuer or the Company (or
any assignee of the Company pursuant to Section 10.04).
(b) 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 Seller, acquiesce, petition or
otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller 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 Seller or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Seller.
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 Chase Manhattan Bank USA, National
Association not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer and in no event shall Chase Manhattan Bank USA, National
Association in its individual capacity or, except as expressly provided in the
Trust Agreement, as beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of its
duties or obligations hereunder or in the performance of any duties or
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 Bank One, National Association, not in its
individual capacity but solely as Indenture Trustee and in no event shall Bank
One, National Association have any liability for the
46
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.
47
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.
DAIMLERCHRYSLER AUTO TRUST 2002-A
By: CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner
Trustee on behalf of the Trust
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
DAIMLERCHRYSLER SERVICES NORTH
AMERICA LLC,
Seller and Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Controller
Acknowledged and accepted as of the day and year first above written:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SCHEDULE A
Schedule of Receivables
Delivered to the Owner Trustee and Indenture Trustee at Closing
Schedule A
SCHEDULE B
[Location of Receivable Files]
1. DaimlerChrysler Services North America LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. DaimlerChrysler Services North America LLC, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
3. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
4. DaimlerChrysler Services ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
5. DaimlerChrysler Services North America LLC, ▇▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
6. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7. DaimlerChrysler Services North America LLC, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
8. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇. ▇ & ▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
9. DaimlerChrysler Services North America LLC, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
10. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
11. DaimlerChrysler Services North America LLC, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
12. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
13. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
14. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
15. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
16. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
17. DaimlerChrysler Services North America LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
18. DaimlerChrysler Services ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
19. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
20. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
21. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
22. DaimlerChrysler Services North America LLC, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
23. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
24. DaimlerChrysler Services North America LLC, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Schedule B
25. DaimlerChrysler Services North America LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
26. DaimlerChrysler Services North America LLC, Plaza Quebec 1, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
27. DaimlerChrysler Services North America LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Schedule B
SCHEDULE C
Schedule of YSOA
"YSOA" means, with respect to any Payment Date, the amount specified
below with respect to such Payment Date:
Closing Date ...................................... $ 38,177,825.26
June 2002 ......................................... 34,126,998.92
July 2002 ......................................... 32,188,328.79
August 2002 ....................................... 30,307,838.31
September 2002 .................................... 28,485,797.95
October 2002 ...................................... 26,722,479.35
November 2002 ..................................... 25,018,155.04
December 2002 ..................................... 23,373,025.05
January 2003 ...................................... 21,787,212.55
February 2003 ..................................... 20,260,756.61
March 2003 ........................................ 18,793,583.45
April 2003 ........................................ 17,385,565.66
May 2003 .......................................... 16,036,483.97
June 2003 ......................................... 14,746,233.33
July 2003 ......................................... 13,514,875.63
August 2003 ....................................... 12,342,449.72
September 2003 .................................... 11,229,014.44
October 2003 ...................................... 10,174,743.89
November 2003 ..................................... 9,179,814.49
December 2003 ..................................... 8,244,441.62
January 2004 ...................................... 7,368,824.52
February 2004 ..................................... 6,553,125.11
March 2004 ........................................ 5,797,485.77
April 2004 ........................................ 5,102,078.60
May 2004 .......................................... 4,466,722.41
June 2004 ......................................... 3,890,875.60
July 2004 ......................................... 3,374,210.47
August 2004 ....................................... 2,916,323.64
September 2004 .................................... 2,516,825.71
October 2004 ...................................... 2,175,405.77
November 2004 ..................................... 1,891,882.74
December 2004 ..................................... 1,664,838.47
January 2005 ...................................... 1,482,517.74
February 2005 ..................................... 1,330,534.30
March 2005 ........................................ 1,194,897.46
April 2005 ........................................ 1,069,987.24
May 2005 .......................................... 953,941.75
June 2005 ......................................... 845,735.10
July 2005 ......................................... 745,108.10
August 2005 ....................................... 651,905.40
September 2005 .................................... 566,009.32
October 2005 ...................................... 487,329.23
November 2005 ..................................... 415,793.43
December 2005 ..................................... 351,336.86
January 2006 ...................................... 293,813.60
February 2006 ..................................... 242,683.44
March 2006 ........................................ 197,139.82
April 2006 ........................................ 156,955.36
May 2006 .......................................... 121,982.00
June 2006 ......................................... 91,990.28
July 2006 ......................................... 66,783.26
August 2006 ....................................... 46,121.15
September 2006 .................................... 29,752.92
October 2006 ...................................... 17,483.16
November 2006 ..................................... 9,185.02
December 2006 ..................................... 4,557.13
January 2007 ...................................... 2,125.72
February 2007 ..................................... 823.90
March 2007 ........................................ 225.47
April 2007 ........................................ 32.76
May 2007 .......................................... 24.30
June 2007 ......................................... 17.27
July 2007 ......................................... 11.63
August 2007 ....................................... 7.34
September 2007 .................................... 4.18
October 2007 ...................................... 2.15
November 2007 ..................................... 0.94
December 2007 ..................................... 0.25
January 2008 ...................................... $ 0.00
Schedule C
The YSOA has been calculated for each Payment Date as the sum of the
amount for each Receivable equal to the excess, if any, of
- the scheduled payments due on such Receivable for each future
Collection Period discounted to present value as of the end of the
preceding Collection Period at the APR of such Receivable, over
- the scheduled payments due on the Receivable for each future Collection
Period discounted to present value as of the end of the preceding
Collection Period at 5.0%.
For purposes of such calculation, future scheduled payments on the
Receivables are assumed to be made on their scheduled due dates without any
delays, defaults or prepayments.
Schedule C
EXHIBIT A
Form of Distribution Statement to Noteholders
DaimlerChrysler Services North America LLC
DaimlerChrysler Auto Trust 2002-A Payment Date Statement to Noteholders
--------------------------------------------------------------------------------
Amount of Principal Paid to:
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Amount of Interest Paid to:
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Total Distribution Amount:
Note Balance
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Servicing Fee
Servicing Fee Per $1,000 Note
Reserve Account Balance
Pool Balance
A-1
EXHIBIT B
Form of Servicer's Certificate
DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC DISTRIBUTION DATE: [ ]
DAIMLERCHRYSLER AUTO TRUST 2002-A MONTHLY SERVICER'S CERTIFICATE PAGE 1 OF 2
----------------------------------------------------------------------------------------------------------------------
Payment Determination Statement Number
Distribution Date
DATES COVERED FROM AND INCLUDING TO AND INCLUDING
------------- ------------------ ----------------
Collections Period
Accrual Period
30/360 Days
Actual/360 Days
NUMBER OF
COLLATERAL POOL BALANCE DATA 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)
Ending O/C Amount
Coverage Ratio (Ending Pool Balance as a Percent of
Ending Securities)
Cumulative Net Losses
Net Loss Ratio (3 mo. Weighted Avg.)
60+ Days Delinquency Amount
Delinquency Ratio (3 mo. Weighted Avg.)
Weighted Average APR
Weighted Average Remaining Term (months)
Weighted Average Seasoning (months)
B-1
EXHIBIT B
Form of Servicer's Certificate
DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC DISTRIBUTION DATE: [ ]
DAIMLERCHRYSLER AUTO TRUST [ ] MONTHLY SERVICER'S CERTIFICATE PAGE 1 OF 2
----------------------------------------------------------------------------------------------------------------------
CASH SOURCES
------------
Collections of Installment Principal
Collections Attributable to Full
Payoffs
Principal Amount of Repurchases O/C RELEASE
-----------
Recoveries on Loss Accounts Original O/C Amount
Collections of Interest
Investment Earnings Cumulative O/C Release (beginning)
Reserve Account O/C Release
---------- ----------
TOTAL SOURCES Cumulative O/C Release (ending)
==========
CASH USES
---------
Servicer Fee
Note Interest
Reserve Fund
O/C Release to Certificateholder
Note Principal
----------
TOTAL CASH USES
==========
ADMINISTRATIVE PAYMENT
----------------------
Total Principal and Interest Sources
Investment Earnings in Deposit Account
Cash Reserve in Deposit Account
Servicer Fee (withheld)
O/C Release to Certificateholder
----------
PAYMENT DUE TO DEPOSIT ACCOUNT
==========
Principal Interest
Beginning Ending Principal per $1000 Interest [per $1000
Balance Balance Payment Face Payment Face
------------ ----------- ------------ ----------- ------------ -----------
NOTES & CERTIFICATES
--------------------
Class A-1 @ %
Class A-2 @ %
Class A-3 @ %
Class A-4 @ %
Certificates
------------------------------------- ------------
Total Securities
===================================== ============
* Class A-1 Interest is computed on an Actual/360 Basis. Days in current period
B-2
