EXECUTION COPY
SALE AND SERVICING AGREEMENT
Dated as of March 1, 1997
among
OLYMPIC AUTOMOBILE RECEIVABLES TRUST, 1997-A
Issuer
OLYMPIC RECEIVABLES FINANCE CORP.
Seller
OLYMPIC FINANCIAL LTD.
In its individual capacity and as Servicer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Backup Servicer
TABLE OF CONTENTS
PAGE
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INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Usage of Terms . . . . . . . . . . . . . . . . . . . 28
SECTION 1.3. Calculations . . . . . . . . . . . . . . . . . . . . 28
SECTION 1.4. Section References . . . . . . . . . . . . . . . . . 28
SECTION 1.5. No Recourse . . . . . . . . . . . . . . . . . . . . . 28
SECTION 1.6. Material Adverse Effect . . . . . . . . . . . . . . . 28
ARTICLE II CONVEYANCE OF RECEIVABLES . . . . . . . . . . . . . . . . . 28
SECTION 2.1. Conveyance of Initial Receivables . . . . . . . . . . 28
SECTION 2.2. Custody of Receivable Files . . . . . . . . . . . . . 29
SECTION 2.3. Conditions to Acceptance by Owner Trustee . . . . . . 30
SECTION 2.4. Conveyance of Subsequent Receivables . . . . . . . . 31
SECTION 2.5. Representations and Warranties of Seller . . . . . . 34
SECTION 2.6. Repurchase of Receivables Upon Breach of Warranty . . 37
SECTION 2.7. Nonpetition Covenant . . . . . . . . . . . . . . . . 38
SECTION 2.8. Collecting Lien Certificates Not Delivered on the
Closing Date or Subsequent Transfer Date . . . . . . 38
SECTION 2.9. Trust's Assignment of Administrative Receivables
and Warranty Receivables . . . . . . . . . . . . . . 38
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES . . . . . . . . 39
SECTION 3.1. Duties of the Servicer . . . . . . . . . . . . . . . 39
SECTION 3.2. Collection of Receivable Payments; Modifications of
Receivables; Lockbox Agreements . . . . . . . . . . . 40
SECTION 3.3. Realization Upon Receivables . . . . . . . . . . . . 43
SECTION 3.4. Insurance . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 3.5. Maintenance of Security Interests in Vehicles . . . . 46
SECTION 3.6. Covenants, Representations, and Warranties of
Servicer . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.7. Purchase of Receivables Upon Breach of Covenant . . . 49
SECTION 3.8. Total Servicing Fee; Payment of Certain Expenses by
Servicer . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.9. Servicer's Certificate . . . . . . . . . . . . . . . 50
SECTION 3.10. Annual Statement as to Compliance; Notice of
Servicer Termination Event . . . . . . . . . . . . . 51
SECTION 3.11. Annual Independent Accountants' Report . . . . . . . 52
SECTION 3.12. Access to Certain Documentation and Information
Regarding Receivables . . . . . . . . . . . . . . . . 53
SECTION 3.13. Monthly Tape . . . . . . . . . . . . . . . . . . . . 53
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SECTION 3.14. Retention and Termination of Servicer . . . . . . . . 54
SECTION 3.15. Fidelity Bond . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.16. Duties of the Servicer under the Indenture . . . . . 55
SECTION 3.17. Duties of the Servicer under the Insurance
Agreement . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.18. Certain Duties of the Servicer under the Trust
Agreement . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE IV DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS . . . . . . . . . . . . . 57
SECTION 4.1. Trust Accounts . . . . . . . . . . . . . . . . . . . 57
SECTION 4.2. Collections . . . . . . . . . . . . . . . . . . . . . 59
SECTION 4.3. Application of Collections . . . . . . . . . . . . . 60
SECTION 4.4. Monthly Advances . . . . . . . . . . . . . . . . . . 61
SECTION 4.5. Additional Deposits . . . . . . . . . . . . . . . . . 62
SECTION 4.6. Distributions . . . . . . . . . . . . . . . . . . . . 62
SECTION 4.7. Pre-Funding Account . . . . . . . . . . . . . . . . . 64
SECTION 4.8. Net Deposits . . . . . . . . . . . . . . . . . . . . 65
SECTION 4.9. Statements to Certificateholders and Noteholders . . 65
SECTION 4.10. Indenture Trustee as Agent . . . . . . . . . . . . . 68
SECTION 4.11. Eligible Accounts . . . . . . . . . . . . . . . . . . 68
ARTICLE V THE RESERVE ACCOUNT; THE SPREAD ACCOUNT
AND THE CERTIFICATE POLICY. . . . . . . . . . . . . . . . . 68
SECTION 5.1. Withdrawals from the Reserve Account . . . . . . . . 68
SECTION 5.2. Withdrawals from Spread Account . . . . . . . . . . . 69
SECTION 5.3. Claims Under Certificate Policy . . . . . . . . . . . 69
SECTION 5.4. Preference Claims . . . . . . . . . . . . . . . . . . 71
ARTICLE VI THE SELLER . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.1. Liability of Seller . . . . . . . . . . . . . . . . . 72
SECTION 6.2. Merger or Consolidation of, or Assumption of the
Obligations of, Seller; Amendment of Certificate of
Incorporation . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.3. Limitation on Liability of Seller and Others . . . . 73
SECTION 6.4. Seller May Own Certificates or Notes . . . . . . . . 73
ARTICLE VII THE SERVICER . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 7.1. Liability of Servicer; Indemnities . . . . . . . . . 74
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or Backup Servicer . . . 75
SECTION 7.3. Limitation on Liability of Servicer, Backup Servicer
and Others . . . . . . . . . . . . . . . . . . . . . 76
SECTION 7.4. Delegation of Duties . . . . . . . . . . . . . . . . 77
SECTION 7.5. Servicer and Backup Servicer Not to Resign . . . . . 77
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ARTICLE VIII SERVICER TERMINATION EVENTS. . . . . . . . . . . . . . . . 78
SECTION 8.1. Servicer Termination Event . . . . . . . . . . . . . 78
SECTION 8.2. Consequences of a Servicer Termination Event . . . . 80
SECTION 8.3. Appointment of Successor . . . . . . . . . . . . . . 81
SECTION 8.4. Notification to Certificateholders and Noteholders . 82
SECTION 8.5. Waiver of Past Defaults . . . . . . . . . . . . . . . 83
ARTICLE IX TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 9.1. Optional Purchase of All Receivables; Liquidation of
Trust Estate . . . . . . . . . . . . . . . . . . . . 83
ARTICLE X MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . 85
SECTION 10.1. Amendment . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.2. Protection of Title to Trust Property . . . . . . . . 86
SECTION 10.3. Governing Law . . . . . . . . . . . . . . . . . . . . 88
SECTION 10.4. Severability of Provisions . . . . . . . . . . . . . 88
SECTION 10.5. Assignment . . . . . . . . . . . . . . . . . . . . . 88
SECTION 10.6. Third-Party Beneficiaries . . . . . . . . . . . . . . 89
SECTION 10.7. Disclaimer by Security Insurer . . . . . . . . . . . 89
SECTION 10.8. Counterparts . . . . . . . . . . . . . . . . . . . . 89
SECTION 10.9. Intention of Parties . . . . . . . . . . . . . . . . 89
SECTION 10.10. Notices . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 10.11. Limitation of Liability . . . . . . . . . . . . . . . 90
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SCHEDULES
Schedule A -- Representations and Warranties of Seller and OFL
Schedule B -- Servicing Policies and Procedures
EXHIBITS
Exhibit A -- Schedule of Initial Receivables
Exhibit B -- Form of Custodian Agreement (OFL)
Exhibit C -- Form of Spread Account Agreement
Exhibit D -- Form of Receivables Purchase Agreement
Exhibit E -- Form of Servicer's Certificate
Exhibit F -- Form of Certificate Policy
Exhibit G -- Form of Subsequent Transfer Agreement
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THIS SALE AND SERVICING AGREEMENT, dated as of March 1, 1997, is made
among Olympic Automobile Receivables Trust, 1997-A (the "Issuer"), Olympic
Receivables Finance Corp., a Delaware corporation, as Seller (the "Seller"),
Olympic Financial Ltd., a Minnesota corporation, in its individual capacity
and as Servicer (in its individual capacity, "OFL"; in its capacity as
Servicer, the "Servicer") and Norwest Bank Minnesota, National Association, a
national banking association, as Backup Servicer (the "Backup Servicer").
In consideration of the mutual agreements herein contained, and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. All terms defined in the Spread Account
Agreement, the Indenture or the Trust Agreement (each as defined below) shall
have the same meaning in this Agreement. Whenever capitalized and used in
this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
ACCOUNTANTS' REPORT: The report of a firm of nationally recognized
independent accountants described in Section 3.11.
ACCOUNTING DATE: With respect to a Distribution Date, the last day
of the Monthly Period immediately preceding such Distribution Date.
ACTUAL FUNDS: With respect to a Distribution Date, the sum of
(i) Available Funds for such Distribution Date, plus (ii) the portion of the
Reserve Amount, if any, deposited pursuant to Section 5.1(a) into the
Collection Account with respect to such Distribution Date.
ADDITION NOTICE: With respect to any transfer of Subsequent
Receivables to the Trust pursuant to Section 2.4, a notice, which shall be
given not later than 15 days prior to the related Subsequent Transfer Date,
of the Seller's designation of Subsequent Receivables to be transferred to
the Issuer and the aggregate Principal Balance of such Subsequent Receivables.
ADMINISTRATIVE RECEIVABLE: With respect to any Monthly Period, a
Receivable which the Servicer is required to purchase pursuant to Section 3.7
or which the Servicer has elected to purchase pursuant to Section 3.4(c).
AFFILIATE: With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person, means the power to
direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
AGGREGATE PRINCIPAL BALANCE: With respect to any Determination Date,
the sum of the Principal Balances (computed as of the related Accounting
Date) for all Receivables (other than (i) any Receivable that became a
Liquidated Receivable during the related Monthly Period and (ii) any
Receivable that became a Purchased Receivable as of the immediately preceding
Accounting Date).
AGREEMENT OR "THIS AGREEMENT": This Sale and Servicing Agreement,
all amendments and supplements thereto and all exhibits and schedules to any
of the foregoing.
AMOUNT FINANCED: With respect to a Receivable, the aggregate amount
advanced under such Receivable toward the purchase price of the Financed
Vehicle and related costs, including amounts advanced in respect of
accessories, insurance premiums, service and warranty contracts, other items
customarily financed as part of retail automobile installment sale contracts
or promissory notes, and related costs. The term "Amount Financed" shall not
include any Insurance Add-On Amounts.
ANNUAL PERCENTAGE RATE OR APR: With respect to a Receivable, the
rate per annum of finance charges stated in such Receivable as the "annual
percentage rate" (within the meaning of the Federal Truth-in-Lending Act).
If after the Closing Date, the rate per annum with respect to a Receivable as
of the Closing Date is reduced as a result of (i) an insolvency proceeding
involving the Obligor or (ii) pursuant to the Soldiers' and Sailors' Civil
Relief Act of 1940, Annual Percentage Rate or APR shall refer to such reduced
rate.
ARCC PURCHASE AGREEMENT: The Receivables Purchase Agreement and
Assignment, dated as of December 3, 1996, between OFL and the Seller.
ASSUMED REINVESTMENT RATE: 2.5% per annum.
AVAILABLE FUNDS: With respect to any Determination Date, the sum of
(i) the Collected Funds for such Determination Date, (ii) all Purchase Amounts
deposited in the Collection Account as of the related Deposit Date, (iii) all
Monthly Advances made by the Servicer as of the related Deposit Date, and
(iv) all net income from investments of funds in the Trust Accounts and the
Certificate Distribution Account during the related Monthly Period.
BACKUP SERVICER: Norwest Bank Minnesota, National Association, or
its successor in interest pursuant to Section 8.2, or such Person as shall
have been appointed as Backup Servicer or successor Servicer pursuant to
Section 8.3.
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BASIC SERVICING FEE: With respect to any Monthly Period, the fee
payable to the Servicer for services rendered during such Monthly Period,
which shall be equal to one-twelfth of the Basic Servicing Fee Rate
multiplied by the Aggregate Principal Balance as of the Determination Date
falling in such Monthly Period.
BASIC SERVICING FEE RATE: 1.00% per annum, payable monthly at
one-twelfth of the annual rate.
BUSINESS DAY: Any day other than a Saturday, Sunday, legal holiday
or other day on which commercial banking institutions in Minneapolis,
Minnesota, New York, New York, Wilmington, Delaware or any other location of
any successor Servicer, successor Owner Trustee, successor Indenture Trustee
or successor Collateral Agent are authorized or obligated by law, executive
order or governmental decree to be closed.
CERTIFICATE BALANCE: As of any date, $77,500,000 less all amounts
previously distributed to Certificateholders in respect of principal.
CERTIFICATE DISTRIBUTION ACCOUNT: The meaning assigned to such term
in the Trust Agreement.
CERTIFICATE MAJORITY: Holders of Certificates representing more than
05% of the Certificate Balance.
CERTIFICATE POLICY: The financial guaranty insurance policy issued
by the Security Insurer to the Owner Trustee on behalf of the
Certificateholders.
CERTIFICATE POLICY CLAIM AMOUNT: The meaning set forth in Section
5.3(a).
CERTIFICATE POOL FACTOR: With respect to any Distribution Date, an
eight digit decimal figure equal to the Certificate Balance as of such
Distribution Date (after giving effect to distributions on such Distribution
Date) divided by the Certificate Balance as of the Closing Date.
CERTIFICATE PREPAYMENT AMOUNT: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect
to any transfer of Subsequent Receivables on such date, an amount equal to
the Certificateholders' pro rata share (based on the respective current
outstanding principal balance of each class of Notes and the current
Certificate Balance) of the Pre-Funded Amount as of such Distribution Date.
CERTIFICATE PREPAYMENT PREMIUM: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount
of interest that would accrue on the Certificate Prepayment Amount at the
Pass-
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Through Rate during the period commencing on and including the Distribution
Date on which the Certificate Prepayment Amount is required to be deposited
in the Certificate Distribution Account pursuant to Section 4.7(b) to but
excluding May 31, 1999, over (ii) the amount of interest that would have
accrued on the Certificate Prepayment Amount over the same period at a per
annum rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the 6.375% U.S.
Treasury Note due May 31, 1999. Such excess shall be discounted to present
value to such Distribution Date at the yield described in clause (ii) above.
CERTIFICATEHOLDERS' DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Certificateholders' Interest Distributable
Amount and the Certificateholders' Principal Distributable Amount.
CERTIFICATEHOLDERS' INTEREST CARRYOVER SHORTFALL: With respect to
any Distribution Date, the excess of the Certificateholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any
Certificateholders' Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest on the Certificates
that is actually deposited in the Certificate Distribution Account on such
preceding Distribution Date, plus interest on such excess, to the extent
permitted by law, at the Pass-Through Rate from such preceding Distribution
Date to but excluding the current Distribution Date.
CERTIFICATEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT: With respect to
any Distribution Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date and the Certificateholders'
Interest Carryover Shortfall for such Distribution Date.
CERTIFICATEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, 30 days of interest (or, in the case of the
first Distribution Date, interest accrued from and including the Closing Date
to but excluding April 15, 1997) at the Pass-Through Rate on the Certificate
Balance as of the close of business on the preceding Distribution Date (or,
in the case of the first Distribution Date, on the Closing Date).
CERTIFICATEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, the Certificateholders' Percentage of the
Principal Distribution Amount.
CERTIFICATEHOLDERS' PERCENTAGE: (i) with respect to any
Determination Date relating to a Distribution Date prior to the Distribution
Date on which the principal balance of the Class A-1 Notes is reduced to
zero, 0%; (ii) with respect to the Determination Date relating to the
Distribution Date on which the principal balance of the Class A-1 Notes is
reduced to zero, 0% with respect to that portion of the Principal
Distribution Amount equal to the unpaid principal balance of the Class A-1
Notes, and 100% minus the Noteholders' Percentage as of such Determination
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Date (computed after giving effect to the retirement of the Class A-1 Notes)
with respect to the remaining portion of the Principal Distribution Amount;
(iii) with respect to any Determination Date relating to a Distribution Date
after the Distribution Date on which the principal balance of the Class A-1
Notes is reduced to zero, 100% minus the Noteholders' Percentage as of such
Determination Date.
CERTIFICATEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL: As of the close
of any Distribution Date, the excess of the sum of the Certificateholders'
Monthly Principal Distributable Amount and any outstanding
Certificateholders' Principal Carryover Shortfall from the preceding
Distribution Date, over the amount in respect of principal that is actually
deposited in the Certificate Distribution Account on such Distribution Date.
CERTIFICATEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT: With respect to
any Distribution Date (other than the Final Scheduled Distribution Date), the
sum of the Certificateholders' Monthly Principal Distributable Amount for
such Distribution Date and any Certificateholders' Principal Carryover
Shortfall as of the close of the preceding Distribution Date; PROVIDED,
HOWEVER, that the Certificateholders' Principal Distributable Amount shall
not exceed the Certificate Balance. The "Certificateholders' Principal
Distributable Amount" on the Final Scheduled Distribution Date will equal the
Certificate Balance as of the Final Scheduled Distribution Date.
CLASS A-1 FINAL SCHEDULED DISTRIBUTION DATE: March 15, 1998 (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
CLASS A-1 HOLDBACK AMOUNT: As of any Subsequent Transfer Date, an
amount equal to 2.5% of the amount, if any, by which the applicable "Target
Original Pool Balance" specified below is greater than the Original Pool
Balance after giving effect to the transfer of Subsequent Receivables on such
Subsequent Transfer Date:
Subsequent Transfer Date Target Original Pool Balance
------------------------ ----------------------------
March 20 - April 14 $677,301,936.79
April 15 - May 14 $775,000,000.00
CLASS A-1 HOLDBACK SUBACCOUNT: The subaccount of the Reserve Account,
the funds in which shall consist of all Class A-1 Holdback Amounts deposited
therein during the Funding Period, other than investment earnings thereon.
Any funds in the Class A-1 Holdback Subaccount shall be withdrawn on the
Class A-1 Final Scheduled Distribution Date and distributed as specified in
Section 5.1(b).
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CLASS A-1 INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Class A-1 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-1 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-1 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-1 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
CLASS A-1 INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-1 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-1 Interest Carryover
Shortfall for such Distribution Date.
CLASS A-1 INTEREST RATE: 5.50% per annum.
CLASS A-1 MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the product of (i) the product of (x) the Class A-1
Interst Rate and (y) a fraction, the numerator of which is the number of days
elapsed from and including the most recent date to which interest has been
paid (or, in the case of the first Distribution Date, interest accrued for
the number of days elapsed from and including the Closing Date to but
excluding April 15, 1997) and (ii) the outstanding principal balance of the
Class A-1 Notes on the immediately preceding Distribution Date (or, in the
case of the first Distribution Date, on the Closing Date), after giving
effect to all payments of principal to Class A-1 Noteholders on or prior to
such immediately preceding Distribution Date (or, in the case of the first
Distribution Date, on the Closing Date).
CLASS A-1 PREPAYMENT AMOUNT: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect
to any transfer of Subsequent Receivables on such date, an amount equal to
the Class A-1 Noteholders' pro rata share (based on the respective current
outstanding principal balance of each class of Notes and the current
Certificate Balance) of the Pre-Funded Amount as of such Distribution Date.
CLASS A-1 PREPAYMENT PREMIUM: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount
of interest that would accrue on the Class A-1 Prepayment Amount at the Class
A-1 Interest Rate during the period commencing on and including the
Distribution Date on which the Class A-1 Prepayment Amount is required to be
deposited in the Note Distribution Account pursuant to Section 4.7 to but
excluding June 19, 1997, over (ii) the amount of interest that would have
accrued on the Class A-1 Prepayment Amount over the same period at a per
annum rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the United States
Treasury ▇▇▇▇ due June 19, 1997. Such excess shall be
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discounted to present value to such Distribution Date at the yield described
in clause (ii) above.
CLASS A-2 FINAL SCHEDULED DISTRIBUTION DATE: August 15, 2000 (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
CLASS A-2 INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Class A-2 Interest Distributable Amount
for the preceding Distribution Date, over the amount in respect of interest
on the Class A-2 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-2 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-2 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
CLASS A-2 INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-2 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-2 Interest Carryover
Shortfall for such Distribution Date.
CLASS A-2 INTEREST RATE: 6.125% per annum.
CLASS A-2 MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to
but excluding April 15, 1997) at the Class A-2 Interest Rate on the
outstanding principal balance of the Class A-2 Notes on the immediately
preceding Distribution Date (or, in the case of the first Distribution Date,
on the Closing Date), after giving effect to all payments of principal to
Class A-2 Noteholders on such or prior to immediately preceding Distribution
Date.
CLASS A-2 PREPAYMENT AMOUNT: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect
to any transfer of Subsequent Receivables on such date, an amount equal to
the Class A-2 Noteholders' pro rata share (based on the respective current
outstanding principal balance of each class of Notes and the current
Certificate Balance) of the Pre-Funded Amount as of such Distribution Date.
CLASS A-2 PREPAYMENT PREMIUM: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount
of interest that would accrue on the Class A-2 Prepayment Amount at the Class
A-2 Interest Rate during the period commencing on and including the
Distribution Date on which the Class A-2 Prepayment Amount is required to be
deposited in the Note Distribution Account pursuant to Section 4.7 to but
excluding February 28, 1998, over (ii) the amount of interest that would have
accrued on the Class A-2 Prepayment Amount over the same period at a per
annum rate of interest equal to
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the yield to maturity on the Determination Date preceding such Distribution
Date on the 5.125% U.S. Treasury Note due February 28, 1998. Such excess
shall be discounted to present value to such Distribution Date at the yield
described in clause (ii) above.
CLASS A-3 FINAL SCHEDULED DISTRIBUTION DATE: September 15, 2001
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).
CLASS A-3 INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Class A-3 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-3 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-3 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-3 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
CLASS A-3 INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-3 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-3 Interest Carryover
Shortfall for such Distribution Date.
CLASS A-3 INTEREST RATE: 6.40% per annum.
CLASS A-3 MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to but
excluding April 15, 1997) at the Class A-3 Interest Rate on the outstanding
principal balance of the Class A-3 Notes on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date), after giving effect to all payments of principal to Class A-3
Noteholders on or prior to such immediately preceding Distribution Date.
CLASS A-3 PREPAYMENT AMOUNT: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect
to any transfer of Subsequent Receivables on such date, an amount equal to
the Class A-3 Noteholders' pro rata share (based on the respective current
outstanding principal balance of each class of Notes and the current
Certificate Balance) of the Pre-Funded Amount as of such Distribution Date.
CLASS A-3 PREPAYMENT PREMIUM: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount
of interest that would accrue on the Class A-3 Prepayment Amount at the Class
A-3 Interest Rate during the period commencing on and including the
Distribution Date on which the Class A-3 Prepayment Amount is required to be
deposited in the Note Distribution Account pursuant to Section 4.7 to but
excluding February 28, 1999,
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over (ii) the amount of interest that would have accrued on the Class A-3
Prepayment Amount over the same period at a per annum rate of interest equal
to the yield to maturity on the Determination Date preceding such
Distribution Date on the 5.875% U.S. Treasury Note due February 28, 1999.
Such excess shall be discounted to present value to such Distribution Date at
the yield described in clause (ii) above.
CLASS A-4 FINAL SCHEDULED DISTRIBUTION DATE: December 15, 2002 (or,
if such day is not a Business Day, the next succeeding Business Day
thereafter).
CLASS A-4 INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Class A-4 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-4 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-4 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-4 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
CLASS A-4 INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-4 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-4 Interest Carryover
Shortfall for such Distribution Date.
CLASS A-4 INTEREST RATE: 6.625% per annum.
CLASS A-4 MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to
but excluding April 15, 1997) at the Class A-4 Interest Rate on the
outstanding principal balance of the Class A-4 Notes on the immediately
preceding Distribution Date (or, in the case of the first Distribution Date,
on the Closing Date), after giving effect to all payments of principal to
Class A-4 Noteholders on or prior to such immediately preceding Distribution
Date.
CLASS A-4 PREPAYMENT AMOUNT: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect
to any transfer of Subsequent Receivables on such date, an amount equal to
the Class A-4 Noteholders' pro rata share (based on the respective current
outstanding principal balance of each class of Notes and the current
Certificate Balance) of the Pre-Funded Amount as of such Distribution Date.
CLASS A-4 PREPAYMENT PREMIUM: An amount computed by the Servicer equal
to the excess, if any, discounted as described below, of (i) the amount of
interest that would accrue on the Class A-4 Prepayment Amount at the Class A-4
Interest Rate during the period commencing on and including the Distribution
Date
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on which the Class A-4 Prepayment Amount is required to be deposited in the
Note Distribution Account pursuant to Section 4.7 to but excluding February
29, 2000, over (ii) the amount of interest that would have accrued on the
Class A-4 Prepayment Amount over the same period at a per annum rate of
interest equal to the yield to maturity on the Determination Date preceding
such Distribution Date on the 5.875% U.S. Treasury Note due February 29,
2000. Such excess shall be discounted to present value to such Distribution
Date at the yield described in clause (ii) above.
CLASS A-5 FINAL SCHEDULED DISTRIBUTION DATE: February 15, 2005 (or,
if such day is not a Business Day, the next succeeding Business Day
thereafter).
CLASS A-5 INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Class A-5 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-5 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-5 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-5 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
CLASS A-5 INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-5 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-5 Interest Carryover
Shortfall for such Distribution Date.
CLASS A-5 INTEREST RATE: 6.80% per annum.
CLASS A-5 MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to
but excluding April 15, 1997) at the Class A-5 Interest Rate on the
outstanding principal balance of the Class A-5 Notes on the immediately
preceding Distribution Date (or, in the case of the first Distribution Date,
on the Closing Date), after giving effect to all payments of principal to
Class A-5 Noteholders on or prior to such immediately preceding Distribution
Date.
CLASS A-5 PREPAYMENT AMOUNT: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect
to any transfer of Subsequent Receivables on such date, an amount equal to
the Class A-5 Noteholders' pro rata share (based on the respective current
outstanding principal balance of each class of Notes and the current
Certificate Balance) of the Pre-Funded Amount as of such Distribution Date.
CLASS A-5 PREPAYMENT PREMIUM: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount
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of interest that would accrue on the Class A-5 Prepayment Amount at the Class
A-5 Interest Rate during the period commencing on and including the
Distribution Date on which the Class A-5 Prepayment Amount is required to be
deposited in the Note Distribution Account pursuant to Section 4.7 to but
excluding June 30, 2001, over (ii) the amount of interest that would have
accrued on the Class A-5 Prepayment Amount over the same period at a per
annum rate of interest equal to the yield to maturity on the Determination
Date preceding such Distribution Date on the 6.625% U.S. Treasury Note due
June 30, 2001. Such excess shall be discounted to present value to such
Distribution Date at the yield described in clause (ii) above.
CLOSING DATE: March 20, 1997.
CLOSING DATE PURCHASE AGREEMENT: The Receivables Purchase Agreement
and Assignment, dated as of March 1, 1997, between OFL and the Seller.
COLLATERAL AGENT: The Collateral Agent named in the Spread Account
Agreement, and any successor thereto pursuant to the terms of the Spread Account
Agreement.
COLLATERAL INSURANCE: The insurance policy maintained by the Servicer,
or indemnification obligation of the Servicer in lieu of such insurance policy,
pursuant to Section 3.4(e).
COLLECTED FUNDS: With respect to any Determination Date, the amount of
funds in the Collection Account representing collections on the Receivables
during the related Monthly Period, including all Liquidation Proceeds collected
during the related Monthly Period (but excluding any Monthly Advances and any
Purchase Amounts).
COLLECTION ACCOUNT: The account designated as the Collection Account
in, and which is established and maintained pursuant to, Section 4.1(a).
COLLECTION RECORDS: All manually prepared or computer generated
records relating to collection efforts or payment histories with respect to the
Receivables.
COMPUTER TAPE: The computer tape generated on behalf of the Seller
which provides information relating to the Receivables and which was used by the
Seller and OFL in selecting the Receivables conveyed to the Trust hereunder.
CORPORATE TRUST OFFICE: With respect to the Owner Trustee, the
principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office at the Closing
Date is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇; the telecopy number for the
Corporate Trust Office of the Owner Trustee on the date of the execution of
this Agreement is (▇▇▇) ▇▇▇-▇▇▇▇; with respect
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to the Indenture Trustee, the principal office of the Indenture Trustee at
which at any particular time its corporate trust business shall be
administered, which office is located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Services--Asset
Backed Administration; the telecopy number for the Corporate Trust Office of
the Indenture Trustee on the date of execution of this Agreement is
(▇▇▇) ▇▇▇-▇▇▇▇.
CRAM DOWN LOSS: With respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on a Receivable or otherwise modifying or restructuring
the Scheduled Payments to be made on a Receivable, an amount equal to the excess
of the Principal Balance of such Receivable immediately prior to such order over
the Principal Balance of such Receivable as so reduced or the net present value
(using as the discount rate the higher of the contract rate or the rate of
interest, if any, specified by the court in such order) of the Scheduled
Payments as so modified or restructured. A "Cram Down Loss" shall be deemed to
have occurred on the date of issuance of such order.
CREDIT ENHANCEMENT FEE: With respect to any Distribution Date, the
amount to be paid to the Security Insurer pursuant to Section 4.6(viii) and the
amount to which the Seller is entitled pursuant to Section 4.6(ix).
CUSTODIAN: OFL and any other Person named from time to time as
custodian in any Custodian Agreement acting as agent for the Trust, which Person
must be (so long as an Insurer Default shall not have occurred and be
continuing) acceptable to the Security Insurer.
CUSTODIAN AGREEMENT: Any Custodian Agreement from time to time in
effect between the Custodian named therein and the Trust, substantially in the
form of Exhibit B hereto, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof, which Custodian
Agreement and any amendments, supplements or modifications thereto shall (so
long as an Insurer Default shall not have occurred and be continuing) be
acceptable to the Security Insurer.
DEALER: A seller of new or used automobiles or light trucks that
originated one or more of the Receivables and sold the respective Receivable,
directly or indirectly, to OFL under an existing agreement between such seller
and OFL.
DEALER AGREEMENT: An agreement between OFL and a Dealer relating to
the sale of retail installment sale contracts and installment notes to OFL and
all documents and instruments relating thereto.
DEALER ASSIGNMENT: With respect to a Receivable, the executed
assignment executed by a Dealer conveying such Receivable to OFL.
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DEFICIENCY CLAIM AMOUNT: As defined in Section 5.2(a).
DEFICIENCY CLAIM DATE: With respect to any Distribution Date, the
fourth Business Day immediately preceding such Distribution Date.
DEFICIENCY NOTICE: As defined in Section 5.2(a).
DEPOSIT DATE: With respect to any Monthly Period, the Business Day
immediately preceding the related Determination Date.
DETERMINATION DATE: With respect to any Monthly Period, the sixth
Business Day immediately preceding the related Distribution Date.
DISTRIBUTION AMOUNT: With respect to a Distribution Date, the sum of
(i) the Actual Funds for such Distribution Date, and (ii) the Deficiency Claim
Amount, if any, received by the Indenture Trustee with respect to such
Distribution Date.
DISTRIBUTION DATE: The 15th day of each calendar month, or if such
15th day is not a Business Day, the next succeeding Business Day, commencing
April 15, 1997 to and including the Final Scheduled Distribution Date.
DRAW DATE: With respect to any Distribution Date, the third Business
Day immediately preceding such Distribution Date.
ELECTRONIC LEDGER: The electronic master record of the retail
installment sales contracts or installment loans of OFL.
ELIGIBLE ACCOUNT: (i) A segregated trust account that is maintained
with the corporate trust department of a depository institution acceptable to
the Security Insurer (so long as an Insurer Default shall not have occurred
and be continuing), or (ii) a segregated direct deposit account maintained
with a depository institution or trust company organized under the laws of
the United States of America, or any of the States thereof, or the District
of Columbia, having a certificate of deposit, short term deposit or
commercial paper rating of at least "A-1+" by Standard & Poor's and "P-1" by
Moody's and (so long as an Insurer Default shall not have occurred and be
continuing) acceptable to the Security Insurer.
ELIGIBLE INVESTMENTS: Any one or more of the following types of
investments:
(a) (i) direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality of the United States, the
obligations of which are backed by the full faith and credit of the United
States; and (ii) direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely
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payment of principal and interest by, the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation, but only if, at
the time of investment, such obligations are assigned the highest credit
rating by each Rating Agency;
(b) demand or time deposits in, certificates of deposit of, or
bankers' acceptances issued by any depository institution or trust company
organized under the laws of the United States or any State and subject to
supervision and examination by federal and/or State banking authorities
(including, if applicable, the Indenture Trustee, the Owner Trustee or any agent
of either of them acting in their respective commercial capacities); provided
that the short-term unsecured debt obligations of such depository institution or
trust company at the time of such investment, or contractual commitment
providing for such investment, are assigned the highest credit rating by each
Rating Agency;
(c) repurchase obligations pursuant to a written agreement (i) with
respect to any obligation described in clause (a) above, where the Indenture
Trustee has taken actual or constructive delivery of such obligation in
accordance with Section 4.1, and (ii) entered into with the corporate trust
department of a depository institution or trust company organized under the laws
of the United States or any State thereof, the deposits of which are insured by
the Federal Deposit Insurance Corporation and the short-term unsecured debt
obligations of which are rated "A-1+" by Standard & Poor's and "P-1" by Moody's
(including, if applicable, the Indenture Trustee, the Owner Trustee or any agent
of either of them acting in their respective commercial capacities);
(d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any State whose
long-term unsecured debt obligations are assigned the highest credit rating by
each Rating Agency at the time of such investment or contractual commitment
providing for such investment; PROVIDED, HOWEVER, that securities issued by any
particular corporation will not be Eligible Investments to the extent that an
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held in the Trust Accounts to exceed
10% of the Eligible Investments held in the Trust Accounts (with Eligible
Investments held in the Trust Accounts valued at par);
(e) commercial paper that (i) is payable in United States dollars and
(ii) is rated in the highest credit rating category by each Rating Agency;
(f) units of money market funds rated in the highest credit rating
category by each Rating Agency; provided that all Eligible Investments shall be
held in the name of the Indenture Trustee; or
(g) any other demand or time deposit, obligation, security or
investment as may be acceptable to the Rating Agencies and the Security
Insurer, as
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evidenced by the prior written consent of the Security Insurer, as may from
time to time be confirmed in writing to the Indenture Trustee by the Security
Insurer;
PROVIDED, HOWEVER, that securities issued by any entity (except as provided in
paragraph (a)) will not be Eligible Investments to the extent that an investment
therein will cause the then outstanding principal amount of securities issued by
such entity and held in the Pre-Funding Account to exceed $25 million (with
Eligible Investments held in the Pre-Funding Account valued at par).
Eligible Investments may be purchased by or through the Indenture Trustee or any
of its Affiliates.
ELIGIBLE SERVICER: OFL, the Backup Servicer or another Person which
at the time of its appointment as Servicer (i) is servicing a portfolio of
motor vehicle retail installment sales contracts and/or motor vehicle
installment loans, (ii) is legally qualified and has the capacity to service
the Receivables, (iii) has demonstrated the ability professionally and
competently to service a portfolio of motor vehicle retail installment sales
contracts and/or motor vehicle installment loans similar to the Receivables
with reasonable skill and care, and (iv) is qualified and entitled to use,
pursuant to a license or other written agreement, and agrees to maintain the
confidentiality of, the software which the Servicer uses in connection with
performing its duties and responsibilities under this Agreement or otherwise
has available software which is adequate to perform its duties and
responsibilities under this Agreement.
FINAL SCHEDULED DISTRIBUTION DATE: With respect to each class of
Notes, the Class A-1 Final Scheduled Distribution Date, the Class A-2 Final
Scheduled Distribution Date, the Class A-3 Final Scheduled Distribution Date,
the Class A-4 Final Scheduled Distribution Date and the Class A-5 Final
Scheduled Distribution Date, respectively, and, with respect to the
Certificates, February 15, 2005.
FINANCED VEHICLE: A new or used automobile or light truck, together
with all accessories thereto, securing or purporting to secure an Obligor's
indebtedness under a Receivable.
FORCE-PLACED INSURANCE: The meaning set forth in Section 3.4(b).
FUNDING PERIOD: The period beginning on the Closing Date and ending
on the first to occur of (a) the Distribution Date on which the Pre-Funded
Amount (after giving effect to any reduction in the Pre-Funded Amount in
connection with the transfer of Subsequent Receivables to the Trust on such
Distribution Date) is less than $100,000, (b) the date on which an Event of
Default or a Servicer Termination Event occurs, (c) the date on which an
Insolvency Event occurs with respect to OFL and (d) the close of business on
the Distribution Date occurring in May, 1997.
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GENERAL PARTNERS: OGP I and OGP II in their capacities as general
partners of the Trust, and any successors thereto as permitted by the Trust
Agreement.
GUARANTEED DISTRIBUTION: The meaning specified in the Certificate
Policy.
INDENTURE: The Indenture, dated as of March 1, 1997, among the
Trust, the Indenture Trustee and the Indenture Collateral Agent, as the same
may be amended and supplemented from time to time.
INDENTURE COLLATERAL AGENT: The Person acting as Indenture Collateral
Agent under the Indenture, its successors in interest and any successor
Indenture Collateral Agent under the Indenture.
INDENTURE TRUSTEE: The Person acting as Trustee under the Indenture,
its successors in interest and any successor Trustee under the Indenture.
INDEPENDENT ACCOUNTANTS: As defined in Section 3.11(a).
INITIAL CUTOFF DATE: March 13, 1997.
INITIAL CUTOFF DATE PRINCIPAL BALANCE: $579,603,873.57
INITIAL RECEIVABLES: The Receivables listed on the Schedule of Initial
Receivables on the Closing Date.
INSOLVENCY EVENT: With respect to a specified Person, (a) the
commencement of an involuntary case against such Person under the federal
bankruptcy laws, as now or hereinafter in effect, or another present or
future federal or state bankruptcy, insolvency or similar law, and such case
is not dismissed within 60 days; or (b) the filing of a decree or entry of an
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; or (c) 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
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its debts as such debts become due, or the taking of action by such Person in
furtherance of any of the foregoing.
INSURANCE ADD-ON AMOUNT: The premium charged to the Obligor in the
event that the Servicer obtains Force-Placed Insurance pursuant to Section 3.4.
INSURANCE AGREEMENT: The Insurance and Indemnity Agreement, dated as
of March 20, 1997, among the Security Insurer, the Trust, the Seller, OFL and
the General Partners.
INSURANCE AGREEMENT EVENT OF DEFAULT: An "Event of Default" as
defined in the Insurance Agreement.
INSURANCE POLICY: With respect to a Receivable, any insurance policy
benefiting the holder of the Receivable providing loss or physical damage,
credit life, credit disability, theft, mechanical breakdown or similar
coverage with respect to the Financed Vehicle or the Obligor.
INSURER DEFAULT: The occurrence and continuance of any of the
following:
(a) the Security Insurer shall have failed to make a payment
required under the Note Policy or the Certificate Policy;
(b) The Security Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
United States Bankruptcy Code, the New York State Insurance Law, or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, (ii) made a general
assignment for the benefit of its creditors, or (iii) had an order for
relief entered against it under the United States Bankruptcy Code, the New
York State Insurance Law, or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent or receiver for the Security Insurer or for all
or any material portion of its property or (ii) authorizing the taking of
possession by a custodian, trustee, agent or receiver of the Security
Insurer (or the taking of possession of all or any material portion of the
property of the Security Insurer).
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LIEN: Any security interest, lien, charge, pledge, preference, equity
or encumbrance of any kind, including tax liens, mechanics' liens and any liens
that attach by operation of law.
LIEN CERTIFICATE: With respect to a Financed Vehicle, an original
certificate of title, certificate of lien or other notification issued by the
Registrar of Titles of the applicable state to a secured party which indicates
that the lien of the secured party on the Financed Vehicle is recorded on the
original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification issued to a secured
party.
LIQUIDATED RECEIVABLE: With respect to any Monthly Period, a
Receivable as to which (i) 91 days have elapsed since the Servicer
repossessed the related Financed Vehicle, (ii) the Servicer has determined in
good faith that all amounts it expects to recover have been received, or
(iii) all or any portion of a Scheduled Payment shall have become more than
180 days past due.
LIQUIDATION PROCEEDS: With respect to a Liquidated Receivable, all
amounts realized with respect to such Receivable (other than amounts
withdrawn from the Spread Account or the Reserve Account and drawings under
the Policies) net of (i) reasonable expenses incurred by the Servicer in
connection with the collection of such Receivable and the repossession and
disposition of the Financed Vehicle and (ii) amounts that are required to be
refunded to the Obligor on such Receivable; PROVIDED, HOWEVER, that the
Liquidation Proceeds with respect to any Receivable shall in no event be less
than zero.
LOCKBOX ACCOUNT: The segregated account maintained on behalf of the
Trust by the Lockbox Bank in accordance with Section 3.2(d).
LOCKBOX AGREEMENT: The Agency Agreement, dated as of November 13,
1992 by and among ▇▇▇▇▇▇ Trust and Savings Bank, OFL, Shawmut Bank, N.A., as
Trustee, Saturn Financial Services, Inc. and the Program Parties (as defined
therein), taken together with the Retail Lockbox Agreement, dated as of
November 13, 1992, among such parties, and the Counterpart to Agency
Agreement and Retail Lockbox Agreement, dated as of March 20, 1997, among
▇▇▇▇▇▇ Trust and Savings Bank, OFL, the Trust, the Indenture Trustee and the
Security Insurer, as such agreements may be amended from time to time, unless
the Indenture Trustee hereunder shall cease to be a Program Party thereunder,
or such agreement shall be terminated in accordance with its terms, in which
event "Lockbox Agreement" shall mean such other agreement, in form and
substance acceptable to the Security Insurer, or if an Insurer Default shall
have occurred and be continuing, to a Certificate Majority and a Note
Majority, among the Servicer, the Trust, the Indenture Trustee and the
Lockbox Bank.
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LOCKBOX BANK: A depository institution named by the Servicer and, so
long as an Insurer Default shall not have occurred and be continuing, acceptable
to the Security Insurer, or, if an Insurer Default shall have occurred and be
continuing, to a Certificate Majority and a Note Majority.
MONTHLY ADVANCE: The amount that the Servicer is required to advance
on any Receivable pursuant to Section 4.4(a).
MONTHLY PERIOD: With respect to a Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs (such calendar
month being referred to as the "related" Monthly Period with respect to such
Distribution Date). With respect to an Accounting Date, the calendar month in
which such Accounting Date occurs is referred to herein as the "related" Monthly
Period to such Accounting Date.
MONTHLY RECORDS: All records and data maintained by the Servicer with
respect to the Receivables, including the following with respect to each
Receivable: the account number; the identity of the originating Dealer; Obligor
name; Obligor address; Obligor home phone number; Obligor business phone number;
original Principal Balance; original term; Annual Percentage Rate; current
Principal Balance; current remaining term; origination date; first payment date;
final scheduled payment date; next payment due date; date of most recent
payment; new/used classification; collateral description; days currently
delinquent; number of contract extensions (months) to date; amount, if any, of
Force-Placed Insurance payable monthly; amount of the Scheduled Payment; current
Insurance Policy expiration date; and past due late charges, if any.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
NOTE DISTRIBUTION ACCOUNT: The account designated as such, established
and maintained pursuant to Section 4.1(c).
NOTE MAJORITY: As to each class of Notes, Holders of Notes
representing a majority of the outstanding principal balance of such class of
Notes.
NOTE POLICY: The financial guaranty insurance policy issued by the
Security Insurer to the Indenture Trustee on behalf of the Noteholders.
NOTE POOL FACTOR: With respect to any Distribution Date and each class
of Notes, an eight-digit decimal figure equal to the outstanding principal
balance of such class of Notes as of such Distribution Date (after giving effect
to all distributions on such date) divided by the original outstanding principal
balance of such class of Notes as of the Closing Date.
NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-1 Interest Distributable Amount, the
Class
-▇▇-
▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the Class A-3 Interest Distributable
Amount, the Class A-4 Interest Distributable Amount and the Class A-5
Interest Distributable Amount.
NOTEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT: With respect to
any Distribution Date, the Noteholders' Percentage of the Principal Distribution
Amount. With respect to the Distribution Date on which the outstanding
principal balance of the Class A-1 Notes is reduced to zero, the "Noteholders'
Monthly Principal Distributable Amount" shall equal the sum of (i) the
outstanding principal balance of the Class A-1 Notes plus (ii) the Noteholders'
Percentage (after giving effect to the retirement of the Class A-1 Notes) of the
Principal Distribution Amount less the outstanding principal balance of the
Class A-1 Notes immediately prior to such Distribution Date.
NOTEHOLDERS' PERCENTAGE: (i) with respect to any Determination Date
relating to a Distribution Date prior to the Distribution Date on which the
principal balance of the Class A-1 Notes is reduced to zero, 100%, (ii) with
respect to the Determination Date relating to the Distribution Date on which
the principal balance of the Class A-1 Notes is reduced to zero, 100% with
respect to that portion of the Principal Distribution Amount equal to the
unpaid principal balance of the Class A-1 Notes, and with respect to the
remaining portion of the Principal Distribution Amount, a percentage,
expressed as a fraction, the numerator of which is the aggregate initial
principal balance of the Class A-2, Class A-3, Class A-4 and Class A-5 Notes
and the denominator of which is the Aggregate Principal Balance (plus any
remaining Pre-Funded Amount) as of the related Accounting Date for the
preceding Distribution Date, minus that portion of the Principal Distribution
Amount applied to retire the Class A-1 Notes, (iii) with respect to any
Determination Date relating to a Distribution Date thereafter to and
including the Distribution Date (if any) on which the aggregate principal
balance of the Notes is reduced to zero, a percentage, expressed as a
fraction computed by the Servicer, the numerator of which is the outstanding
principal balance of the Notes on the related Determination Date and the
denominator of which is the Aggregate Principal Balance (plus any remaining
Pre-Funded Amount) as of the related Accounting Date for the preceding
Distribution Date, and (iv) with respect to any Determination Date relating to
a Distribution Date thereafter (if any), zero.
NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL: As of the close of
business on any Distribution Date, the excess of the sum of the Noteholders'
Monthly Principal Distributable Amount and any outstanding Noteholders'
Principal Carryover Shortfall from the immediately preceding Distribution Date
over the amount in respect of principal that is actually deposited in the Note
Distribution Account on such immediately preceding Distribution Date.
NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date (other than the Final Scheduled Distribution Date with respect
to any class of Notes), the sum of the Noteholders' Monthly Principal
Distributable
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Amount for such Distribution Date and any Noteholders' Principal Carryover
Shortfall as of the close of the preceding Distribution Date. The
Noteholders' Principal Distributable Amount on the Final Scheduled
Distribution Date for any class of Notes will equal the sum of (i) the
Noteholders' Monthly Principal Distributable Amount for such Distribution
Date, (ii) the Noteholders' Principal Carryover Shortfall as of the close of
the preceding Distribution Date, and (iii) the excess of the outstanding
principal balance of such class of Notes, if any, over the amounts in clauses
(i) and (ii). In no event may the Noteholders' Principal Distributable
Amount for any Distribution Date exceed the outstanding principal balance of
the Notes immediately prior to such Distribution Date.
NOTES: The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes and the Class A-5 Notes.
NOTICE OF DEFICIENCY: A written or telecopied notice from the Owner
Trustee to the Security Insurer, substantially in the form of Exhibit A to the
Certificate Policy.
OBLIGOR: The purchaser or the co-purchasers of the Financed Vehicle
and any other Person or Persons who are primarily or secondarily obligated to
make payments under a Receivable.
OFL: Olympic Financial Ltd., a Minnesota corporation.
OGP I: Olympic First GP Inc., a Delaware corporation.
OGP II: Olympic Second GP Inc., a Delaware corporation.
OPINION OF COUNSEL: A written opinion of counsel acceptable in form
and substance and from counsel acceptable to the Owner Trustee and, if such
opinion or a copy thereof is required to be delivered to the Indenture Trustee
or the Security Insurer, to the Indenture Trustee or the Security Insurer, as
applicable.
ORIGINAL POOL BALANCE: As of any date, the sum of the Initial Cutoff
Date Principal Balance plus the aggregate Principal Balance (as of the related
Subsequent Cutoff Date) of all Subsequent Receivables sold to the Trust on any
Subsequent Transfer Date.
OUTSTANDING MONTHLY ADVANCES: With respect to a Receivable and a
Determination Date, the sum of all Monthly Advances made on any Determination
Date prior to such Determination Date relating to that Receivable which have not
been reimbursed pursuant to Section 4.6(i) or Section 4.8.
OWNER TRUSTEE: Mellon Bank (DE), National Association, acting not
individually but solely as trustee, or its successor in interest, and any
successor Owner Trustee appointed as provided in the Trust Agreement.
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PERSON: Any legal person, including any individual, corporation,
partnership, joint venture, estate, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or any other entity.
POLICIES: The Certificate Policy and the Note Policy.
POLICY CLAIM AMOUNT: The meaning specified in Section 5.3(a).
PRE-FUNDED AMOUNT: As of any date, $195,396,126.43 minus the aggregate
Principal Balance (as of the related Subsequent Cutoff Date) of all Subsequent
Receivables sold to the Trust on or prior to such date.
PRE-FUNDING ACCOUNT: The account designated as the Pre-Funding Account
in, and which is established and maintained pursuant to, Section 4.1(b).
PREFERENCE CLAIM: The meaning specified in Section 5.4(b).
PRINCIPAL BALANCE: With respect to any Receivable, as of any date, the
Amount Financed minus (i) that portion of all amounts received on or prior to
such date and allocable to principal in accordance with the terms of the
Receivable, and (ii) any Cram Down Loss in respect of such Receivable.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date,
the amount equal to the sum of the following amounts with respect to the related
Monthly Period, in each case computed with respect to each Receivable in
accordance with the method specified in the related retail installment sale
contract or promissory note: (i) that portion of all collections on Receivables
(other than Liquidated Receivables and Purchased Receivables) allocable to
principal, including all full and partial principal prepayments, (ii) the
Principal Balance (as of the related Accounting Date) of all Receivables that
became Liquidated Receivables during the related Monthly Period (other than
Purchased Receivables), (iii) the Principal Balance of all Receivables that
became Purchased Receivables as of the related Accounting Date, and, in the sole
discretion of the Security Insurer, provided no Insurer Default shall have
occurred and be continuing, the Principal Balance as of the related Accounting
Date of all Receivables that were required to be purchased as of the related
Accounting Date but were not so purchased, and (iv) the aggregate amount of Cram
Down Losses that shall have occurred during the related Monthly Period.
PURCHASE AGREEMENTS: (i) The Closing Date Purchase Agreement and
(ii) one or more Assignment Agreements pursuant to the ARCC Purchase Agreement,
pursuant to which, together, OFL transferred the Initial Receivables to the
Seller.
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: With respect to a Receivable, the Principal Balance
and all accrued and unpaid interest on the Receivable (without regard to any
Monthly Advances that may have been made with respect to the Receivable) as of
the Accounting Date on which the obligation to purchase such Receivable arises.
PURCHASED RECEIVABLE: As of any Accounting Date, any Receivable
(including any Liquidated Receivable) that became a Warranty Receivable or
Administrative Receivable as of such Accounting Date (or which OFL or the
Servicer has elected to purchase as of an earlier Accounting Date, as permitted
by Section 2.6 or 3.7), and as to which the Purchase Amount has been deposited
in the Collection Account by the Seller, OFL or the Servicer, as applicable, on
or before the related Deposit Date.
RATING AGENCY: Each of Moody's and Standard & Poor's, so long as such
Persons maintain a rating on the Certificates and the Notes; and if either
Moody's or Standard & Poor's no longer maintains a rating on the Certificates or
the Notes, such other nationally recognized statistical rating organization
selected by the Seller and (so long as an Insurer Default shall not have
occurred and be continuing) acceptable to the Security Insurer.
RATING AGENCY CONDITION: With respect to any action, that each Rating
Agency shall have been given 10 days' prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer, the Security
Insurer, 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 or the Certificates.
RECEIVABLE: A retail installment sale contract or promissory note
(and related security agreement) for a new or used automobile or light truck
(and all accessories thereto) that is included in the Schedule of
Receivables, and all rights and obligations under such a contract, but not
including (i) any Liquidated Receivable (other than for purposes of
calculating Certificateholders' Distributable Amounts and Noteholders'
Distributable Amounts hereunder and for the purpose of determining the
obligations pursuant to Section 2.6 and 3.7 to purchase Receivables), or (ii)
any Purchased Receivable on or after the Accounting Date immediately
preceding the Deposit Date on which payment of the Purchase Amount is made in
connection therewith pursuant to Section 4.5.
RECEIVABLE FILE: The documents, electronic entries, instruments and
writings listed in Section 2.2 pertaining to a particular Receivable.
REGISTRAR OF TITLES: With respect to any state, the governmental
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, motor vehicles and liens thereon.
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RELATED DOCUMENTS: The Trust Agreement, the Indenture, the
Certificates, the Notes, the Purchase Agreements, each Subsequent Purchase
Agreement, each Subsequent Transfer Agreement, the Custodian Agreement, the
Policies, the Spread Account Agreement, the Insurance Agreement, the Lockbox
Agreement, the Depository Agreements, the Stock Pledge Agreement and the
Underwriting Agreement between the Seller and OFL and the underwriter of the
Certificates and the Notes. The Related Documents executed by any party are
referred to herein as "such party's Related Documents," "its Related Documents"
or by a similar expression.
REPURCHASE EVENTS: The occurrence of a breach of any of OFL's, the
Seller's or the Servicer's representations and warranties in this Agreement or
in the Purchase Agreement or in any Subsequent Purchase Agreement which requires
the repurchase of a Receivable by OFL or the Seller pursuant to Section 2.6 or
by the Servicer pursuant to Section 3.7.
REQUIRED DEPOSIT RATING: A rating on short-term unsecured debt
obligations of "P-1" by Moody's and at least "A-1+" by Standard & Poor's (or
such other rating as may be acceptable to the Rating Agencies and, so long as
an Insurer Default shall not have occurred and be continuing, the Security
Insurer) so as to not affect the rating on the Certificates or the Notes.
REQUISITE RESERVE AMOUNT: As of the Closing Date, $1,166,007.36 and as
of any Distribution Date or Subsequent Transfer Date thereafter during the
Funding Period an amount equal to the difference between
(a) the product of (x) the weighted average of the Class A-1
Interest Rate, the Class A-2 Interest Rate, the Class A-3 Interest Rate,
the Class A-4 Interest Rate, the Class A-5 Interest Rate, and the
Pass-Through Rate (based on the outstanding principal balance of the Class
A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes,
the Class A-5 Notes and the Certificate Balance on such date), divided by
360, (y) the Pre-Funded Amount on such date and (z) the number of days until
the Distribution Date in May, 1997, and
(b) the product of (x) the Assumed Reinvestment Rate, divided by
360, (y) the Pre-Funded Amount on such date and (z) the number of days until
the Distribution Date in May, 1997.
The Requisite Reserve Amount for any Subsequent Transfer Date (i) shall be
calculated after taking into account the transfer of Subsequent Receivables
to the Trust on such Subsequent Transfer Date (unless such Subsequent
Transfer Date does not coincide with a Distribution Date and does not occur
between a Distribution Date and the related Determination Date) and (ii) (A)
if such Subsequent Transfer Date does not coincide with a Distribution Date
but occurs between a Distribution Date and the related Determination Date,
shall be calculated as of the Distribution
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Date immediately following such Subsequent Transfer Date as if such
Subsequent Transfer Date occurred on such Distribution Date, (B) if such
Subsequent Transfer Date coincides with a Distribution Date, shall be
calculated as of such Distribution Date or (C) if such Subsequent Transfer
Date does not coincide with a Distribution Date and does not occur between a
Distribution Date and the related Determination Date, shall be calculated as
of the immediately preceding Distribution Date (or as of the Closing Date, if
such Subsequent Transfer Date occurs before the Determination Date in April
1997) as if such Subsequent Transfer Date occurred on such immediately
preceding Distribution Date (or the Closing Date).
RESERVE ACCOUNT: The account designated as the Reserve Account in, and
which is established and maintained pursuant to, Section 4.1(d), including the
Class A-1 Holdback Subaccount.
RESERVE AMOUNT: As of any date of determination, the amount on
deposit in the Reserve Account (other than the amount on deposit in the Class
A-1 Holdback Subaccount) on such date.
RESPONSIBLE OFFICER: When used with respect to the Owner Trustee,
any officer of the Owner Trustee assigned by the Owner Trustee to administer
its corporate trust affairs relating to the Trust. When used with respect to
any other Person that is not an individual, the President, any Vice-President
or Assistant Vice-President or the Controller of such Person, or any other
officer or employee having similar functions.
SCHEDULE OF INITIAL RECEIVABLES: The schedule of all retail
installment sales contracts and promissory notes sold and transferred to the
Trust pursuant to this Agreement which is attached hereto as Schedule A.
SCHEDULE OF RECEIVABLES: The Schedule of Initial Receivables attached
hereto as Schedule A as supplemented by each Schedule of Subsequent Receivables
attached as Schedule A to each Subsequent Transfer Agreement.
SCHEDULE OF REPRESENTATIONS: The Schedule of Representations and
Warranties attached hereto as Schedule B.
SCHEDULE OF SUBSEQUENT RECEIVABLES: The schedule of all retail
installment sales contracts and promissory notes sold and transferred to the
Trust pursuant to a Subsequent Transfer Agreement which is attached as Schedule
A to such Subsequent Transfer Agreement, which Schedule of Subsequent
Receivables shall supplement the Schedule of Initial Receivables.
SCHEDULED PAYMENT: With respect to any Monthly Period for any
Receivable, the amount set forth in such Receivable as required to be paid by
the Obligor in such Monthly Period. If after the Closing Date, the Obligor's
obligation under a Receivable with respect to a Monthly Period has been modified
so as to
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differ from the amount specified in such Receivable as a result of (i) the order
of a court in an insolvency proceeding involving the Obligor, (ii) pursuant to
the Soldiers' and Sailors' Civil Relief Act of 1940 or (iii) modifications or
extensions of the Receivable permitted by Section 3.2(b), the Scheduled Payment
with respect to such Monthly Period shall refer to the Obligor's payment
obligation with respect to such Monthly Period as so modified.
SECURITY INSURER: Financial Security Assurance Inc., a monoline
insurance company incorporated under the laws of the State of New York, or any
successor thereto, as issuer of the Policies.
SELLER: Olympic Receivables Finance Corp., a Delaware corporation, or
its successor in interest pursuant to Section 6.2.
SERVICER: Olympic Financial Ltd., its successor in interest pursuant
to Section 8.2 or, after any termination of the Servicer upon a Servicer
Termination Event, the Backup Servicer or any other successor Servicer.
SERVICER EXTENSION NOTICE: The notice delivered pursuant to
Section 3.14.
SERVICER TERMINATION EVENT: An event described in Section 8.1.
SERVICER'S CERTIFICATE: With respect to each Determination Date, a
certificate, completed by and executed on behalf of the Servicer, in accordance
with Section 3.9, substantially in the form attached hereto as Exhibit E.
SPREAD ACCOUNT: The Spread Account established and maintained pursuant
to the Spread Account Agreement.
SPREAD ACCOUNT ADDITIONAL DEPOSIT: With respect to any transfer of
Subsequent Receivables to the Trust pursuant to Section 2.4, the amount required
to be deposited in the Spread Account pursuant to the terms of the Spread
Account Agreement.
SPREAD ACCOUNT AGREEMENT: The Spread Account Agreement, dated as of
March 25, 1993, as amended and restated as of March1, 1997, among the Seller,
OFL, the Security Insurer, the Collateral Agent and the trustees specified
therein, as the same may be amended, supplemented or otherwise modified in
accordance with the terms thereof.
STANDARD & POOR'S: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
STOCK PLEDGE AGREEMENT: The Stock Pledge Agreement, dated as of March
25, 1993, as amended and restated as of December 3, 1996, among the Security
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Insurer, OFL and the Collateral Agent, as the same may be amended from time to
time.
SUBCOLLECTION ACCOUNT: The account designated as the Subcollection
Account in, and which is established and maintained pursuant to Section 4.2(a).
SUBSEQUENT CUTOFF DATE: With respect to any Subsequent Receivables,
the date specified in the related Subsequent Transfer Agreement, which may in no
event be later than the Subsequent Transfer Date.
SUBSEQUENT PURCHASE AGREEMENT: With respect to any Subsequent
Receivables, either (i) the agreement between OFL and the Seller pursuant to
which OFL transferred the Subsequent Receivables to the Seller, the form of
which is attached to the Purchase Agreement as Exhibit A, or (ii) one or more
Assignment Agreements pursuant to the ARCC Purchase Agreement, pursuant to
which OFL transferred the Subsequent Receivables to the Seller.
SUBSEQUENT RECEIVABLES: All Receivables sold and transferred to the
Trust pursuant to Section 2.4.
SUBSEQUENT TRANSFER AGREEMENT: With respect to any Subsequent
Receivables, the related agreement described in Section 2.4.
SUBSEQUENT TRANSFER DATE: Any date during the Funding Period on which
Subsequent Receivables are transferred to the Trust pursuant to Section 2.4.
SUPPLEMENTAL SERVICING FEE: With respect to any Monthly Period, all
administrative fees, expenses and charges paid by or on behalf of Obligors,
including late fees, collected on the Receivables during such Monthly Period.
TOTAL SERVICING FEE: The sum of the Basic Servicing Fee and the
Supplemental Servicing Fee.
TRUST: Olympic Automobile Receivables Trust, 1997-A.
TRUST ACCOUNTS: The meaning specified in 4.1(e).
TRUST AGREEMENT: The Trust Agreement dated as of March 1, 1997,
between the Seller, Olympic First GP Inc., Olympic Second GP Inc., the
Security Insurer and the Owner Trustee, as the same may be amended and
supplemented from time to time.
UCC: The Uniform Commercial Code as in effect in the relevant
jurisdiction.
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WARRANTY RECEIVABLE: With respect to any Monthly Period, a Receivable
which OFL has become obligated to repurchase pursuant to Section 2.6.
SECTION 1.2. USAGE OF TERMS. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation."
SECTION 1.3. CALCULATIONS. All calculations of the amount of
interest accrued on the Certificates and the Notes and all calculations of the
amount of the Basic Servicing Fee shall be made on the basis of a 360-day year
consisting of twelve 30-day months. All references to the Principal Balance of
a Receivable as of an Accounting Date shall refer to the close of business on
such day.
SECTION 1.4. SECTION REFERENCES. All references to Articles,
Sections, paragraphs, subsections, exhibits and schedules shall be to such
portions of this Agreement unless otherwise specified.
SECTION 1.5. NO RECOURSE. No recourse may be taken, directly or
indirectly, under this Agreement or any certificate or other writing delivered
in connection herewith or therewith, against any stockholder, officer, or
director, as such, of the Seller, OFL, the Servicer, the Indenture Trustee, the
Backup Servicer or the Owner Trustee or of any predecessor or successor of the
Seller, OFL, the Servicer, the Indenture Trustee, the Backup Servicer or the
Owner Trustee.
SECTION 1.6. MATERIAL ADVERSE EFFECT. Whenever a determination is to
be made under this Agreement as to whether a given event, action, course of
conduct or set of facts or circumstances could or would have a material adverse
effect on the Trust, the Noteholders or the Certificateholders (or any similar
or analogous determination), such determination shall be made without taking
into account the insurance provided by the Policies.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. CONVEYANCE OF INITIAL RECEIVABLES. Subject to the terms
and conditions of this Agreement, the Seller, pursuant to the mutually agreed
upon terms contained herein, hereby sells, transfers, assigns, and otherwise
conveys to the
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Trust, without recourse (but without limitation of its obligations in this
Agreement), all of the right, title and interest of the Seller in and to the
Initial Receivables, all monies at any time paid or payable thereon or in
respect thereof after the Initial Cutoff Date (including amounts due on or
before the Initial Cutoff Date but received by OFL or the Seller after the
Initial Cutoff Date), an assignment of security interests of OFL in the related
Financed Vehicles, the Insurance Policies and any proceeds from any Insurance
Policies relating to the Initial Receivables, the Obligors or the related
Financed Vehicles, including rebates of premiums, all Collateral Insurance and
any Force-Placed Insurance relating to the Initial Receivables, an assignment of
the rights of OFL or the Seller against Dealers with respect to the Initial
Receivables under the Dealer Agreements and the Dealer Assignments, all items
contained in the related Receivable Files, any and all other documents that OFL
keeps on file in accordance with its customary procedures relating to the
Initial Receivables, the Obligors or the related Financed Vehicles, an
assignment of the rights of the Seller under the Purchase Agreements, property
(including the right to receive future Liquidation Proceeds) that secures an
Initial Receivable and that has been acquired by or on behalf of the Trust
pursuant to liquidation of such Receivable, all funds on deposit from time to
time in the Trust Accounts and all investments therein and proceeds thereof, and
all proceeds of the foregoing. It is the intention of the Seller that the
transfer and assignment contemplated by this Agreement and each Subsequent
Transfer Agreement shall constitute a sale of the Receivables and other Trust
Property from the Seller to the Trust and the beneficial interest in and title
to the Receivables and the other Trust Property shall not be part of the
Seller's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. In the event that, notwithstanding
the intent of the Seller, the transfer and assignment contemplated hereby and
each Subsequent Transfer Agreement is held not to be a sale, this Agreement and
each Subsequent Transfer Agreement shall constitute a grant of a security
interest to the Trust in the property referred to in this Section 2.1 or
transferred to the Trust pursuant to the related Subsequent Transfer Agreement.
SECTION 2.2. CUSTODY OF RECEIVABLE FILES.
(a) In connection with the sale, transfer and assignment of the
Receivables and the other Trust Property to the Trust pursuant to this Agreement
and each Subsequent Transfer Agreement, and simultaneously with the execution
and delivery of this Agreement, the Trust shall enter into the Custodian
Agreement with the Custodian, dated as of the Closing Date, pursuant to which
the Owner Trustee, on behalf of the Trust, shall revocably appoint the
Custodian, and the Custodian shall accept such appointment, to act as the agent
of the Trust as Custodian of the following documents or instruments in its
possession which shall be delivered to the Custodian as agent of the Trust on or
before the Closing Date (with respect to each Initial Receivable) or the
applicable Subsequent Transfer Date (with respect to each Subsequent
Receivable):
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(i) The fully executed original of the Receivable (together
with any agreements modifying the Receivable, including without limitation
any extension agreements);
(ii) Documents evidencing or related to any Insurance Policy, or
copies thereof;
(iii) The original credit application, or a copy thereof, of each
Obligor, fully executed by each such Obligor on OFL's customary form, or on
a form approved by OFL, for such application; and
(iv) The original certificate of title (when received) and
otherwise such documents, if any, that OFL keeps on file in accordance with
its customary procedures indicating that the Financed Vehicle is owned by
the Obligor and subject to the interest of OFL as first lienholder or
secured party (including any Lien Certificate received by OFL), or, if such
original certificate of title has not yet been received, a copy of the
application therefor, showing OFL as secured party.
In connection with the grant of the security interest in the Trust
Estate to the Issuer Secured Parties pursuant to the Indenture, the Trust agrees
that from and after the Closing Date through the date of release of such
security interest pursuant to the terms of the Indenture, the Custodian shall
not be acting as agent of the Trust, but rather shall be acting as agent of the
Issuer Secured Parties.
The Indenture Trustee may act as the Custodian, in which case the
Indenture Trustee shall be deemed to have assumed the obligations of the
Custodian specified in the Custodian Agreement.
(b) Upon payment in full on any Receivable, the Servicer will notify
the Custodian by certification of an officer of the Servicer (which
certification shall include a statement to the effect that all amounts received
in connection with such payments which are required to be deposited in the
Collection Account pursuant to Section 3.1 have been so deposited) and shall
request delivery of the Receivable and Receivable File to the Servicer. From
time to time as appropriate for servicing and enforcing any Receivable, the
Custodian shall, upon written request of an officer of the Servicer and delivery
to the Custodian of a receipt signed by such officer, cause the original
Receivable and the related Receivable File to be released to the Servicer. The
Servicer's receipt of a Receivable and/or Receivable File shall obligate the
Servicer to return the original Receivable and the related Receivable File to
the Custodian when its need by the Servicer has ceased unless the Receivable
shall be repurchased as described in Section 2.6 or 3.7.
SECTION 2.3. CONDITIONS TO ACCEPTANCE BY OWNER TRUSTEE. As
conditions to Owner Trustee's execution and delivery of the Notes on behalf of
the Trust and execution, authentication and delivery of the Certificates on
behalf of the
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Trust on the Closing Date, the Owner Trustee shall have received the following
on or before the Closing Date:
(a) The Schedule of Initial Receivables certified by the
President, Controller or Treasurer of the Seller;
(b) The acknowledgement of the Custodian that it holds the
Receivable File relating to each Initial Receivable;
(c) Copies of resolutions of the Board of Directors of the
Seller approving the execution, delivery and performance of this Agreement,
the Related Documents and the transactions contemplated hereby and thereby,
certified by a Secretary or an Assistant Secretary of the Seller;
(d) Copies of resolutions of the Board of Directors of OFL
approving the execution, delivery and performance of this Agreement, the
Related Documents and the transactions contemplated hereby and thereby,
certified by a Secretary or an Assistant Secretary of OFL;
(e) Evidence that all filings (including, without limitation,
UCC filings) required to be made by any Person and actions required to be
taken or performed by any Person in any jurisdiction (other than those
actions to be taken with respect to Subsequent Receivables pursuant to
Section 2.4) to give the Owner Trustee a first priority perfected lien on,
or ownership interest in, the Receivables and the other Trust Property have
been made, taken or performed; and
(f) An executed copy of the Certificate Policy and Spread
Account Agreement and evidence of the deposit of $1,166,007.36 in the
Reserve Account.
SECTION 2.4. CONVEYANCE OF SUBSEQUENT RECEIVABLES.
(a) Subject to the conditions set forth in paragraph(b) below, the
Seller, pursuant to the mutually agreed upon terms contained herein and pursuant
to one or more Subsequent Transfer Agreements, shall sell, transfer, assign, and
otherwise convey to the Trust, without recourse (but without limitation of its
obligations in this Agreement), all of the right, title and interest of the
Seller in and to the Subsequent Receivables, all monies at any time paid or
payable thereon or in respect thereof after the related Subsequent Cutoff Date
(including amounts due on or before the related Subsequent Cutoff Date but
received by OFL or the Seller after the related Subsequent Cutoff Date), an
assignment of security interests of OFL in the related Financed Vehicles, the
Insurance Policies and any proceeds from any Insurance Policies relating to the
Subsequent Receivables, the Obligors or the related Financed Vehicles, including
rebates of premiums, all Collateral Insurance and any Force-Placed Insurance
relating to the Subsequent Receivables, rights of OFL or the
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Seller against Dealers with respect to the Subsequent Receivables under the
Dealer Agreements and the Dealer Assignments, all items contained in the
Receivable Files relating to the Subsequent Receivables, any and all other
documents that OFL keeps on file in accordance with its customary procedures
relating to the Subsequent Receivables, the Obligors or the related Financed
Vehicles, the rights of the Seller under the related Subsequent Purchase
Agreement, property (including the right to receive future Liquidation Proceeds)
that secures a Subsequent Receivable and that has been acquired by or on behalf
of the Trust pursuant to liquidation of such Subsequent Receivable, and all
proceeds of the foregoing.
(b) The Seller shall transfer to the Trust the Subsequent Receivables
and the other property and rights related thereto described in paragraph(a)
above only upon the satisfaction of each of the following conditions on or prior
to the related Subsequent Transfer Date:
(i) The Seller shall have provided the Owner Trustee, the
Indenture Trustee, the Security Insurer and the Rating Agencies with a
timely Addition Notice and shall have provided any information reasonably
requested by any of the foregoing with respect to the Subsequent
Receivables;
(ii) the Funding Period shall not have terminated;
(iii) the Security Insurer (so long as an Insurer Default shall
not have occurred and be continuing) shall in its sole and absolute
discretion have given its prior written approval of the transfer of such
Subsequent Receivables to the Trust;
(iv) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee a duly executed written assignment (including an
acceptance by the Indenture Trustee and the Owner Trustee) in substantially
the form of Exhibit G (the "Subsequent Transfer Agreement"), which shall
include a Schedule of Subsequent Receivables listing the Subsequent
Receivables and shall specify the Spread Account Additional Deposit, if
any, the Requisite Reserve Amount, and the Class A-1 Holdback Amount, if
any, as of or for such Subsequent Transfer Date;
(v) the Seller shall have delivered to the Custodian the
Receivable Files relating to the Subsequent Receivables, and the Custodian
shall have delivered to the Seller, the Owner Trustee, the Security Insurer
and the Indenture Collateral Agent an acknowledgement of receipt of such
Receivable Files;
(vi) the Seller shall, to the extent required by Section 4.1,
have deposited in the Collection Account collections in respect of the
Subsequent Receivables;
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(vii) as of each Subsequent Transfer Date, neither OFL nor the
Seller shall be insolvent nor shall either of them have been made insolvent
by such transfer nor shall either of them be aware of any pending
insolvency;
(viii) the applicable Spread Account Additional Deposit for such
Subsequent Transfer Date shall have been made pursuant to the Spread
Account Agreement.
(ix) the Reserve Amount on such Subsequent Transfer Date, after
taking into account any transfers of funds from the Reserve Account to the
General Partners in respect of the sale of the Subsequent Receivables to
the Trust, shall be no less than the Requisite Reserve Amount for such
Subsequent Transfer Date;
(x) each Rating Agency shall have notified the Seller, the
Owner Trustee, the Indenture Trustee and the Security Insurer in writing
that following such transfer the Notes and the Certificates will be rated
in the highest short-term or long-term rating category, as applicable, by
such Rating Agency;
(xi) such addition will not result in a material adverse tax
consequence to the Trust, the Noteholders or the Certificateholders as
evidenced by an Opinion of Counsel to be delivered by the Seller;
(xii) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee an Officer's Certificate confirming the satisfaction
of each condition precedent specified in this paragraph (b);
(xiii) the Seller shall have delivered to the Rating Agencies and
to the Security Insurer one or more Opinions of Counsel with respect to the
transfer of the Subsequent Receivables substantially in the form of the
Opinions of Counsel delivered to such Persons on the Closing Date;
(xiv) (A) the Receivables in the Trust, including the Subsequent
Receivables to be conveyed to the Trust on the Subsequent Transfer Date,
shall meet the following criteria (based on the characteristics of the
Initial Receivables on the Initial Cutoff Date and the Subsequent
Receivables on each related Subsequent Cutoff Date): (1) the weighted
average APR of such Receivables will not be less than 14.50%, (2) the
weighted average remaining term of such Receivables will not be greater
than 67 months nor less than 63 months, (3) not more than 85% of the
Aggregate Principal Balances of such Receivables will represent loans
secured by used Financed Vehicles, (4) not more than 50% of the Aggregate
Principal Balance of such Receivables will represent Receivables originated
under OFL's "Classic" program, (5) not more than 2% of the Aggregate
Principal Balance of such Receivables will have an APR in excess of 21%,
(6) not more than 0.25% of the Aggregate Principal
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Balance of such Receivables will represent loans in excess of $50,000.00,
(7) not more than 3.0% of the Aggregate Principal Balance of such
Receivables will represent loans with original terms greater than 72 months
and (8) not more than 5.0% of the Aggregate Principal Balance of such
Receivables will represent loans secured by Financed Vehicles that
previously secured a loan originated by OFL with an obligor other than the
current Obligor, and (B) the Trust, the Owner Trustee, the Indenture
Trustee and the Security Insurer shall have received written confirmation
from a firm of certified independent public accountants as to the
satisfaction of such criteria;
(xv) the Seller shall have taken any action necessary or, if
requested by the Security Insurer, advisable to maintain the first
perfected ownership interest of the Trust in the Trust Property and the
first perfected security interest of the Indenture Collateral Agent in the
Indenture Collateral; and
(xvi) no selection procedures adverse to the interests of the
Certificateholders or the Noteholders shall have been utilized in selecting
the Subsequent Receivables.
(c) On such Subsequent Transfer Date, if all the conditions
specified in paragraph (b) above have been satisfied, the Trust shall accept
the transfer of such Subsequent Receivables and shall pay to the Seller from
the Pre-Funding Account an amount equal to (i) the Principal Balance as of
the related Subsequent Cutoff Date of the Subsequent Receivables transferred
to the Trust as of such date, minus (ii) the Spread Account Additional
Deposit, if any, for such Subsequent Transfer Date, minus (iii) the amount,
if any, by which the Requisite Reserve Amount for such Subsequent Transfer
Date exceeds the Reserve Amount as of such Subsequent Transfer Date, and
minus (iv) the Class A-1 Holdback Amount, if any, for such Subsequent
Transfer Date.
(d) The Seller covenants to transfer to the Trust pursuant to
paragraph(a) above Subsequent Receivables with an aggregate Principal Balance
equal to $195,396,126.43; PROVIDED, HOWEVER, that the sole remedy of the Trust,
the Owner Trustee, the Indenture Trustee, the Noteholders or the
Certificateholders with respect to a failure of such covenant shall be to
enforce the provisions of Sections 2.3(c) and 6.2 of the Closing Date Purchase
Agreement, Section 2.4(c) hereof (with respect to Class A-1 Holdback Amounts)
and Section 4.7(c) hereof, Section 10.01(b) of the Indenture and Section 5.2 of
the Trust Agreement with respect to payment of the Certificate Prepayment
Premium, Class A-1 Prepayment Premium, Class A-2 Prepayment Premium, Class A-3
Prepayment Premium, Class A-4 Prepayment Premium and Class A-5 Prepayment
Premium.
SECTION 2.5. REPRESENTATIONS AND WARRANTIES OF SELLER. By its
execution of this Agreement and each Subsequent Transfer Agreement, the Seller
makes the following representations and warranties on which the Trust relies in
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accepting the Receivables and the other Trust Property in trust and on which the
Owner Trustee relies in issuing on behalf of the Trust, the Certificates and
Notes and upon which the Security Insurer relies in issuing the Policies.
Unless otherwise specified, such representations and warranties speak as of the
Closing Date or Subsequent Transfer Date, as appropriate, but shall survive the
sale, transfer, and assignment of the Receivables to the Trust.
(a) SCHEDULE OF REPRESENTATIONS. The representations and
warranties set forth on the Schedule of Representations are true and
correct.
(b) ORGANIZATION AND GOOD STANDING. The Seller has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at all relevant
times, and now has, power, authority and legal right to acquire, own and
sell the Receivables and the other property transferred to the Trust.
(c) DUE QUALIFICATION. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of its property or the conduct of its business requires
such qualification.
(d) POWER AND AUTHORITY. The Seller has the power and authority
to execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively; the Seller has full
power and authority to sell and assign the Trust Property to be sold and
assigned to and deposited with the Trust by it and has duly authorized such
sale and assignment to the Trust by all necessary corporate action; and the
execution, delivery and performance of this Agreement and the Seller's
Related Documents have been duly authorized by the Seller by all necessary
corporate action.
(e) VALID SALE; BINDING OBLIGATIONS. This Agreement and the
related Subsequent Transfer Agreement, if any, effects a valid sale,
transfer and assignment of the Receivables and the other Trust Property,
enforceable against the Seller and creditors of and purchasers from the
Seller; and this Agreement and the related Subsequent Transfer Agreement,
if any, and the Seller's Related Documents, when duly executed and
delivered, shall constitute legal, valid and binding obligations of the
Seller enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally
and by equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
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(f) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the related Subsequent Transfer
Agreement, if any, and the Related Documents and the fulfillment of the
terms of this Agreement and the related Subsequent Transfer Agreement, if
any, and the Related Documents shall not conflict with, result in any
breach of any of the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the certificate of
incorporation or by-laws of the Seller, or any indenture, agreement,
mortgage, deed of trust 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, mortgage, deed of trust or other instrument, other
than this Agreement, or violate any law, 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 any of its properties. Notwithstanding the
foregoing, it is understood that no representation or warranty is expressed
herein with respect to the legality of the use of word "Olympic" by the
Seller or its Affiliates.
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Seller's knowledge, threatened against the Seller or
OFL, before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over the
Seller or its properties (A) asserting the invalidity of this Agreement or
any of the Related Documents, (B) seeking to prevent the issuance of the
Certificates or the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (C) 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 or any of the Related Documents, or
(D) seeking to adversely affect the federal income tax or other federal,
state or local tax attributes of the Certificates or the Notes.
(h) CHIEF EXECUTIVE OFFICE. The chief executive office of the
Seller is at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇.
(i) REGISTRATION STATEMENT. No stop order suspending the
effectiveness of the Registration Statement relating to the Certificates
and Notes has been issued, and no proceeding for that purpose has been
instituted or is threatened, by the Securities and Exchange Commission.
(j) FILINGS. Since the effective date of the Registration
Statement relating to the Certificates and Notes, there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not been so set forth, and
there has been no
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document required to be filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange
Commission thereunder that upon such filing would be deemed to be
incorporated by reference in the Prospectus that has not been so filed.
SECTION 2.6. REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY.
Concurrently with the execution and delivery of this Agreement or the applicable
Subsequent Transfer Agreement, as appropriate, OFL and the Seller have entered
into the Purchase Agreements or Subsequent Purchase Agreement, as applicable,
the rights of the Seller under which have been assigned by the Seller to the
Trust. Under the Purchase Agreements and each Subsequent Purchase Agreement, if
applicable, OFL has made the same representations and warranties to the Seller
with respect to the Receivables as those made by Seller pursuant to the Schedule
of Representations, upon which the Owner Trustee has relied in accepting the
Trust Property in trust and executing the Certificates and Notes and upon which
the Security Insurer has relied in issuing the Policies and upon which the
Indenture Trustee has relied in authenticating the Notes. Upon discovery by any
of OFL, the Seller, the Servicer, the Security Insurer, the Indenture Trustee or
the Owner Trustee of a breach of any of the representations and warranties
contained in Section 2.5 that materially and adversely affects the interests of
the Noteholders, the Certificateholders, the Security Insurer or the Trust in
any Receivable (including any Liquidated Receivable), the party discovering such
breach shall give prompt written notice to the others; PROVIDED, HOWEVER, that
the failure to give any such notice shall not affect any obligation of OFL or
the Seller. As of the second Accounting Date (or, at OFL's election, the first
Accounting Date) following its discovery or its receipt of notice of any breach
of the representations and warranties set forth on the Schedule of
Representations that materially and adversely affects the interests of the
Noteholders, the Certificateholders, the Security Insurer or the Trust in any
Receivable (including any Liquidated Receivable), OFL shall, unlesssuch breach
shall have been cured in all material respects, purchase such Receivable from
the Trust and, on or before the related Deposit Date, OFL shall pay the Purchase
Amount to the Owner Trustee pursuant to Section 4.5. The obligations of the
Seller with respect to any such breach of representations and warranties shall
be limited to taking any and all actions necessary to enable the Owner Trustee
to enforce directly the obligations of OFL under the Purchase Agreement or
Subsequent Purchase Agreement, as applicable. It is understood and agreed that,
except as set forth in this Section 2.6, the obligation of OFL to repurchase any
Receivable as to which a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against OFL or the Seller
for such breach available to the Security Insurer, the Indenture Trustee on
behalf of the Noteholders or the Owner Trustee on behalf of Certificateholders.
In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by the Seller or OFL, OFL shall indemnify
the Owner Trustee, the Indenture Trustee, the Backup Servicer, the Collateral
Agent, the Security Insurer, the Trust, the Noteholders and the
Certificateholders against
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all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such breach.
SECTION 2.7. NONPETITION COVENANT. None of the Seller, the Servicer,
the Owner Trustee (in its individual capacity or on behalf of the Trust), the
Backup Servicer nor OFL shall petition or otherwise invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Trust or either General Partner 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
Trust or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Trust.
SECTION 2.8. COLLECTING LIEN CERTIFICATES NOT DELIVERED ON THE
CLOSING DATE OR SUBSEQUENT TRANSFER DATE. In the case of any Receivable in
respect of which written evidence from the Dealer selling the related Financed
Vehicle that the Lien Certificate for such Financed Vehicle showing OFL as first
lienholder has been applied for from the Registrar of Titles was delivered to
the Custodian on the Closing Date or Subsequent Transfer Date, as appropriate,
in lieu of a Lien Certificate, the Servicer shall use its best efforts to
collect such Lien Certificate from the Registrar of Titles as promptly as
practicable. If such Lien Certificate showing OFL as first lienholder is not
received by the Custodian within 180 days after the Closing Date or Subsequent
Transfer Date, as appropriate, then the representation and warranty in
Paragraph 18 of the Schedule of Representations in respect of such Receivable
shall be deemed to have been incorrect in a manner that materially and
adversely affects the Certificateholders, the Noteholders, the Security
Insurer and the Trust.
SECTION 2.9. TRUST'S ASSIGNMENT OF ADMINISTRATIVE RECEIVABLES AND
WARRANTY RECEIVABLES. With respect to all Administrative Receivables and all
Warranty Receivables purchased by the Servicer, the Seller or OFL, the Owner
Trustee shall take any and all actions reasonably requested by the Seller, OFL
or Servicer, at the expense of the requesting party, to assign, without
recourse, representation or warranty, to the Seller, OFL or the Servicer, as
applicable, all the Trust's right, title and interest in and to such purchased
Receivable, all monies due thereon, the security interests in the related
Financed Vehicles, proceeds from any Insurance Policies, proceeds from recourse
against Dealers on such Receivables and the interests of the Trust in certain
rebates of premiums and other amounts relating to the Insurance Policies and any
documents relating thereto, such assignment being an assignment outright and not
for security; and the Seller, OFL or the Servicer, as applicable, shall
thereupon own such Receivable, and all such security and documents, free of any
further obligation to the Owner Trustee, the Trust, the Indenture Trustee, the
Security Insurer, the Indenture Collateral Agent, the Certificateholders or the
Noteholders with respect thereto.
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ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.1. DUTIES OF THE SERVICER. The Servicer is hereby
authorized to act as agent for the Trust and in such capacity shall manage,
service, administer and make collections on the Receivables, and perform the
other actions required by the Servicer under this Agreement. The Servicer
agrees that its servicing of the Receivables shall be carried out in accordance
with customary and usual procedures of institutions which service motor vehicle
retail installment sales contracts and, to the extent more exacting, the degree
of skill and attention that the Servicer exercises from time to time with
respect to all comparable motor vehicle receivables that it services for itself
or others. In performing such duties, so long as OFL is the Servicer, it shall
comply with the policies and procedures attached hereto as Schedule B. The
Servicer's duties shall include, without limitation, collection and posting of
all payments, responding to inquiries of Obligors on the Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting any
required tax information to Obligors, policing the collateral, complying with
the terms of the Lockbox Agreement, accounting for collections and furnishing
monthly and annual statements to the Owner Trustee, the Indenture Trustee and
the Security Insurer with respect to distributions, monitoring the status of
Insurance Policies with respect to the Financed Vehicles and performing the
other duties specified herein. The Servicer shall also administer and enforce
all rights and responsibilities of the holder of the Receivables provided for in
the Dealer Agreements (and shall maintain possession of the Dealer Agreements,
to the extent it is necessary to do so), the Dealer Assignments and the
Insurance Policies, to the extent that such Dealer Agreements, Dealer
Assignments and Insurance Policies relate to the Receivables, the Financed
Vehicles or the Obligors. To the extent consistent with the standards, policies
and procedures otherwise required hereby, the Servicer shall follow its
customary standards, policies, and procedures and shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered by the Owner Trustee to execute and deliver, on
behalf of the Certificateholders and the Trust or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Receivables
and with respect to the Financed Vehicles; PROVIDED, HOWEVER, that
notwithstanding the foregoing, the Servicer shall not, except pursuant to an
order from a court of competent jurisdiction, release an Obligor from payment of
any unpaid amount under any Receivable or waive the right to collect the unpaid
balance of any Receivable from the Obligor, except that the Servicer may forego
collection efforts if the amount subject to collection is DE MINIMIS and if it
would forego collection in accordance with its customary procedures. The
Servicer is hereby authorized to commence, in its own name or in the name of the
Trust (provided the Servicer has obtained the Owner Trustee's consent, which
consent shall not be unreasonably
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withheld), a legal proceeding to enforce a Receivable pursuant to Section 3.3 or
to commence or participate in any other legal proceeding (including, without
limitation, a bankruptcy proceeding) relating to or involving a Receivable, an
Obligor or a Financed Vehicle. If the Servicer commences or participates in
such a legal proceeding in its own name, the Trust shall thereupon be deemed to
have automatically assigned such Receivable to the Servicer solely for purposes
of commencing or participating in any such proceeding as a party or claimant,
and the Servicer is authorized and empowered by the Owner Trustee to execute and
deliver in the Servicer's name any notices, demands, claims, complaints,
responses, affidavits or other documents or instruments in connection with any
such proceeding. The Owner Trustee shall furnish the Servicer with any powers
of attorney and other documents which the Servicer may reasonably request and
which the Servicer deems necessary or appropriate and take any other steps which
the Servicer may deem necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties under this Agreement.
SECTION 3.2. COLLECTION OF RECEIVABLE PAYMENTS; MODIFICATIONS OF
RECEIVABLES; LOCKBOX AGREEMENTS.
(a) Consistent with the standards, policies and procedures required
by this Agreement, the Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as and
when the same shall become due, and shall follow such collection procedures as
it follows with respect to all comparable automobile receivables that it
services for itself or others and otherwise act with respect to the Receivables,
the Dealer Agreements, the Dealer Assignments, the Insurance Policies and the
other Trust Property in such manner as will, in the reasonable judgment of the
Servicer, maximize the amount to be received by the Trust with respect thereto.
The Servicer is authorized in its discretion to waive any prepayment charge,
late payment charge or any other similar fees that may be collected in the
ordinary course of servicing any Receivable.
(b) The Servicer may at any time agree to a modification, amendment
or extension of a Receivable in order to (i) change the Obligor's regular due
date to a date within the Monthly Period in which such due date occurs,
(ii) re-amortize the scheduled payments on the Receivable following a partial
prepayment of principal and (iii) grant extensions on a Receivable, provided
that the Servicer shall not be permitted to extend the monthly payments on a
Receivable more than two times in any twelve-month period, and provided
further that the aggregate period of all extensions on a Receivable shall not
exceed six months.
(c) The Servicer may grant payment extensions or deferrals on, or
other modifications or amendments to, a Receivable (in addition to those
modifications permitted by Section 3.2(b)) in accordance with its customary
procedures if the Servicer believes in good faith that such extension, deferral,
modification or amendment is necessary to avoid a default on such Receivable,
will
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maximize the amount to be received by the Trust with respect to such Receivable,
and is otherwise in the best interests of the Trust; PROVIDED, HOWEVER, that:
(i) In no event may a Receivable be extended beyond the
Monthly Period immediately preceding the Final Scheduled Distribution Date;
(ii) So long as an Insurer Default shall not have occurred and
be continuing, the Servicer shall not amend or modify a Receivable (except
as provided in Section 3.2(b)) without the consent of the Security Insurer;
(iii) So long as an Insurer Default shall not have occurred and
be continuing, the Aggregate Principal Balance of Receivables which have
been extended during any Monthly Period (A) shall not exceed 6.5% of the
Aggregate Principal Balance of Receivables during such Monthly Period
(computed as of the Accounting Date immediately prior to the first day of
the related Monthly Period) and (B) shall not exceed 4.0% of the average of
the Aggregate Principal Balance of Receivables for such Monthly Period and
the three prior Monthly Periods (computed as of the Accounting Date
immediately prior to the first day of the related Monthly Period);
(iv) So long as an Insurer Default shall not have occurred and
be continuing, the Aggregate Principal Balance of Receivables for which
payment deferrals have been granted during any Monthly Period (A) shall not
exceed 3.0% of the Aggregate Principal Balance of Receivables during such
Monthly Period (computed as of the Accounting Date immediately prior to the
first day of the related Monthly Period) and (B) shall not exceed 2.0% of
the average of the Aggregate Principal Balance of Receivables for such
Monthly Period and the three prior Monthly Periods (computed as of the
Accounting Date immediately prior to the first day of the related Monthly
Period);
(v) No such extension, modification or amendment shall be
granted if such action, when aggregated with all previous extensions,
modifications and amendments of Receivables, would have the effect of
causing any Notes to be deemed to have been exchanged for other Notes
within the meaning of Section 1001 of the Internal Revenue Code of 1986, as
amended, or any proposed, temporary or final Treasury Regulations issued
thereunder; and
(vi) If an Insurer Default shall have occurred and be
continuing, the Servicer may not extend or modify any Receivable (other
than as permitted by Section 3.2(b)).
(d) The Servicer shall use its best efforts to cause Obligors to make
all payments on the Receivables, whether by check or by direct debit of the
Obligor's
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bank account, to be made directly to one or more Lockbox Banks, acting as agent
for the Trust pursuant to a Lockbox Agreement. Amounts received by a Lockbox
Bank in respect of the Receivables may initially be deposited into a demand
deposit account maintained by the Lockbox Bank as agent for the Trust and for
other owners of automobile receivables serviced by the Servicer. The Servicer
shall use its best efforts to cause any Lockbox Bank to deposit all payments on
the Receivables in the Lockbox Account no later than the Business Day after
receipt, and to cause all amounts credited to the Lockbox Account on account of
such payments to be transferred to the Collection Account no later than the
second Business Day after receipt of such payments. The Lockbox Account shall
be a demand deposit account held by the Lockbox Bank, or at the request of the
Security Insurer (unless an Insurer Default shall have occurred and be
continuing) an Eligible Account satisfying clause (i) of the definition thereof.
Prior to the Closing Date and each Subsequent Transfer Date, as
applicable, the Servicer shall have notified each Obligor that makes its
payments on the Receivables by check to make such payments thereafter directly
to the Lockbox Bank (except in the case of Obligors that have already been
making such payments to the Lockbox Bank), and shall have provided each such
Obligor with a supply of mailing address labels in order to enable such Obligors
to make such payments directly to the Lockbox Bank for deposit into the Lockbox
Account, and the Servicer will continue, not less often than every three months,
to so notify those Obligors who have failed to make payments to the Lockbox
Bank. If and to the extent requested by the Security Insurer (unless an Insurer
Default shall have occurred and be continuing), the Servicer shall request each
Obligor that makes payment on the Receivables by direct debit of such Obligor's
bank account, to execute a new authorization for automatic payment which in the
judgment of the Security Insurer is sufficient to authorize direct debit by the
Lockbox Bank on behalf of the Trust. If at any time the Lockbox Bank is unable
to directly debit an Obligor's bank account that makes payment on the
Receivables by direct debit and if such inability is not cured within 15 days or
cannot be cured by execution by the Obligor of a new authorization for automatic
payment, the Servicer shall notify such Obligor that it cannot make payment by
direct debit and must thereafter make payment by check.
Notwithstanding any Lockbox Agreement, or any of the provisions of
this Agreement relating to the Lockbox Agreement, the Servicer shall remain
obligated and liable to the Owner Trustee, Indenture Trustee, Certificateholders
and Noteholders for servicing and administering the Receivables and the other
Trust Property in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue thereof.
In the event the Servicer shall for any reason no longer be acting as
such, the successor Servicer shall thereupon assume all of the rights and
obligations of the outgoing Servicer under the Lockbox Agreement. In such
event, the successor Servicer shall be deemed to have assumed all of the
outgoing Servicer's interest therein and to have replaced the outgoing Servicer
as a party to each such
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Lockbox Agreement to the same extent as if such Lockbox Agreement had been
assigned to the successor Servicer, except that the outgoing Servicer shall not
thereby be relieved of any liability or obligations on the part of the outgoing
Servicer to the Lockbox Bank under such Lockbox Agreement. The outgoing
Servicer shall, upon request of the Owner Trustee but at the expense of the
outgoing Servicer, deliver to the successor Servicer all documents and records
relating to each such Agreement and an accounting of amounts collected and held
by the Lockbox Bank and otherwise use its best efforts to effect the orderly and
efficient transfer of any Lockbox Agreement to the successor Servicer. In the
event that the Security Insurer (so long as an Insurer Default shall not have
occurred and be continuing) or a Certificate Majority and Note Majority (if an
Insurer Default shall have occurred and be continuing) elects to change the
identity of the Lockbox Bank, the outgoing Servicer, at its expense, shall cause
the Lockbox Bank to deliver, at the direction of the Security Insurer (so long
as an Insurer Default shall not have occurred and be continuing) or a
Certificate Majority and Note Majority (if an Insurer Default shall have
occurred and be continuing) to the Owner Trustee or a successor Lockbox Bank,
all documents and records relating to the Receivables and all amounts held (or
thereafter received) by the Lockbox Bank (together with an accounting of such
amounts) and shall otherwise use its best efforts to effect the orderly and
efficient transfer of the lockbox arrangements and the Servicer shall notify the
Obligors to make payments to the Lockbox established by the successor.
(e) The Servicer shall remit all payments by or on behalf of the
Obligors received directly by the Servicer to the Subcollection Account or to
the Lockbox Bank for deposit into the Collection Account without deposit into
any intervening account as soon as practicable, but in no event later than the
Business Day after receipt thereof.
SECTION 3.3. REALIZATION UPON RECEIVABLES.
(a) Consistent with the standards, policies and procedures required
by this Agreement, the Servicer shall use its best efforts to repossess (or
otherwise comparably convert the ownership of) and liquidate any Financed
Vehicle securing a Receivable with respect to which the Servicer has determined
that payments thereunder are not likely to be resumed, as soon as is practicable
after default on such Receivable but in no event later than the date on which
all or any portion of a Scheduled Payment has become 91 days delinquent. The
Servicer is authorized to follow such customary practices and procedures as it
shall deem necessary or advisable, consistent with the standard of care required
by Section 3.1, which practices and procedures may include reasonable efforts to
realize upon any recourse to Dealers, the sale of the related Financed Vehicle
at public or private sale, the submission of claims under an Insurance Policy
and other actions by the Servicer in order to realize upon such a Receivable.
The foregoing is 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 any repair or towards the repossession of such Financed
Vehicle unless it shall determine in its discretion that
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such repair and/or repossession shall increase the proceeds of liquidation of
the related Receivable by an amount greater than the amount of such expenses.
All amounts received upon liquidation of a Financed Vehicle shall be remitted
directly by the Servicer to the Subcollection Account without deposit into any
intervening account as soon as practicable, but in no event later than the
Business Day after receipt thereof. The Servicer shall be entitled to recover
all reasonable expenses incurred by it in the course of repossessing and
liquidating a Financed Vehicle into cash proceeds, but only out of the cash
proceeds of such Financed Vehicle, any deficiency obtained from the Obligor or
any amounts received from the related Dealer, which amounts may be retained by
the Servicer (and shall not be required to be deposited as provided in Section
3.2(e)) to the extent of such expenses. The Servicer shall pay on behalf of the
Trust any personal property taxes assessed on repossessed Financed Vehicles; the
Servicer shall be entitled to reimbursement of any such tax from Liquidation
Proceeds with respect to such Receivable.
(b) If the Servicer elects to commence a legal proceeding to enforce
a Dealer Agreement or Dealer Assignment, the act of commencement shall be deemed
to be an automatic assignment from the Trust to the Servicer of the rights under
such Dealer Agreement and Dealer Assignment for purposes of collection only.
If, however, in any enforcement suit or legal proceeding, it is held that the
Servicer may not enforce a Dealer Agreement or Dealer Assignment on the grounds
that it is not a real party in interest or a Person entitled to enforce the
Dealer Agreement or Dealer Assignment, the Owner Trustee, at the Servicer's
expense, or the Seller, at the Seller's expense, shall take such steps as the
Servicer deems necessary to enforce the Dealer Agreement or Dealer Assignment,
including bringing suit in its name or the name of the Seller or of the Owner
Trustee for the benefit of the Certificateholders and the Indenture Collateral
Agent for the benefit of the Issuer Secured Parties. All amounts recovered
shall be remitted directly by the Servicer as provided in Section 3.2(e).
SECTION 3.4. INSURANCE.
(a) The Servicer shall require that each Financed Vehicle be insured
by the Insurance Policies referred to in Paragraph 24 of the Schedule of
Representations and Warranties and shall monitor the status of such physical
loss and damage insurance coverage thereafter, in accordance with its customary
servicing procedures. Each Receivable requires the Obligor to maintain such
physical loss and damage insurance, naming OFL and its successors and assigns as
additional insureds, and permits the holder of such Receivable to obtain
physical loss and damage insurance at the expense of the Obligor if the Obligor
fails to maintain such insurance. If the Servicer shall determine that an
Obligor has failed to obtain or maintain a physical loss and damage Insurance
Policy covering the related Financed Vehicle which satisfies the conditions set
forth in clause (1)(A) of such Paragraph 24 (including, without limitation,
during the repossession of such Financed Vehicle) the Servicer shall enforce the
rights of the holder of the
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Receivable under the Receivable to require the Obligor to obtain such physical
loss and damage insurance.
(b) The Servicer may, if an Obligor fails to obtain or maintain a
physical loss and damage Insurance Policy, obtain insurance with respect to the
related Financed Vehicle and advance on behalf of such Obligor, as required
under the terms of the insurance policy, the premiums for such insurance (such
insurance being referred to herein as "Force-Placed Insurance"). All policies
of Force-Placed Insurance shall be endorsed with clauses providing for loss
payable to the Owner Trustee. Any cost incurred by the Servicer in maintaining
such Force-Placed Insurance shall only be recoverable out of premiums paid by
the Obligors or Liquidation Proceeds with respect to the Receivable, as provided
in Section 3.4(c).
(c) In connection with any Force-Placed Insurance obtained hereunder,
the Servicer may, in the manner and to the extent permitted by applicable law,
require the Obligors to repay the entire premium to the Servicer. In no event
shall the Servicer include the amount of the premium in the Amount Financed
under the Receivable. For all purposes of this Agreement, the Insurance Add-On
Amount with respect to any Receivable having Force-Placed Insurance will be
treated as a separate obligation of the Obligor and will not be added to the
Principal Balance of such Receivable, and amounts allocable thereto will not be
available for distribution on the Notes or the Certificates. The Servicer shall
retain and separately administer the right to receive payments from Obligors
with respect to Insurance Add-On Amounts or rebates of Force-Placed Insurance
premiums. If an Obligor makes a payment with respect to a Receivable having
Force-Placed Insurance, but the Servicer is unable to determine whether the
payment is allocable to the Receivable or to the Insurance Add-On Amount, the
payment shall be applied first to any unpaid Scheduled Payments and then to the
Insurance Add-On Amount. Liquidation Proceeds on any Receivable will be used
first to pay the Principal Balance and accrued interest on such Receivable and
then to pay the related Insurance Add-On Amount. If an Obligor under a
Receivable with respect to which the Servicer has placed Force-Placed Insurance
fails to make scheduled payments of such Insurance Add-On Amount as due, and the
Servicer has determined that eventual payment of the Insurance Add-On Amount is
unlikely, the Servicer may, but shall not be required to, purchase such
Receivable from the Trust for the Purchase Amount on any subsequent Deposit
Date. Any such Receivable, and any Receivable with respect to which the
Servicer has placed Force-Placed Insurance which has been paid in full
(excluding any Insurance Add-On Amounts) will be assigned to the Servicer.
(d) The Servicer may ▇▇▇ to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent of the Trust. If the
Servicer elects to commence a legal proceeding to enforce an Insurance Policy,
the act of commencement shall be deemed to be an automatic assignment of the
rights of the Trust under such Insurance Policy to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer
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may not enforce an Insurance Policy on the grounds that it is not a real party
in interest or a holder entitled to enforce the Insurance Policy, the Owner
Trustee, on behalf of the Trust, at the Servicer's expense, or the Seller, at
the Seller's expense, shall take such steps as the Servicer deems necessary to
enforce such Insurance Policy, including bringing suit in its name or the name
of the Owner Trustee for the benefit of the Certificateholders and the Indenture
Collateral Agent for the benefit of the Issuer Secured Parties.
(e) The Servicer shall maintain a vendor's single interest or other
collateral protection insurance policy with respect to all Financed Vehicles,
which policy shall by its terms insure against physical damage in the event any
Obligor fails to maintain physical loss and damage insurance with respect to the
related Financed Vehicle. Costs incurred by the Servicer in maintaining such
insurance shall be paid by the Servicer. The Servicer will cause itself to be
named as named insured and the Owner Trustee to be named a loss payee under all
such policies. The Servicer may, with the consent of the Security Insurer,
elect not to maintain such insurance policy but in such event will be obligated
to indemnify the Trust against any losses arising from an Obligor's failure to
maintain physical loss and damage insurance with respect to the related Financed
Vehicle.
SECTION 3.5. MAINTENANCE OF SECURITY INTERESTS IN VEHICLES.
(a) Consistent with the policies and procedures required by this
Agreement, the Servicer shall take such steps as are necessary to maintain
perfection of the security interest created by each Receivable in the related
Financed Vehicle on behalf of the Trust, including but not limited to obtaining
the execution by the Obligors and the recording, registering, filing,
re-recording, re-filing, and re-registering of all security agreements,
financing statements and continuation statements as are necessary to maintain
the security interest granted by the Obligors under the respective Receivables.
The Owner Trustee hereby authorizes the Servicer, and the Servicer agrees, to
take any and all steps necessary to re-perfect such security interest on behalf
of the Trust as necessary because of the relocation of a Financed Vehicle or for
any other reason. In the event that the assignment of a Receivable to the Owner
Trustee on behalf of the Trust is insufficient, without a notation on the
related Financed Vehicle's certificate of title, or without fulfilling any
additional administrative requirements under the laws of the state in which the
Financed Vehicle is located, to perfect a security interest in the related
Financed Vehicle in favor of the Trust, the Servicer hereby agrees that the
Servicer's designation as the secured party on the certificate of title is in
its capacity as agent of the Trust.
(b) Upon the occurrence of an Insurance Agreement Event of Default,
the Security Insurer may (so long as an Insurer Default shall not have occurred
and be continuing) instruct the Owner Trustee and the Servicer to take or cause
to be taken, or, if an Insurer Default shall have occurred, upon the occurrence
of a Servicer Termination Event, the Owner Trustee and the Servicer shall take
or
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cause to be taken such action as may, in the opinion of counsel to the Security
Insurer (or, if an Insurer Default shall have occurred and be continuing,
counsel to the Owner Trustee), be necessary to perfect or re-perfect the
security interests in the Financed Vehicles securing the Receivables in the name
of the Trust by amending the title documents of such Financed Vehicles or by
such other reasonable means as may, in the opinion of counsel to the Security
Insurer or the Owner Trustee (as applicable), be necessary or prudent. OFL
hereby agrees to pay all expenses related to such perfection or re-perfection
and to take all action necessary therefor. In addition, prior to the occurrence
of an Insurance Agreement Event of Default, the Security Insurer may (unless an
Insurer Default shall have occurred and be continuing) instruct the Owner
Trustee and the Servicer to take or cause to be taken such action as may, in the
opinion of counsel to the Security Insurer, be necessary to perfect or
re-perfect the security interest in the Financed Vehicles underlying the
Receivables in the name of the Trust, including by amending the title documents
of such Financed Vehicles or by such other reasonable means as may, in the
opinion of counsel to the Security Insurer, be necessary or prudent; PROVIDED,
HOWEVER, that (unless an Insurer Default shall have occurred and be continuing)
if the Security Insurer requests that the title documents be amended prior to
the occurrence of an Insurance Agreement Event of Default, the out-of-pocket
expenses of the Servicer or the Owner Trustee in connection with such action
shall be reimbursed to the Servicer or the Owner Trustee, as applicable, by the
Security Insurer.
SECTION 3.6. COVENANTS, REPRESENTATIONS, AND WARRANTIES OF SERVICER.
By its execution and delivery of this Agreement, the Servicer makes the
following representations, warranties and covenants on which the Owner Trustee
relies in accepting the Receivables in trust and issuing the Certificates and
the Notes on behalf of the Trust, on which the Indenture Trustee relies in
authenticating the Notes and on which the Security Insurer relies in issuing the
Policies.
(a) The Servicer covenants as follows:
(i) LIENS IN FORCE. The Financed Vehicle securing
each Receivable shall not be released in whole or in part from the
security interest granted by the Receivable, except upon payment in
full of the Receivable or as otherwise contemplated herein;
(ii) NO IMPAIRMENT. The Servicer shall do nothing to
impair the rights of the Trust, the Certificateholders or the
Noteholders in the Receivables, the Dealer Agreements, the Dealer
Assignments, the Insurance Policies or the other Trust Property; and
(iii) NO AMENDMENTS. The Servicer shall not extend or
otherwise amend the terms of any Receivable, except in accordance with
Section 3.2.
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(b) The Servicer represents, warrants and covenants as of the
Closing Date as to itself:
(i) ORGANIZATION AND GOOD STANDING. The Servicer has
been duly organized and is validly existing and in good standing under
the laws of its jurisdiction of organization, with power, authority
and legal right to own its properties and to conduct its business as
such properties are currently owned and such business is currently
conducted, and had at all relevant times, and now has, power,
authority and legal right to enter into and perform its obligations
under this Agreement;
(ii) DUE QUALIFICATION. The Servicer is duly qualified
to do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions in
which the ownership or lease of property or the conduct of its
business (including the servicing of the Receivables as required by
this Agreement) requires or shall require such qualification;
(iii) POWER AND AUTHORITY. The Servicer has the power
and authority to execute and deliver this Agreement and its Related
Documents and to carry out its terms and their terms, respectively,
and the execution, delivery and performance of this Agreement and the
Servicer's Related Documents have been duly authorized by the Servicer
by all necessary corporate action;
(iv) BINDING OBLIGATION. This Agreement and the
Servicer's Related Documents shall constitute legal, valid and binding
obligations of the Servicer enforceable in accordance with their
respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(v) NO VIOLATION. The consummation of the
transactions contemplated by this Agreement and the Servicer's Related
Documents, and the fulfillment of the terms of this Agreement and the
Servicer's Related Documents, 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
incorporation or bylaws of the Servicer, or any indenture, agreement,
mortgage, deed of trust or other instrument to which the Servicer is a
party or by which it is bound, or result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other
instrument,
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other than this Agreement, or violate any law, 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 any of its
properties. Notwithstanding the foregoing, it is understood that no
representation or warranty is expressed herein with respect to the
legality of the use of the word "Olympic" by the Servicer;
(vi) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to the Servicer's knowledge, threatened
against the Servicer, before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Servicer or its
properties (A) asserting the invalidity of this Agreement or any of the
Related Documents, (B) seeking to prevent the issuance of the
Certificates or the Notes or the consummation of any of the
transactions contemplated by this Agreement or any of the Related
Documents, or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this
Agreement or any of the Related Documents or (D) seeking to adversely
affect the federal income tax or other federal, state or local tax
attributes of the Certificates or the Notes;
(vii) NO CONSENTS. The Servicer is not required to
obtain the consent of any other party or any consent, license,
approval or authorization, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement;
(viii) COLLATERAL INSURANCE. The Collateral Insurance is
in full force and effect.
SECTION 3.7. PURCHASE OF RECEIVABLES UPON BREACH OF COVENANT. Upon
discovery by any of the Servicer, the Security Insurer, the Owner Trustee or the
Indenture Trustee of a breach of any of the covenants set forth in Sections
3.5(a) or 3.6(a), the party discovering such breach shall give prompt written
notice to the others; PROVIDED, HOWEVER, that the failure to give any such
notice shall not affect any obligation of the Servicer. As of the second
Accounting Date following its discovery or receipt of notice of any breach of
any covenant set forth in Sections 3.5(a) or 3.6(a) which materially and
adversely affects the interests of the Certificateholders, the Noteholders, the
Trust or the Security Insurer in any Receivable (including any Liquidated
Receivable) (or, at the Servicer's election, the first Accounting Date so
following), the Servicer shall, unless it shall have cured such breach in all
material respects, purchase from the Trust the Receivable affected by such
breach and, on the related Deposit Date, the Servicer shall pay the related
Purchase Amount. It is understood and agreed that the obligation of the
Servicer to
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purchase any Receivable (including any Liquidated Receivable) with respect to
which such a breach has occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against the Servicer for such breach
available to the Security Insurer, the Certificateholders, the Noteholders, the
Owner Trustee on behalf of Certificateholders or the Indenture Trustee on behalf
of Noteholders; PROVIDED, HOWEVER, that the Servicer shall indemnify the Owner
Trustee, the Backup Servicer, the Collateral Agent, the Security Insurer, the
Trust, the Indenture Trustee, the Noteholders and the Certificateholders against
all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such breach.
SECTION 3.8. TOTAL SERVICING FEE; PAYMENT OF CERTAIN EXPENSES BY
SERVICER. On each Distribution Date, the Servicer shall be entitled to receive
out of the Collection Account the Basic Servicing Fee and any Supplemental
Servicing Fee for the related Monthly Period pursuant to Section 4.6. The
Servicer shall be required to pay all expenses incurred by it in connection with
its activities under this Agreement (including taxes imposed on the Servicer,
expenses incurred in connection with distributions and reports to
Certificateholders, Noteholders and the Security Insurer and all other fees and
expenses of the Trust, including taxes levied or assessed against the Trust, and
claims against the Trust in respect of indemnification, unless such fees,
expenses or claims in respect of indemnification are expressly stated to be for
the account of OFL or not to be for the account of the Servicer). The Servicer
shall be liable for the fees and expenses of the Owner Trustee, the
Administrator, the Indenture Collateral Agent, the Indenture Trustee, the
Custodian, the Backup Servicer, the Collateral Agent, the Lockbox Bank (and any
fees under the Lockbox Agreement) and the Independent Accountants.
Notwithstanding the foregoing, if the Servicer shall not be OFL, a successor to
OFL as Servicer permitted by Section 7.2 or an Affiliate of any of the
foregoing, such Servicer shall not be liable for taxes levied or assessed
against the Trust or claims against the Trust in respect of indemnification.
SECTION 3.9. SERVICER'S CERTIFICATE. No later than 10:00 a.m. New
York City time on each Determination Date, the Servicer shall deliver to the
Owner Trustee, the Indenture Trustee, the Backup Servicer, the Security
Insurer, the Collateral Agent and each Rating Agency a Servicer's Certificate
executed by a Responsible Officer of the Servicer containing, among other
things, (i) all information necessary to enable the Indenture Trustee to make
any withdrawal and deposit required by Section 5.1, to give any notice
required by Section 5.2, to make the distributions required by Sections 4.6
and 4.7(b), to make the withdrawals, distributions and deliveries required by
Section 4.7(a) and to determine the amount to which the Servicer is entitled
to be reimbursed or has been reimbursed during the related Monthly Period for
Monthly Advances pursuant to Section 4.4(c), (ii) all information necessary
to enable the Indenture Trustee to send the statements to Noteholders and
Certificateholders required by Section 4.9, (iii) a listing of all Warranty
Receivables and Administrative Receivables purchased as of the related
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Deposit Date, identifying the Receivables so purchased, and (iv) all information
necessary to enable the Indenture Trustee to reconcile all deposits to, and
withdrawals from, the Collection Account for the related Monthly Period and
Distribution Date, including the accounting required by Section 4.8.
Receivables purchased by the Servicer or by the Seller or OFL on the related
Deposit Date and each Receivable which became a Liquidated Receivable or which
was paid in full during the related Monthly Period shall be identified by
account number (as set forth in the Schedule of Receivables). A copy of such
certificate may be obtained by any Certificateholder or Noteholder (or by a
Certificate Owner or Note Owner, upon certification that such Person is a
Certificate Owner or Note Owner and payment of any expenses associated with the
distribution thereof) by a request in writing to the Indenture Trustee addressed
to the Corporate Trust Office. In addition to the information set forth in the
preceding sentence, the Servicer's Certificate delivered to the Security
Insurer, the Collateral Agent and the Indenture Trustee on the Determination
Date shall also contain the following information: (a) the Delinquency Ratio,
Average Delinquency Ratio, Cumulative Default Rate and Cumulative Net Loss Rate
for such Determination Date; (b) whether any Trigger Event has occurred as of
such Determination Date; (c) whether any Trigger Event that may have occurred as
of a prior Determination Date is Deemed Cured as of such Determination Date;
(d) whether to the knowledge of the Servicer an Insurance Agreement Event of
Default has occurred, (e) if OFL shall be the Servicer, whether a Capture Event
shall have occurred and be continuing, and (f) if OFL shall be the Servicer,
whether any Capture Event specified in any prior Servicer's Certificate has been
cured by a permanent waiver, effective in accordance with the terms of the
Purchase Agreements.
SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF SERVICER
TERMINATION EVENT.
(a) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, the Backup Servicer, the Security Insurer and each Rating Agency, on or
before March 31 (or 90 days after the end of the Servicer's fiscal year, if
other than December 31) of each year, beginning on March 31, 1998, an officer's
certificate signed by any Responsible Officer of the Servicer, dated as of
December 31 (or other applicable date) of the immediately preceding year,
stating that (i) a review of the activities of the Servicer during the preceding
12-month period (or such other period as shall have elapsed from the Closing
Date to the date of the first such certificate) and of its performance under
this Agreement has been made under such officer's supervision, and (ii) to such
officer's knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement throughout such period, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, the Backup Servicer, the Security Insurer, the Collateral Agent, and
each Rating Agency, promptly after having obtained knowledge thereof, but in no
event
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later than two 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 Termination Event under Section 8.1(a). The
Seller or the Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, the Backup Servicer, the Security Insurer, the Collateral Agent, the
Servicer or the Seller (as applicable) and each Rating Agency promptly after
having obtained knowledge thereof, but in no event later than two Business Days
thereafter, written notice in an officer's certificate of any event which with
the giving of notice or lapse of time, or both, would become a Servicer
Termination Event under any other clause of Section 8.1.
SECTION 3.11. ANNUAL INDEPENDENT ACCOUNTANTS' REPORT.
(a) The Servicer shall cause a firm of nationally recognized
independent certified public accountants (the "Independent Accountants"), who
may also render other services to the Servicer or to the Seller, to deliver
to the Owner Trustee, the Indenture Trustee, the Backup Servicer, the
Security Insurer and each Rating Agency, on or before March 31 (or 90 days
after the end of the Servicer's fiscal year, if other than December 31) of
each year, beginning on March 31, 1998, with respect to the twelve months
ended the immediately preceding December 31 (or other applicable date) (or
such other period as shall have elapsed from the Closing Date to the date of
such certificate), a statement (the "Accountant's Report") addressed to the
Board of Directors of the Servicer, to the Owner Trustee, the Indenture
Trustee, the Backup Servicer and to the Security Insurer, to the effect that
such firm has audited the financial statements of the Servicer and issued its
report thereon and that such audit was made in accordance with generally
accepted auditing standards, and accordingly included such tests of the
accounting records and such other auditing procedures as such firm considered
necessary in the circumstances, including procedures as determined by the
Independent Accountants related to (1) the documents and records concerning
the servicing of automobile installment sales contracts under pooling and
servicing agreements and sale and servicing agreements substantially similar
one to another (such statement to have attached thereto a schedule setting
forth the pooling and servicing agreements and sale and servicing agreements
covered thereby, including this Agreement); and (2) the delinquency and loss
statistics relating to the Servicer's portfolio of automobile installment
sales contracts; and except as described in the statement, disclosed no
exceptions or errors in the records relating to automobile and light truck
loans serviced for others that, in the firm's opinion, generally accepted
auditing standards requires such firm to report. The Accountants' Report
shall further state that (1) a review in accordance with agreed upon
procedures was made of three randomly selected Servicer's Certificates for
each Trust and (2) except as disclosed in the Report, no exceptions or errors
in the Servicer's Certificates so examined were found.
(b) The Accountants' Report shall also indicate that the firm is
independent of the Seller and the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
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(c) A copy of the Accountants' Report may be obtained by any
Certificateholder or Noteholder (or by any Certificate Owner or Note Owner, upon
certification that such Person is a Certificate Owner or Note Owner and payment
of any expenses associated with the distribution thereof) by a request in
writing to the Indenture Trustee addressed to the Corporate Trust Office.
SECTION 3.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING RECEIVABLES. The Servicer shall provide to representatives of the
Owner Trustee, Indenture Trustee, the Backup Servicer and the Security Insurer
reasonable access to the documentation regarding the Receivables. The Servicer
shall provide such access to any Certificateholder or Noteholder (or Certificate
Owner or Note Owner) only in such cases where the Servicer is required by
applicable statutes or regulations (whether applicable to the Servicer or to
such Certificateholder or Certificate Owner or Noteholder or Note Owner) to
permit such Certificateholder or Noteholder (or Certificate Owner or Note Owner)
to review such documentation. In each case, such access shall be afforded
without charge but only upon reasonable request and during normal business
hours. Nothing in this Section shall derogate from 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 as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section. Any Certificateholder or Noteholder (or Certificate
Owner or Note Owner), by its acceptance of a Certificate or Note (or by
acquisition of its beneficial interest therein), as applicable, shall be deemed
to have agreed to keep confidential and not to use for its own benefit any
information obtained by it pursuant to this Section, except as may be required
by applicable law.
SECTION 3.13. MONTHLY TAPE. On or before the third Business Day, but
in no event later than the fifth calendar day, of each month, the Servicer will
deliver to the Indenture Trustee and the Backup Servicer a computer tape and a
diskette (or any other electronic transmission acceptable to the Indenture
Trustee and the Backup Servicer) in a format acceptable to the Indenture Trustee
and the Backup Servicer containing the information with respect to the
Receivables as of the preceding Accounting Date necessary for preparation of the
Servicer's Certificate relating to the immediately succeeding Determination Date
and necessary to determine the application of collections as provided in Section
4.3. The Backup Servicer shall use such tape or diskette (or other electronic
transmission acceptable to the Indenture Trustee and the Backup Servicer) to
verify the Servicer's Certificate delivered by the Servicer, and the Backup
Servicer shall certify to the Security Insurer that it has verified the
Servicer's Certificate in accordance with this Section 3.13 and shall notify the
Servicer and the Security Insurer of any discrepancies, in each case, on or
before the second Business Day following the Determination Date. In the event
that the Backup Servicer reports any discrepancies, the Servicer and the Backup
Servicer shall attempt to reconcile such discrepancies prior to the related
Deficiency Claim Date, but in the absence of a reconciliation, the Servicer's
Certificate shall control for the purpose of calculations and distributions with
respect to the related Distribution Date. In the event that the Backup Servicer
and the
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Servicer are unable to reconcile discrepancies with respect to a Servicer's
Certificate by the related Distribution Date, the Servicer shall cause the
Independent Accountants, at the Servicer's expense, to audit the Servicer's
Certificate and, prior to the third Business Day, but in no event later than the
fifth calendar day, of the following month, reconcile the discrepancies. The
effect, if any, of such reconciliation shall be reflected in the Servicer's
Certificate for such next succeeding Determination Date. In addition, the
Servicer shall, if so requested by the Security Insurer (unless an Insurer
Default shall have occurred and be continuing) deliver to the Backup Servicer
its Collection Records and its Monthly Records within one Business Day of demand
therefor and a computer tape containing as of the close of business on the date
of demand all of the data maintained by the Servicer in computer format in
connection with servicing the Receivables. Other than the duties specifically
set forth in this Agreement, the Backup Servicer shall have no obligations
hereunder, including, without limitation, to supervise, verify, monitor or
administer the performance of the Servicer. The Backup Servicer shall have no
liability for any actions taken or omitted by the Servicer. The duties and
obligations of the Backup Servicer shall be determined solely by the express
provisions of this Agreement and no implied covenants or obligations shall be
read into this Agreement against the Backup Servicer.
SECTION 3.14. RETENTION AND TERMINATION OF SERVICER. The Servicer
hereby covenants and agrees to act as such under this Agreement for an initial
term, commencing on the Closing Date and ending on March 31, 1997, which term
shall be extendible by the Security Insurer for successive quarterly terms
ending on each successive June 30, September 30, December 31 and March 31 (or,
pursuant to revocable written standing instructions from time to time to the
Servicer, the Indenture Trustee and the Owner Trustee, for any specified number
of terms greater than one), until the termination of the Trust. Each such
notice (including each notice pursuant to standing instructions, which shall be
deemed delivered at the end of successive quarterly terms for so long as such
instructions are in effect) (a "Servicer Extension Notice") shall be delivered
by the Security Insurer to the Owner Trustee, the Indenture Trustee and the
Servicer. The Servicer hereby agrees that, as of the date hereof and upon its
receipt of any such Servicer Extension Notice, the Servicer shall become bound,
for the initial term beginning on the Closing Date and for the duration of the
term covered by such Servicer Extension Notice, to continue as the Servicer
subject to and in accordance with the other provisions of this Agreement. Until
such time as an Insurer Default shall have occurred and be continuing, the
Indenture Trustee agrees that if as of the fifteenth day prior to the last day
of any term of the Servicer the Indenture Trustee shall not have received any
Servicer Extension Notice from the Security Insurer, the Indenture Trustee will,
within five days thereafter, give written notice of such non-receipt to the
Owner Trustee, the Security Insurer and the Servicer.
SECTION 3.15. FIDELITY BOND. The Servicer shall maintain a fidelity
bond in such form and amount as is customary for entities acting as custodian of
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funds and documents in respect of consumer contracts on behalf of institutional
investors.
SECTION 3.16. DUTIES OF THE SERVICER UNDER THE INDENTURE. The
Servicer shall, and hereby agrees that it will, perform on behalf of the Trust
and the Owner Trustee the following duties of the Trust or the Owner Trustee, as
applicable, under the Indenture (references are to the applicable Sections in
the Indenture):
(a) the direction to the Paying Agents, if any, to deposit
moneys with the Indenture Trustee (Section 3.03);
(b) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Indenture Collateral and
each other instrument and agreement included in the Trust Estate (Section
3.04);
(c) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance and
other instruments, in accordance with Section 3.05 of the Indenture,
necessary to protect the Trust Estate (Section 3.05);
(d) the delivery of the Opinion of Counsel on the Closing Date
and the annual delivery of Opinions of Counsel, in accordance with Section
3.06 of the Indenture, as to the Trust Estate, and the annual delivery of
the Officers' Certificate and certain other statements, in accordance with
Section 3.09 of the Indenture, as to compliance with the Indenture
(Sections 3.06 and 3.09);
(e) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.10(b));
(f) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate and the obtaining of the Opinion of Counsel and the
Independent Certificate relating thereto (Section 4.01);
(g) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee and
any written instruments necessary in connection with the resignation or
removal of any co-trustee or separate trustee (Sections 6.08 and 6.10);
(h) the opening of one or more accounts in the Trust's name,
the preparation of Issuer Orders, Officers' Certificates and Opinions of
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Counsel and all other actions necessary with respect to investment and
reinvestment of funds in the Trust Accounts (Sections 8.02 and 8.03);
(i) the preparation of Trust Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures (Sections 9.01, 9.02 and 9.03);
(j) the preparation of all Officers' Certificates, Opinions of
Counsel and Independent Certificates with respect to any requests by the
Issuer to the Indenture Trustee or the Indenture Collateral Agent to take
any action under the Indenture (Section 11.01(a));
(k) the preparation and delivery of Officers' Certificates and
the obtaining of Independent Certificates, if necessary, for the release of
property from the lien of the Indenture (Section 11.01(b)); and
(l) the recording of the Indenture, if applicable (Section
11.15).
In addition to the duties of the Servicer set forth above, the Servicer shall,
and hereby agrees that it will, prepare, distribute and file any reports
required by Section 313(b) of the Trust Indenture Act of 1939, as amended, as a
result of any transfer of Subsequent Receivables. Such distribution and filing
is to be effected by the Servicer's distribution and filing of the Servicer's
Certificate.
SECTION 3.17. DUTIES OF THE SERVICER UNDER THE INSURANCE AGREEMENT.
The Servicer shall, and hereby agrees that it will, perform on behalf of the
Trust and the Owner Trustee the following duties of the Trust under the
Insurance Agreement (references are to the applicable Sections in the Insurance
Agreement):
(a) the maintenance of books and records of accounts of the
Trust's assets and business and the furnishing to the Security Insurer of
reports, certificates, statements, financial statements or notices
furnished to the Indenture Trustee, the Noteholders or the
Certificateholders pursuant to the Related Documents (Section 2.02(b));
(b) the delivery to the Security Insurer and, upon request,
any Noteholder or Certificateholder, of certificates with respect to
compliance with, and other matters under, the Related Documents (Section
2.02(c));
(c) the filing of financing statements, assignments or other
instruments, and amendments or continuation statements relating thereto to
preserve and protect fully the lien and security interest in, and all
rights of the Indenture Trustee and the Security Insurer with respect to,
the Trust Estate (Section 2.02(f));
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(d) the maintenance of licenses, permits, charters and
registrations of the Trust material to the performance by the Trust of its
obligations under the Insurance Agreement and the Related Documents
(Section 2.02(g));
(e) the provision to the Security Insurer of executed original
copies of the documents executed in connection with the closing of the
offering of the Notes and the Certificates (Section 2.02(k)); and
(f) the taking of actions to ensure that the Trust is taxable
as a partnership for federal and state income tax purposes and not as an
association (or publicly traded partnership) taxable as a corporation
(Section 2.02(l)).
SECTION 3.18. CERTAIN DUTIES OF THE SERVICER UNDER THE TRUST
AGREEMENT. The Servicer shall, and hereby agrees that it will, monitor the
Trust's compliance with all applicable provisions of state and federal
securities laws, notify the Trust and the Administrator of any actions to be
taken by the Trust necessary for compliance with such laws and prepare on behalf
of the Trust and the Administrator all notices, filings or other documents or
instruments required to be filed under such laws.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 4.1. TRUST ACCOUNTS.
(a) The Servicer shall establish the Collection Account in the name
of the Indenture Collateral Agent for the benefit of the Certificateholders and
the Issuer Secured Parties (as defined in the Indenture). The Collection
Account shall be an Eligible Account and initially shall be a segregated trust
account established with the Indenture Collateral Agent and maintained with the
Indenture Collateral Agent.
(b) The Servicer shall establish the Pre-Funding Account in the name
of the Indenture Collateral Agent for the benefit of the Certificateholders and
the Issuer Secured Parties. The Pre-Funding Account shall be an Eligible
Account and initially shall be a segregated trust account established with the
Indenture Collateral Agent and maintained with the Indenture Collateral Agent.
(c) The Servicer shall establish the Note Distribution Account in the
name of the Indenture Collateral Agent for the benefit of the Issuer Secured
Parties. The Note Distribution Account shall be an Eligible Account and
initially
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shall be a segregated trust account established with the Indenture Collateral
Agent and maintained with the Indenture Collateral Agent.
(d) The Servicer shall establish the Reserve Account (including the
Class A-1 Holdback Subaccount) in the name of the Indenture Collateral Agent for
the benefit of the Certificateholders and the Issuer Secured Parties. The
Reserve Account shall be an Eligible Account and initially shall be a segregated
trust account established with the Indenture Collateral Agent and maintained
with the Indenture Collateral Agent.
(e) All amounts held in the Collection Account, the Pre-Funding
Account, the Note Distribution Account and the Reserve Account (collectively,
the "Trust Accounts") shall, to the extent permitted by applicable laws,
rules and regulations, be invested, as directed by the Servicer, in Eligible
Investments that, in the case of amounts held in the Collection Account, the
Note Distribution Account and the Reserve Account, mature not later than one
Business Day prior to the Distribution Date for the Monthly Period to which
such amounts relate, and, in the case of amounts held in the Pre-Funding
Account, mature in such amounts and on such dates, not later than the last
day of the Funding Period, as the Servicer may direct. Any such written
direction shall certify that any such investment is authorized by this
Section 4.1. Investments in Eligible Investments shall be made in the name
of the Indenture Trustee on behalf of the Trust, and such investments shall
not be sold or disposed of prior to their maturity. Any investment of funds
in the Trust Accounts shall be made in Eligible Investments held by a
financial institution in accordance with the following requirements: (a) all
Eligible Investments shall be held in an account with such financial
institution in the name of the Indenture Trustee, (b) with respect to
securities held in such account, such securities shall be (i) certificated
securities (as such term is used in N.Y. UCC Section 8-313(1)(d)(i),
securities deemed to be certificated securities under applicable regulations
of the United States government, or uncertificated securities issued by an
issuer organized under the laws of the State of New York or the State of
Delaware, (ii) either (A) in the possession of such institution, (B) in the
possession of a clearing corporation (as such term is used in N.Y. UCC
Section 8-313(1)(g)) in the State of New York, registered in the name of such
clearing corporation or its nominee, not endorsed for collection or surrender
or any other purpose not involving transfer, not containing any evidence of a
right or interest inconsistent with the Indenture Trustee's security interest
therein, and held by such clearing corporation in an account of such
institution, (C) held in an account of such institution with the Federal
Reserve Bank of New York or the Federal Reserve Bank of Minneapolis, or (D)
in the case of uncertificated securities, issued in the name of such
institution, and (iii) identified, by book entry or otherwise, as held for
the account of, or pledged to, the Indenture Trustee on the records of such
institution, and such institution shall have sent the Indenture Trustee a
confirmation thereof, (c) with respect to repurchase obligations held in such
account, such repurchase obligations shall be identified by such institution,
by book entry or otherwise, as held for the account of, or pledged to, the
Indenture Trustee on the records of such institution, and the
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related securities shall be held in accordance with the requirements of clause
(b) above, and (d) with respect to other Eligible Investments other than
securities and repurchase agreements, such Eligible Investments shall be held in
a manner acceptable to the Indenture Collateral Agent. Subject to the other
provisions hereof, the Indenture Collateral Agent shall have sole control over
each such investment and the income thereon, and any certificate or other
instrument evidencing any such investment, if any, shall be delivered directly
to the Indenture Collateral Agent or its agent, together with each document of
transfer, if any, necessary to transfer title to such investment to the
Indenture Collateral Agent in a manner which complies with this Section 4.1.
All interest, dividends, gains upon sale and other income from, or earnings on,
investments of funds in the Trust Accounts shall be deposited in the Collection
Account and distributed on the next Distribution Date pursuant to Section 4.6.
The Servicer shall deposit in the applicable Trust Account an amount equal to
any net loss on such investments immediately as realized.
(f) On the Closing Date, the Servicer shall deposit in the Collection
Account (i) all Scheduled Payments and prepayments of Initial Receivables
received by the Servicer after the Initial Cutoff Date and on or prior to the
Business Day immediately preceding the Closing Date or received by the Lockbox
Bank after the Initial Cutoff Date and on or prior to the second Business Day
immediately preceding the Closing Date and (ii) all Liquidation Proceeds and
proceeds of Insurance Policies realized in respect of a Financed Vehicle and
applied by the Servicer after the Initial Cutoff Date. On each Subsequent
Transfer Date, the Servicer shall deposit in the Collection Account (x) all
Scheduled Payments and prepayments of the related Subsequent Receivables
received by the Servicer after the related Subsequent Cutoff Date and on or
prior to the Business Day immediately preceding the related Subsequent Transfer
Date or received by the Lockbox Bank after the related Subsequent Cutoff Date
and on or prior to the second Business Day immediately preceding the related
Subsequent Transfer Date and (y) all Liquidation Proceeds and proceeds of
Insurance Policies related in respect of a Financed Vehicle and applied by the
Servicer after the related Subsequent Cutoff Date.
SECTION 4.2. COLLECTIONS.
(a) The Servicer shall establish the Subcollection Account in the
name of the Indenture Trustee for the benefit of the Certificateholders and the
Noteholders. The Subcollection Account shall be an Eligible Account satisfying
clause (ii) of the definition of "Eligible Account," and shall initially be
established with the Indenture Trustee. The Servicer shall remit directly to
the Subcollection Account without deposit into any intervening account all
payments by or on behalf of the Obligors on the Receivables and all Liquidation
Proceeds received by the Servicer, in each case, as soon as practicable, but in
no event later than the Business Day after receipt thereof. Within two days of
deposit of payments into the Subcollection Account, the Indenture Trustee shall
transfer all amounts credited to the Subcollection Account on account of such
payments to the Collection Account. Amounts in the Subcollection Account shall
not be invested. Notwithstanding the
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foregoing, the Servicer may utilize an alternative remittance schedule
acceptable to the Servicer if the Security Insurer consents in writing (so long
as an Insurer Default shall not have occurred and be continuing) and the
Servicer provides to the Indenture Trustee written confirmation from each Rating
Agency that such alternative remittance schedule will not result in the
downgrading or withdrawal by the Rating Agency of the rating then assigned to
the Certificates or the Notes.
(b) Notwithstanding the provisions of subsection (a) hereof, the
Servicer will be entitled to be reimbursed from amounts on deposit in the
Collection Account with respect to a Monthly Period for amounts previously
deposited in the Collection Account but later determined by the Servicer or the
Lockbox Bank to have resulted from mistaken deposits or postings or checks
returned for insufficient funds. The amount to be reimbursed hereunder shall be
paid to the Servicer on the related Distribution Date pursuant to Section
4.6(iii) upon certification by the Servicer of such amounts and the provision of
such information to the Indenture Trustee and the Security Insurer as may be
necessary in the opinion of the Indenture Trustee and the Security Insurer to
verify the accuracy of such certification. In the event that the Security
Insurer has not received evidence satisfactory to it of the Servicer's
entitlement to reimbursement pursuant to this Section 4.2(b), the Security
Insurer shall (unless an Insurer Default shall have occurred and be continuing)
give the Indenture Trustee notice to such effect, following receipt of which the
Indenture Trustee shall not make a distribution to the Servicer in respect of
such amount pursuant to Section 4.6, or if the Servicer prior thereto has been
reimbursed pursuant to Section 4.6 or Section 4.8, the Indenture Trustee shall
withhold such amounts from amounts otherwise distributable to the Servicer on
the next succeeding Distribution Date.
SECTION 4.3. APPLICATION OF COLLECTIONS. For the purposes of this
Agreement, all collections for a Monthly Period shall be applied by the Servicer
as follows:
(a) With respect to each Receivable, payments by or on behalf
of the Obligor thereof (other than of Supplemental Servicing Fees with
respect to such Receivable, to the extent collected) shall be applied to
interest and principal with respect to such Receivable in accordance with
the terms of such Receivable. With respect to each Liquidated Receivable,
Liquidation Proceeds shall be applied to interest and principal with
respect to such Receivable in accordance with the terms of such Receivable,
and then to any Insurance Add-On Amount due and payable with respect to
such Receivable. The Servicer shall not be entitled to any Supplemental
Servicing Fees with respect to a Liquidated Receivable.
(b) With respect to each Receivable that has become a
Purchased Receivable on any Deposit Date, the Purchase Amount shall be
applied, for purposes of this Agreement only, to interest and principal on
the Receivable in accordance with the terms of the Receivable as if the
Purchase
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Amount had been paid by the Obligor on the Accounting Date. The Servicer
shall not be entitled to any Supplemental Servicing Fees with respect to
such a Receivable. Nothing contained herein shall relieve any Obligor of
any obligation relating to any Receivable.
(c) All amounts collected that are payable to the Servicer as
Supplemental Servicing Fees hereunder shall be deposited in the Collection
Account and paid to the Servicer in accordance with Section 4.6(iii).
(d) All payments by or on behalf of an Obligor received with
respect to any Purchased Receivable after the Accounting Date immediately
preceding the Deposit Date on which the Purchase Amount was paid by the
Seller, OFL or the Servicer shall be paid to the Seller, OFL or the
Servicer, respectively, and shall not be included in the Available Funds.
SECTION 4.4. MONTHLY ADVANCES.
(a) If with respect to a Receivable, the amount deposited into the
Collection Account during a Monthly Period in respect of such Receivable and
allocable to interest (determined in accordance with Section 4.3) is less than
an amount of interest equal to interest accrued on such Receivable (for the
number of calendar days in such Monthly Period) (calculated according to the
method specified in the related retail installment sale contract or promissory
note at the APR on the Principal Balance of such Receivable as of the Accounting
Date preceding such Distribution Date), the Servicer shall make a Monthly
Advance equal to the amount of such shortfall; PROVIDED, HOWEVER, that the
Servicer shall not be required to make a Monthly Advance with respect to a
Receivable extended pursuant to Section 3.2(b) for any Monthly Period during
which no Scheduled Payment is due according to the terms of such extension; and
PROVIDED FURTHER, that the Servicer shall not be required to make a Monthly
Advance with respect to a Receivable that is less than 31 days delinquent.
(b) On or before each Determination Date and prior to the delivery of
the Servicer's Certificate for such Determination Date pursuant to Section 3.9,
the Servicer shall deposit in the Collection Account the aggregate amount of
Monthly Advances required for the related Monthly Period in immediately
available funds (subject to Section 4.8).
(c) The Servicer shall be entitled to be reimbursed for Outstanding
Monthly Advances with respect to a Receivable pursuant to Section 4.6(i) or
pursuant to Section 4.8 from the following sources with respect to such
Receivable on any day subsequent to the Distribution Date in respect of which
such Monthly Advance was made: (i) subsequent payments by or on behalf of the
Obligor with respect to such Receivable, (ii) collections of Liquidation
Proceeds with respect to such Receivable if such Receivable becomes a
Liquidated Receivable and (iii) payment of any Purchase Amount with respect
to such Receivable if such
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Receivable becomes a Purchased Receivable. If any Receivable shall become a
Liquidated Receivable and the Servicer shall not have been fully reimbursed for
Outstanding Monthly Advances with respect to such Receivable from the sources of
funds previously described in this paragraph, the Servicer shall be entitled to
reimbursement from collections on Receivables other than the Receivable in
respect of which such Outstanding Monthly Advance shall have been made.
SECTION 4.5. ADDITIONAL DEPOSITS. On or before each Deposit Date,
the Servicer or OFL shall deposit in the Collection Account the aggregate
Purchase Amounts with respect to Administrative Receivables and Warranty
Receivables, respectively. All such deposits of Purchase Amounts shall be made
in immediately available funds. On or before each Draw Date, the Indenture
Trustee shall deposit in the Collection Account any amounts delivered to the
Indenture Trustee by the Collateral Agent.
SECTION 4.6. DISTRIBUTIONS. On each Distribution Date, the Indenture
Trustee shall (based on the information contained in the Servicer's Certificate
delivered on the related Determination Date) distribute the following amounts
and in the order of priority specified below. Within each order of priority,
amounts shall be deemed withdrawn first from Available Funds, second from the
Reserve Account and third from any Deficiency Claim Amounts.
(i) first, from the Distribution Amount, (A) to the Trust for
payment of any taxes due and unpaid with respect to the Trust, to the
extent such taxes have not been previously paid by OFL or by the Servicer
pursuant to Section 3.8, and (B) then to the Servicer, the amount of
Outstanding Monthly Advances for which the Servicer is entitled to be
reimbursed pursuant to Section 4.4(c) and for which the Servicer has not
previously been reimbursed pursuant to Section 4.8;
(ii) second, from the Distribution Amount then remaining on
deposit in the Collection Account, to the Owner Trustee, any accrued and
unpaid fees of the Owner Trustee in accordance with the Trust Agreement and
including amounts with respect to which the Administrator is entitled to be
reimbursed pursuant to the Administration Agreement; to the Indenture
Trustee, any accrued and unpaid fees of the Indenture Trustee in accordance
with the Indenture; to any Lockbox Bank, Custodian, Backup Servicer,
Collateral Agent, Indenture Collateral Agent or Administrator (including
the Owner Trustee or Indenture Trustee if acting in any such additional
capacity), any accrued and unpaid fees (in each case, to the extent such
Person has not previously received such amount from the Servicer or OFL),
to the Backup Servicer, any transition expenses (not to exceed $50,000) in
accordance with Section 8.3; PROVIDED, HOWEVER, in the event that the
rating assigned by Standard & Poor's to the claims-paying ability of the
Security Insurer is not AAA, the accrued and unpaid fees of the Owner
Trustee, the Indenture Trustee, the Backup Servicer, the Collateral Agent,
the Indenture Collateral
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Agent and the Administrator shall be distributed pursuant to this clause
(ii) to the extent such fees are not in excess of the amount (the "Servicer
Fee Threshold") obtained by dividing (x) .20% of the Aggregate Principal
Balance by (y) twelve, and any accrued and unpaid fees in excess of the
Servicer Fee Threshold remaining to be distributed pursuant to this clause
(ii) shall not be distributed pursuant to this clause (ii) but shall be
distributed after the distributions to be made pursuant to clause (v) below
but before the distributions to be made pursuant to clause (vi) below;
(iii) third, from the Distribution Amount then remaining on
deposit in the Collection Account, to the Servicer, the Basic Servicing Fee
for the related Monthly Period, any Supplemental Servicing Fees for the
related Monthly Period, and any amounts specified in Section 4.2(b), to the
extent the Servicer has not reimbursed itself in respect of such amounts
pursuant to Section 4.8;
(iv) fourth, from the Distribution Amount then remaining on
deposit in the Collection Account, to the Note Distribution Account, an
amount equal to the Noteholders' Interest Distributable Amount for such
Distribution Date;
(v) fifth, from the Distribution Amount then remaining on
deposit in the Collection Account, to the Note Distribution Account, an
amount equal to the Noteholders' Principal Distributable Amount for such
Distribution Date;
(vi) sixth, from the Distribution Amount then remaining on
deposit in the Collection Account, to the Certificate Distribution Account,
an amount equal to the Certificateholders' Interest Distributable Amount
for such Distribution Date;
(vii) seventh, from the Distribution Amount then remaining on
deposit in the Collection Account, to the Certificate Distribution Account,
an amount equal to the Certificateholders' Principal Distributable Amount
for such Distribution Date;
(viii) eighth, from the Distribution Amount then remaining on
deposit in the Collection Account, to the Security Insurer, to the extent
of any amounts owing to the Security Insurer under the Insurance Agreement
and not paid, whether or not OFL is also obligated to pay such amounts,
such amounts representing a portion of the Credit Enhancement Fee otherwise
payable on a subordinated basis to the Seller; and
(ix) ninth, any remaining Available Funds to the Collateral
Agent for deposit in the Spread Account, such amounts representing a
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portion of the Credit Enhancement Fee payable on a subordinated basis to
the Seller.
SECTION 4.7. PRE-FUNDING ACCOUNT.
(a) On the Closing Date, the Indenture Trustee will deposit, on
behalf of the Seller, in the Pre-Funding Account $195,396,126.43 from the
proceeds of the sale of the Notes and the Certificates. On each Subsequent
Transfer Date, the Servicer shall instruct the Indenture Trustee:
(i) to withdraw from the Pre-Funding Account the Spread
Account Additional Deposit, if any, on such Subsequent Transfer Date, and
to deliver such funds to the Collateral Agent for deposit in the Spread
Account,
(ii) to withdraw from the Pre-Funding Account the amount, if
any, by which the Requisite Reserve Amount for such Subsequent Transfer
Date exceeds the Reserve Amount, and to deposit such funds in the Reserve
Account,
(iii) to withdraw from the Pre-Funding Account the Class A-1
Holdback Amount, if any, for such Subsequent Transfer Date, and to deposit
such funds in the Class A-1 Holdback Subaccount,
(iv) to withdraw from the Pre-Funding Account the amount, if
any, on deposit therein in excess of the remaining Prefunded Amount, after
giving effect to the withdrawals specified in clauses (i)-(iii) above, and
to distribute such amount to or upon the order of the Seller upon
satisfaction of the conditions set forth in Section 2.4 with respect to
such transfer, and
(v) to withdraw from the Reserve Account an amount equal to
the excess, if any, of the Reserve Amount (after giving effect to
withdrawals from the Reserve Account pursuant to Section 5.1 on the
immediately following Distribution Date, if such Subsequent Transfer Date
falls between a Determination Date and the related Distribution Date) over
the Requisite Reserve Amount for such Subsequent Transfer Date and to
distribute such amount to or upon the order of the General Partners.
(b) If (x) the Pre-Funded Amount has not been reduced to zero on the
Distribution Date on or immediately following the end of the Funding Period)
or (y) the Pre-Funded Amount has been reduced to $100,000 or less on any
Distribution Date, in either case after giving effect to any reductions in
the Pre-Funded Amount on such Distribution Date pursuant to paragraph(a)
above, the Servicer shall provide written instructions to the Indenture
Trustee to withdraw from the Pre-Funding Account on such Distribution Date
(i) an amount equal to the sum of the Class A-1 Prepayment Amount, the Class
A-2 Prepayment Amount, the Class A-3 Prepayment Amount, the Class A-4
Prepayment Amount and the Class
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A-5 Prepayment Amount and deposit such amount in the Note Distribution Account,
and (ii) an amount equal to the Certificate Prepayment Amount and deposit such
amount in the Certificate Distribution Account. Any remaining funds on deposit
in the Pre-Funding Account shall be distributed to the General Partners. If the
funds on deposit in the Pre-Funding Account are less than the sum of the amounts
described in clauses (i) and (ii) above, then the Servicer shall provide written
instructions to the Indenture Trustee to withdraw the funds on deposit in the
Pre-Funding Account and deposit such funds in the Note Distribution Account,
Certificate Distribution Account and Collection Account, pro rata in accordance
with the amounts specified in clauses (i) and (ii) above.
(c) If the Pre-Funded Amount is greater than $100,000 at the end of
the Funding Period, the Seller will (x) deposit into the Note Distribution
Account an amount equal to the sum of the Class A-1 Prepayment Premium, the
Class A-2 Prepayment Premium, the Class A-3 Prepayment Premium, the Class A-4
Prepayment Premium and the Class A-5 Prepayment Premium and (y) deposit into the
Certificate Distribution Account an amount equal to the Certificate Prepayment
Premium; PROVIDED, HOWEVER, that the obligation of the Seller to make the
deposits referred to in this sentence is expressly limited to the extent of the
amount of Liquidated Damages (as defined in the Closing Date Purchase Agreement)
paid to the Seller by OFL and by the Seller to the Trust.
SECTION 4.8. NET DEPOSITS. Subject to payment by the Servicer of
amounts otherwise payable pursuant to Section 4.6(ii) and provided that no
Servicer Termination Event shall have occurred and be continuing with respect to
such Servicer, the Servicer may make the remittances to be made by it pursuant
to Sections 4.2, 4.4 and 4.5 net of amounts (which amounts may be netted prior
to any such remittance for a Monthly Period) to be distributed to it pursuant to
Sections 3.8, 4.2(b) and 4.6(i); PROVIDED, HOWEVER, that the Servicer shall
account for all of such amounts in the related Servicer's Certificate as if such
amounts were deposited and distributed separately; and, PROVIDED, FURTHER, that
if an error is made by the Servicer in calculating the amount to be deposited or
retained by it, with the result that an amount less than required is deposited
in the Collection Account, the Servicer shall make a payment of the deficiency
to the Collection Account, immediately upon becoming aware, or receiving notice
from the Indenture Trustee, of such error.
SECTION 4.9. STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS.
(a) On each Distribution Date, the Owner Trustee shall include with
each distribution to each Certificateholder, the Servicer's Certificate (which
statement shall also have been provided to the Security Insurer and to each
Rating Agency by the Servicer) delivered on the related Determination Date
pursuant to Section 3.9, setting forth for the Monthly Period relating to such
Distribution Date the following information:
(i) the amount of such distribution allocable to principal;
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(ii) the amount of such distribution allocable to interest;
(iii) the amount of such distribution payable out of amounts
withdrawn from the Reserve Account or the Spread Account or pursuant to a
claim on the Certificate Policy;
(iv) the Certificate Balance and the remaining balance of each
class of Notes (after giving effect to distributions made on such
Distribution Date);
(v) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall, the Class A-3 Interest Carryover Shortfall,
the Class A-4 Interest Carryover Shortfall, the Class A-5 Interest
Carryover Shortfall, the Noteholders' Principal Carryover Shortfall, the
Certificateholders' Interest Carryover Shortfall and the
Certificateholders' Principal Carryover Shortfall, if any, and the change
in such amounts from the preceding statement;
(vi) the amount of fees paid by the Trust with respect to such
Monthly Period;
(vii) for Distribution Dates during the Funding Period, the
remaining Pre-Funded Amount and the remaining Reserve Amount;
(viii) for the Distribution Date on or immediately following the
end of the Funding Period, the Certificate Prepayment Amount, the
Certificate Prepayment Premium, if any, and the remaining Reserve Amount
that has not been distributed pursuant to Section 4.6 or to the General
Partners; and
(ix) the Certificate Pool Factor (after giving effect to
distributions made on such Distribution Date).
Each amount set forth pursuant to subclauses (i) through (iv) above may be
expressed as a dollar amount per $1,000 of original principal balance of a
Certificate.
(b) On each Payment Date, the Indenture Trustee shall include with
each distribution to each Noteholder, the Servicer's Certificate (which
statement shall also have been provided to the Security Insurer and to each
Rating Agency by the Servicer) delivered on the related Determination Date
pursuant to Section 3.9, setting forth for the Monthly Period relating to such
Payment Date the following information with respect to each class of Notes:
(i) the amount of such distribution allocable to principal;
(ii) the amount of such distribution allocable to interest;
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(iii) the amount of such distribution payable out of amounts
withdrawn from the Reserve Account, the Class A-1 Holdback Subaccount, the
Spread Account or pursuant to a claim on the Note Policy;
(iv) the outstanding principal balance of the Notes and the
Certificate Balance (after giving effect to distributions made on such
Payment Date);
(v) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall, the Class A-3 Interest Carryover Shortfall,
the Class A-4 Interest Carryover Shortfall, the Class A-5 Interest
Carryover Shortfall, the Noteholders' Principal Carryover Shortfall, the
Certificateholders' Interest Carryover Shortfall and the
Certificateholders' Principal Carryover Shortfall, if any, and the change
in such amounts from the preceding statement;
(vi) the amount of fees paid by the Trust with respect to such
Monthly Period;
(vii) for Payment Dates during the Funding Period, the remaining
Pre-Funded Amount, the remaining Reserve Amount and the amount on deposit
in the Class A-1 Holdback Subaccount;
(viii) for the Payment Date on or immediately following the end
of the Funding Period, the Class A-1 Prepayment Amount, the Class A-2
Prepayment Amount, the Class A-3 Prepayment Amount, the Class A-4
Prepayment Amount, the Class A-5 Prepayment Amount, the Class A-1
Prepayment Premium, the Class A-2 Prepayment Premium, the Class A-3
Prepayment Premium, the Class A-4 Prepayment Premium and the Class A-5
Prepayment Premium, if any, and the remaining Reserve Amount that has not
been distributed pursuant to Section 4.6 or to the General Partners; and
(ix) the Note Pool Factor with respect to each class of Notes
(after giving effect to distributions made on such Payment Date).
Each amount set forth pursuant to subclauses (i) through (iv) above may be
expressed as a dollar amount per $1,000 of original principal balance of a Note.
(c) Certificate Owners may obtain copies of the certificates
delivered by the Owner Trustee pursuant to subsection (a) above upon written
request to the Owner Trustee at the Corporate Trust Office (together with a
certification that such Person is a Certificate Owner and payment of any
expenses associated with the distribution thereof). Note Owners may obtain
copies of the statements delivered by the Indenture Trustee pursuant to
subsection (b) above upon written request to the Indenture Trustee at its
Corporate Trust Office (together with a certification that
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such Person is a Note Owner and payment of any expenses associated with the
distribution thereof).
SECTION 4.10. INDENTURE TRUSTEE AS AGENT. The Indenture Trustee, in
holding all funds in the Trust Accounts and in making distributions as provided
in this Agreement, shall act solely on behalf of and as agent for the
Certificateholders and the Noteholders.
SECTION 4.11. ELIGIBLE ACCOUNTS. Any account which is required to be
established as an Eligible Account pursuant to this Agreement and which ceases
to be an Eligible Account shall within five Business Days (or such longer
period, not to exceed 30 days, as to which each Rating Agency and the Security
Insurer may consent) be established as a new account which shall be an Eligible
Account and any cash and/or any investments shall be transferred to such new
account.
ARTICLE V
THE RESERVE ACCOUNT; THE SPREAD ACCOUNT
AND THE CERTIFICATE POLICY
SECTION 5.1. WITHDRAWALS FROM THE RESERVE ACCOUNT.
(a) In the event that the Servicer's Certificate with respect to
any Determination Date shall state that the amount of Available Funds with
respect to such Determination Date is less than the sum of the amounts
payable on the related Distribution Date pursuant to clauses (i) through
(viii) of Section 4.6, then on the Draw Date immediately preceding such
Distribution Date, the Indenture Trustee shall (i) withdraw amounts on
deposit in the Reserve Account, other than any funds in the Class A-1
Holdback Subaccount (up to the amount by which the amounts payable on the
related Distribution Date pursuant to clauses (i) through (viii) of Section
4.6 exceed the amount of Available Funds with respect to such Determination
Date) and (ii) deposit the amounts so withdrawn from the Reserve Account into
the Collection Account. On each Distribution Date, any funds on deposit in
the Reserve Account (other than funds on deposit in the Class A-1 Holdback
Subaccount) in excess of the Requisite Reserve Amount (after giving effect to
any withdrawals on the immediately preceding Draw Date as described above)
shall be paid to the General Partners.
(b) In the event that the Servicer's Certificate with respect to
the Determination Date related to the Class A-1 Final Scheduled Distribution
Date shall state that the unpaid principal balance of the Class A-1 Notes
(after giving effect to the distribution of the Available Funds pursuant to
clauses (i)-(v) of Section 4.6 for such Distribution Date), is greater than
zero, then on the Draw Date immediately preceding such Distribution Date the
Indenture Trustee shall withdraw an amount equal to such unpaid principal
balance from funds on deposit in the Class A-1
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Holdback Subaccount (or the amount of funds on deposit in the Class A-1
Holdback Subaccount, if less) and deposit such funds in the Note Distribution
Account for distribution to the Class A-1 Noteholders on such Distribution
Date. Funds in the Class A-1 Holdback Subaccount shall not be available to
pay any other amounts. Any funds remaining in the Class A-1 Holdback
Subaccount, after withdrawal of any such amount on the Class A-1 Final
Scheduled Distribution Date, shall be released to the General Partners.
SECTION 5.2. WITHDRAWALS FROM SPREAD ACCOUNT.
(a) In the event that the Servicer's Certificate with respect to
any Determination Date shall state that the Deficiency Claim Amount (as
defined below) with respect to the related Distribution Date is greater than
zero, then on the Deficiency Claim Date immediately preceding such
Distribution Date, the Indenture Trustee shall deliver to the Collateral
Agent, the Security Insurer, the Fiscal Agent, if any, the Owner Trustee and
the Servicer, by hand delivery, telex or facsimile transmission, a written
notice (a "Deficiency Notice"). Such Deficiency Notice shall direct the
Collateral Agent to remit such Deficiency Claim Amount (to the extent of the
funds available to be distributed pursuant to the Spread Account Agreement)
to the Indenture Trustee for deposit in the Collection Account. The
"Deficiency Claim Amount" with respect to any Distribution Date shall equal
the excess, if any, of
(i) the amount required to be distributed pursuant to clauses
(i)-(viii) of Section 4.6 (without giving effect to the limitation of the
Distribution Amount specified in each such clause) over
(ii) the sum of (A) the Actual Funds with respect to such
Distribution Date, plus (B) if such Distribution Date is the Class A-1
Final Scheduled Distribution Date, the amount, if any, withdrawn from
the Class A-1 Holdback Subaccount and deposited in the Note Distribution
Account pursuant to Section 5.1(b).
(b) Any Deficiency Notice shall be delivered by 10:00 a.m., New
York City time, on the fourth Business Day preceding such Distribution Date.
The amounts distributed by the Collateral Agent to the Indenture Trustee
pursuant to a Deficiency Notice shall be deposited by the Indenture Trustee
into the Collection Account pursuant to Section 4.5.
SECTION 5.3. CLAIMS UNDER CERTIFICATE POLICY.
(a) In the event that the Indenture Trustee has delivered a
Deficiency Notice with respect to any Determination Date, the Owner Trustee
shall on the related Draw Date determine the Certificate Policy Claim Amount
(as defined below) for the related Distribution Date. If the Certificate
Policy Claim Amount for such Distribution Date is greater than zero, the
Owner Trustee shall furnish to the Security Insurer no later than 12:00 noon
New York City time on the related Draw
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Date a completed Notice of Claim in the amount of the Certificate Policy
Claim Amount. Amounts paid by the Security Insurer pursuant to a claim
submitted under this Section 5.3(a) shall be deposited by the Owner Trustee
into the Certificate Distribution Account for payment to Certificateholders
on the related Distribution Date. The "Certificate Policy Claim Amount" for
any Distribution Date shall equal the lesser of (i) the sum of the
Certificateholders' Interest Distributable Amount and the Certificateholders'
Principal Distributable Amount for such Distribution Date, and (ii) the
excess, if any, of the amount required to be distributed from the
Distribution Amount pursuant to clauses (i)-(vii) of Section 4.6 (without
giving effect to the limitation of the Distribution Amount specified in each
such clause) over the Distribution Amount with respect to such Payment Date.
(b) Any notice delivered by the Owner Trustee to the Security
Insurer pursuant to subsection 5.3(a) shall specify the Policy Claim Amount
claimed under the Certificate Policy and shall constitute a "Notice of Claim"
under the Certificate Policy. In accordance with the provisions of the
Certificate Policy, the Security Insurer is required to pay to the Owner
Trustee the Policy Claim Amount properly claimed thereunder by 12:00 noon,
New York City time, on the later of (i) the third Business Day following
receipt on a Business Day of the Notice of Claim, and (ii) the applicable
Distribution Date. Any payment made by the Security Insurer under the
Certificate Policy shall be applied solely to the payment of the
Certificates, and for no other purpose.
(c) The Owner Trustee shall (i) receive as attorney-in-fact of each
Certificateholder any Policy Claim Amount from the Security Insurer and (ii)
deposit the same in the Certificate Distribution Account for disbursement to
the Certificateholders as provided in Section 5.2(a) of the Trust Agreement.
Any and all Policy Claim Amounts disbursed by the Owner Trustee from claims
made under the Certificate Policy shall not be considered payment by the
Trust or from the Spread Account with respect to such Certificates, and shall
not discharge the obligations of the Trust with respect thereto. The
Security Insurer shall, to the extent it makes any payment with respect to
the Certificates, become subrogated to the rights of the recipients of such
payments to the extent of such payments. Subject to and conditioned upon any
payment with respect to the Certificates by or on behalf of the Security
Insurer, the Owner Trustee shall assign to the Security Insurer all rights to
the payment of interest or principal with respect to the Certificates which
are then due for payment to the extent of all payments made by the Security
Insurer, and the Security Insurer may exercise any option, vote, right, power
or the like with respect to the Certificates to the extent that it has made
payment pursuant to the Certificate Policy. To evidence such subrogation,
the Certificate Registrar shall note the Security Insurer's rights as
subrogee upon the register of Certificateholders upon receipt from the
Security Insurer of proof of payment by the Security Insurer of any
Certificateholders' Interest Distributable Amount or Certificateholders'
Principal Distributable Amount.
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(d) The Owner Trustee shall keep a complete and accurate record of
all funds delivered by the Security Insurer to the Owner Trustee and the
allocation of such funds to the payment of interest on and principal paid with
respect to any Certificate. The Security Insurer shall have the right to
inspect such records at reasonable times upon one Business Day's prior notice to
the Owner Trustee.
(e) The Owner Trustee shall be entitled to enforce on behalf of the
Certificateholders the obligations of the Security Insurer under the Certificate
Policy. Notwithstanding any other provision of this Agreement, the
Certificateholders are not entitled to institute proceedings directly against
the Security Insurer.
SECTION 5.4. PREFERENCE CLAIMS.
(a) In the event that the Owner Trustee has received a certified copy
of an order of the appropriate court that any Certificateholders' Distributable
Amount paid on a Certificate has been avoided in whole or in part as a
preference payment under applicable bankruptcy law, the Owner Trustee shall so
notify the Security Insurer, shall comply with the provisions of the Certificate
Policy to obtain payment by the Security Insurer of such avoided payment, and
shall, at the time it provides notice to the Security Insurer, notify Holders of
the Certificates by mail that, in the event that any Certificateholder's payment
is so recoverable, such Certificateholder will be entitled to payment pursuant
to the terms of the Certificate Policy. Pursuant to the terms of the
Certificate Policy, the Security Insurer will make such payment on behalf of the
Certificateholder to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy named in the Order (as defined in the Certificate Policy) and not
to the Owner Trustee or any Certificateholder directly (unless a
Certificateholder has previously paid such payment to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy, in which case the Security
Insurer will make such payment to the Owner Trustee for distribution to such
Certificateholder upon proof of such payment reasonably satisfactory to the
Security Insurer).
(b) The Owner Trustee shall promptly notify the Security Insurer of
any proceeding or the institution of any action (of which the Owner Trustee has
actual knowledge) seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership, rehabilitation or similar law
(a "Preference Claim") of any distribution made with respect to the
Certificates. Each Holder, by its purchase of Certificates, and the Owner
Trustee hereby agree that so long as an Insurer Default shall not have occurred
and be continuing, the Security Insurer may at any time during the continuation
of any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim including, without limitation, (i) the direction of any
appeal of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal at the expense
of the Security Insurer, but subject to reimbursement as provided in the
Insurance Agreement. In addition, and without limitation of the foregoing, as
set forth in Section 5.3(c), the Security Insurer shall be subrogated to,
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and each Certificateholder and the Owner Trustee hereby delegate and assign, to
the fullest extent permitted by law, the rights of the Owner Trustee and each
Certificateholder in the conduct of any proceeding with respect to a Preference
Claim, including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with any
such Preference Claim.
ARTICLE VI
THE SELLER
SECTION 6.1. LIABILITY OF SELLER.
(a) The Seller shall be liable hereunder only to the extent of the
obligations in this Agreement specifically undertaken by the Seller and the
representations made by the Seller.
SECTION 6.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER; AMENDMENT OF CERTIFICATE OF INCORPORATION.
(a) The Seller shall not merge or consolidate with any other Person
or permit any other Person to become the successor to the Seller's business
without (so long as an Insurer Default shall not have occurred and be
continuing) the prior written consent of the Security Insurer. The
certificate of incorporation of any corporation (i) into which the Seller may
be merged or consolidated, (ii) resulting from any merger or consolidation to
which the Seller shall be a party, or (iii) succeeding to the business of
Seller, shall contain provisions relating to limitations on business and
other matters substantively identical to those contained in the Seller's
certificate of incorporation. Any such successor corporation shall execute
an agreement of assumption of every obligation of the Seller under this
Agreement and each Related Document and, whether or not such assumption
agreement is executed, shall be the successor to the Seller under this
Agreement without the execution or filing of any document or any further act
on the part of any of the parties to this Agreement. The Seller shall
provide prompt notice of any merger, consolidation or succession pursuant to
this Section 6.2 to the Owner Trustee, the Indenture Trustee, the Security
Insurer and the Rating Agencies. Notwithstanding the foregoing, the Seller
shall not merge or consolidate with any other Person or permit any other
Person to become a successor to the Seller's business, unless (x) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 2.5 shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation
of such transaction) and no event that, after notice or lapse of time, or
both, would become a Servicer Termination Event shall have occurred and be
continuing, (y) the Seller shall have delivered to the Owner Trustee, the
Indenture Trustee and the Security Insurer an officer's certificate and an
Opinion of
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Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 6.2 and that all conditions
precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, and (z) the Seller shall have delivered
to the Owner Trustee, the Indenture Trustee and the Security Insurer an
Opinion of Counsel, stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary to preserve and protect the
interest of the Trust in the Trust Property and reciting the details of the
filings or (B) no such action shall be necessary to preserve and protect such
interest.
(b) The Seller hereby agrees that it shall not (i) take any action
prohibited by Article XVI of its certificate of incorporation or (ii) without
the prior written consent of the Owner Trustee and the Indenture Trustee and
(so long as an Insurer Default shall not have occurred and be continuing) the
Security Insurer and without giving prior written notice to the Rating
Agencies, amend Article III, Article IX, Article XIV or Article XVI of its
certificate of incorporation.
SECTION 6.3. LIMITATION ON LIABILITY OF SELLER AND OTHERS. The
Seller and any director or officer or 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 under this Agreement. The Seller shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its obligations as Seller of the Receivables under this
Agreement and that in its opinion may involve it in any expense or liability.
SECTION 6.4. SELLER MAY OWN CERTIFICATES OR NOTES. Each of the
Seller and any Affiliate of the Seller may in its individual or any other
capacity become the owner or pledgee of Certificates or Notes with the same
rights as it would have if it were not the Seller or an Affiliate thereof
except as otherwise specifically provided herein or in the Related Documents.
Certificates or Notes so owned by or pledged to the Seller or such Affiliate
shall have an equal and proportionate benefit under the provisions of this
Agreement or any Related Document, without preference, priority, or
distinction as among all of the Certificates or Notes, provided that any
Certificates or Notes owned by the Seller or any Affiliate thereof, during
the time such Certificates or Notes are owned by them, shall be without
voting rights for any purpose set forth in this Agreement or any Related
Document. The Seller shall notify the Owner Trustee, the Indenture Trustee
and the Security Insurer promptly after it or any of its Affiliates become
the owner or pledgee of a Certificate or Note.
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ARTICLE VII
THE SERVICER
SECTION 7.1. LIABILITY OF SERVICER; INDEMNITIES.
(a) The Servicer (in its capacity as such and, in the case of OFL,
without limitation of its obligations under the Purchase Agreement) shall be
liable hereunder only to the extent of the obligations in this Agreement
specifically undertaken by the Servicer and the representations made by the
Servicer.
(b) The Servicer shall defend, indemnify and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Backup Servicer, the Security
Insurer, their respective officers, directors, agents and employees, the
Certificateholders and the Noteholders from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation arising out of or resulting from
the use, ownership or operation by the Servicer or any Affiliate thereof of any
Financed Vehicle;
(c) The Servicer shall indemnify, defend and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Backup Servicer, the Security
Insurer, their respective officers, directors, agents and employees, the
Certificateholders and the Noteholders from and against any taxes that may at
any time be asserted against the Trust, the Owner Trustee, the Indenture
Trustee, the Backup Servicer, the Security Insurer, the Certificateholders or
the Noteholders with respect to the transactions contemplated in this Agreement,
including, without limitation, any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but not including any
taxes asserted with respect to, and as of the date of, the sale of the
Receivables and the other Trust Property to the Trust or the issuance and
original sale of the Certificates and the Notes, or federal or other income
taxes arising out of distributions on the Certificates) and costs and expenses
in defending against the same;
(d) The Servicer shall indemnify, defend and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Backup Servicer, the Security
Insurer, their respective officers, directors, agents and employees, the
Certificateholders and the Noteholders 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 the
Trust, the Owner Trustee, the Indenture Trustee, the Backup Servicer, the
Security Insurer, the Certificateholders or the Noteholders through the breach
of this Agreement, 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; and
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(e) The Servicer shall indemnify, defend, and hold harmless the Owner
Trustee, in its individual capacity, its officers, directors, agents and
employees, from and against all costs, taxes (other than income taxes on fees
and expenses payable to the Owner Trustee), expenses, losses, claims, damages
and liabilities arising out of or incurred in connection with the acceptance or
performance of the trusts and duties contained in the Trust Agreement and the
Related Documents, except to the extent that such cost, taxes (other than income
taxes), expense, loss, claim, damage or liability (A) is due to the willful
misfeasance or gross negligence of the Owner Trustee, or (B) arises from the
Owner Trustee's breach of any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement; PROVIDED, HOWEVER, that amounts payable
under this paragraph shall be increased by the amount of income taxes actually
paid by the Owner Trustee in respect of any indemnity payment unless the Owner
Trustee received or can reasonably be expected to receive a tax deduction for
the related loss or cost.
(f) Indemnification under this Article shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Servicer has made any indemnity payments pursuant to this Article and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Servicer, without interest.
(g) OFL, in its individual capacity, hereby acknowledges that the
indemnification provisions in the Purchase Agreement benefiting the Trust, the
Owner Trustee, the Indenture Trustee, the Backup Servicer and the Security
Insurer are enforceable by each hereunder.
SECTION 7.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER OR BACKUP SERVICER.
(a) The Servicer shall not merge or consolidate with any other
person, convey, transfer or lease substantially all its assets as an entirety to
another Person, or permit any other Person to become the successor to the
Servicer's business unless, after the merger, consolidation, conveyance,
transfer, lease or succession, the successor or surviving entity shall be an
Eligible Servicer and shall be capable of fulfilling the duties of the Servicer
contained in this Agreement. Any corporation (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger or consolidation to which
the Servicer shall be a party, (iii) which acquires by conveyance, transfer, or
lease substantially all of the assets of the Servicer, or (iv) succeeding to the
business of the Servicer, in any of the foregoing cases shall execute an
agreement of assumption to perform every obligation of the Servicer under this
Agreement and, whether or not such assumption agreement is executed, shall be
the successor to the Servicer under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties to this
Agreement, anything in this Agreement to the contrary notwithstanding; PROVIDED,
HOWEVER, that nothing contained herein shall be deemed to release the Servicer
from any obligation. The Servicer shall provide notice of any merger,
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consolidation or succession pursuant to this Section 7.2(a) to the Owner
Trustee, the Indenture Trustee, the Security Insurer and each Rating Agency.
Notwithstanding the foregoing, the Servicer shall not merge or consolidate
with any other Person or permit any other Person to become a successor to the
Servicer's business, unless (x) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.6 shall
have been breached (for purposes hereof, such representations and warranties
shall speak as of the date of the consummation of such transaction) and no
event that, after notice or lapse of time, or both, would become an Insurance
Agreement Event of Default shall have occurred and be continuing, (y) the
Servicer shall have delivered to the Owner Trustee, the Indenture Trustee and
the Security Insurer an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section 7.2(a) and that all conditions precedent,
if any, provided for in this Agreement relating to such transaction have been
complied with, and (z) the Servicer shall have delivered to the Owner
Trustee, the Indenture Trustee and the Security Insurer an Opinion of
Counsel, stating that, in the opinion of such counsel, either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary to preserve and protect the
interest of the Owner Trustee in the Trust Property and reciting the details
of the filings or (B) no such action shall be necessary to preserve and
protect such interest.
(b) Any corporation (i) into which the Backup Servicer may be
merged or consolidated, (ii) resulting from any merger or consolidation to
which the Backup Servicer shall be a party, (iii) which acquires by
conveyance, transfer or lease substantially all of the assets of the Backup
Servicer, or (iv) succeeding to the business of the Backup Servicer, in any
of the foregoing cases shall execute an agreement of assumption to perform
every obligation of the Backup Servicer under this Agreement and, whether or
not such assumption agreement is executed, shall be the successor to the
Backup Servicer under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties to this Agreement,
anything in this Agreement to the contrary notwithstanding; PROVIDED,
HOWEVER, that nothing contained herein shall be deemed to release the Backup
Servicer from any obligation.
SECTION 7.3. LIMITATION ON LIABILITY OF SERVICER, BACKUP SERVICER AND
OTHERS.
(a) Neither the Servicer, the Backup Servicer nor any of the
directors or officers or employees or agents of the Servicer or Backup
Servicer shall be under any liability to the Trust, the Certificateholders or
the Noteholders, except as provided in this Agreement, for any action taken
or for refraining from the taking of any action pursuant to this Agreement;
PROVIDED, HOWEVER, that this provision shall not protect the Servicer, the
Backup Servicer or any such person against any liability that would otherwise
be imposed by reason of a breach of this Agreement or willful misfeasance,
bad faith or negligence (excluding errors in
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judgment) in the performance of duties, by reason of reckless disregard of
obligations and duties under this Agreement or any violation of law by the
Servicer, Backup Servicer or such person, as the case may be; PROVIDED
FURTHER, that this provision shall not affect any liability to indemnify the
Owner Trustee and the Indenture Trustee for costs, taxes, expenses, claims,
liabilities, losses or damages paid by the Owner Trustee or the Indenture
Trustee, each in its individual capacity. The Servicer, the Backup Servicer
and any director, officer, employee or agent of the Servicer or Backup
Servicer may rely in good faith on the advice of counsel or on any document
of any kind PRIMA FACIE properly executed and submitted by any Person
respecting any matters arising under this Agreement.
(b) The Backup Servicer shall not be liable for any obligation of
the Servicer contained in this Agreement, and the Owner Trustee, the
Indenture Trustee, the Seller, the Security Insurer, the Noteholders and the
Certificateholders shall look only to the Servicer to perform such
obligations.
SECTION 7.4. DELEGATION OF DUTIES. The Servicer may delegate
duties under this Agreement to an Affiliate of OFL with the prior written
consent of the Security Insurer, the Indenture Trustee, the Owner Trustee and
the Backup Servicer. The Servicer also may at any time perform the specific
duty of repossession of Financed Vehicles through sub-contractors who are in
the business of servicing automotive receivables and may perform other
specific duties through such sub-contractors with the prior written consent
of the Security Insurer (unless an Insurer Default shall have occurred and be
continuing), PROVIDED, HOWEVER, that no such delegation or sub-contracting
duties by the Servicer shall relieve the Servicer of its responsibility with
respect to such duties. So long as no Insurer Default shall have occurred
and be continuing, neither OFL or any party acting as Servicer hereunder
shall appoint any subservicer hereunder without the prior written consent of
the Security Insurer, the Indenture Trustee, the Owner Trustee and the Backup
Servicer.
SECTION 7.5. SERVICER AND BACKUP SERVICER NOT TO RESIGN. Subject
to the provisions of Section 7.2, neither the Servicer nor the Backup
Servicer shall resign from the obligations and duties imposed on it by this
Agreement as Servicer or Backup Servicer except upon a determination that by
reason of a change in legal requirements the performance of its duties under
this Agreement would cause it to be in violation of such legal requirements
in a manner which would have a material adverse effect on the Servicer or the
Backup Servicer, as the case may be, and the Security Insurer (so long as an
Insurer Default shall not have occurred and be continuing) or a Certificate
Majority and Note Majority (if an Insurer Default shall have occurred and be
continuing) does not elect to waive the obligations of the Servicer or the
Backup Servicer, as the case may be, to perform the duties which render it
legally unable to act or to delegate those duties to another Person. Any
such determination permitting the resignation of the Servicer or Backup
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered
and acceptable to the Owner Trustee, the Indenture Trustee and the Security
Insurer (unless an Insurer Default shall have occurred and be continuing).
No resignation of the
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Servicer shall become effective until, so long as no Insurer Default shall have
occurred and be continuing, the Backup Servicer or an entity acceptable to the
Security Insurer shall have assumed the responsibilities and obligations of the
Servicer or, if an Insurer Default shall have occurred and be continuing, the
Backup Servicer or a successor Servicer that is an Eligible Servicer shall have
assumed the responsibilities and obligations of the Servicer. No resignation of
the Backup Servicer shall become effective until, so long as no Insurer Default
shall have occurred and be continuing, an entity acceptable to the Security
Insurer shall have assumed the responsibilities and obligations of the Backup
Servicer or, if an Insurer Default shall have occurred and be continuing, a
Person that is an Eligible Servicer shall have assumed the responsibilities and
obligations of the Backup Servicer; PROVIDED, HOWEVER, that in the event a
successor Backup Servicer is not appointed within 60 days after the Backup
Servicer has given notice of its resignation and has provided the Opinion of
Counsel required by this Section 7.5, the Backup Servicer may petition a court
for its removal.
ARTICLE VIII
SERVICER TERMINATION EVENTS
SECTION 8.1. SERVICER TERMINATION EVENT. For purposes of this
Agreement, each of the following shall constitute a "Servicer Termination
Event":
(a) Any failure by the Servicer to deliver to the Indenture
Trustee for distribution to Certificateholders or Noteholders any proceeds
or payment required to be so delivered under the terms of this Agreement
(or, if OFL is the Servicer, the Purchase Agreement) that continues
unremedied for a period of two Business Days (one Business Day with respect
to payment of Purchase Amounts) after written notice is received by the
Servicer from the Indenture Trustee or (unless an Insurer Default shall
have occurred and be continuing) the Security Insurer or after discovery of
such failure by a Responsible Officer of the Servicer; or
(b) Failure by the Servicer to deliver to the Indenture
Trustee, the Owner Trustee and (so long as an Insurer Default shall not
have occurred and be continuing) the Security Insurer the Servicer's
Certificate by the fourth Business Day prior to the Distribution Date, or
failure on the part of the Servicer to observe its covenants and agreements
set forth in Section 7.2(a); or
(c) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement (or, if OFL is the Servicer, the
Purchase Agreement), which failure (i) materially and adversely affects the
rights of Certificateholders (determined without regard to the availability
of funds under the Certificate Policy), Noteholders (determined without
regard to the
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availability of funds under the Note Policy), or of the Security Insurer
(unless an Insurer Default shall have occurred and be continuing), and
(ii) continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Owner Trustee, the Indenture Trustee
or the Security Insurer (or, if an Insurer Default shall have occurred and
be continuing, any Certificateholder or Noteholder); or
(d) (i) The commencement of an involuntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or another
present or future federal or state bankruptcy, insolvency or similar law
and such case is not dismissed within 60 days; or (ii) the entry of a decree
or order for relief by a court or regulatory authority having jurisdiction
in respect of the Servicer or the Seller in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or another present
or future, federal or state, bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or the Seller or of
any substantial part of their respective properties or ordering the winding
up or liquidation of the affairs of the Servicer or the Seller; or
(e) The commencement by the Servicer or the Seller of a
voluntary case under the federal bankruptcy laws, as now or hereafter in
effect, or any other present or future, federal or state, bankruptcy,
insolvency or similar law, or the consent by the Servicer or the Seller to
the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Servicer or the Seller or of any substantial part of its property or the
making by the Servicer or the Seller of an assignment for the benefit of
creditors or the failure by the Servicer or the Seller generally to pay its
debts as such debts become due or the taking of corporate action by the
Servicer or the Seller in furtherance of any of the foregoing; or
(f) Any representation, warranty or statement of the Servicer
or the Seller made in this Agreement or any certificate, report or other
writing delivered pursuant hereto shall prove to be incorrect in any
material respect as of the time when the same shall have been made
(excluding, however, any representation or warranty set forth in
Section 2.5(a)), and the incorrectness of such representation, warranty or
statement has a material adverse effect on the Trust and, within 30 days
after written notice thereof shall have been given to the Servicer or the
Seller by the Owner Trustee, the Indenture Trustee or the Security Insurer
(or, if an Insurer Default shall have occurred and be continuing, a
Certificateholder or Noteholder), the circumstances or condition in respect
of which such representation, warranty or statement was incorrect shall not
have been eliminated or otherwise cured; or
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(g) So long as an Insurer Default shall not have occurred and
be continuing, the Security Insurer shall not have delivered a Servicer
Extension Notice pursuant to Section 3.14 (in which case the Servicer
Termination Event will be deemed to have occurred as of the last day of the
term of the most recent Servicer Extension Notice received); or
(h) So long as an Insurer Default shall not have occurred and
be continuing, an Insurance Agreement Event of Default shall have occurred;
or
(i) A claim is made under the Certificate Policy or the Note
Policy.
SECTION 8.2. CONSEQUENCES OF A SERVICER TERMINATION EVENT. If a
Servicer Termination Event shall occur and be continuing, the Security
Insurer (or, if an Insurer Default shall have occurred and be continuing,
either the Indenture Trustee, the Owner Trustee, a Certificate Majority or a
Note Majority), by notice given in writing to the Servicer (and to the
Indenture Trustee and the Owner Trustee if given by the Security Insurer, the
Noteholders or the Certificateholders) may terminate all of the rights and
obligations of the Servicer under this Agreement. On or after (i) the
receipt by the Servicer of such written notice, or (ii) the receipt by the
Backup Servicer (or any alternate successor servicer appointed by the
Security Insurer pursuant to Section 8.3(b)) of written notice from the
Security Insurer that the Security Insurer is not extending the Servicer's
term pursuant to Section 3.14, all authority, power, obligations and
responsibilities of the Servicer under this Agreement, whether with respect
to the Certificates, the Notes or the Trust Property or otherwise, shall be
terminated and automatically shall pass to, be vested in and become
obligations and responsibilities of the Backup Servicer (or such other
successor Servicer appointed by the Security Insurer); PROVIDED, HOWEVER,
that the successor Servicer shall have no liability with respect to any
obligation which was required to be performed by the terminated Servicer
prior to the date that the successor Servicer becomes the Servicer or any
claim of a third party based on any alleged action or inaction of the
terminated Servicer. The successor Servicer is authorized and empowered by
this Agreement to execute and deliver, on behalf of the terminated Servicer,
as attorney-in-fact or otherwise, any and all documents and other instruments
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement of the Receivables and the other Trust Property and
related documents to show the Owner Trustee as lienholder or secured party on
the related Lien Certificates, or otherwise. The terminated Servicer agrees
to cooperate with the successor Servicer in effecting the termination of the
responsibilities and rights of the terminated Servicer under this Agreement,
including, without limitation, the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by
the terminated Servicer for deposit, or have been deposited by the terminated
Servicer, in the Collection Account or thereafter received with respect to
the Receivables and
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the delivery to the successor Servicer of all Receivable Files, Monthly Records
and Collection Records and a computer tape in readable form as of the most
recent Business Day containing all information necessary to enable the successor
Servicer or a successor Servicer to service the Receivables and the other Trust
Property. If requested by the Security Insurer (unless an Insurer Default shall
have occurred and be continuing), the successor Servicer shall terminate the
Lockbox Agreement and direct the Obligors to make all payments under the
Receivables directly to the successor Servicer (in which event the successor
Servicer shall process such payments in accordance with Section 3.2(e)), or to a
lockbox established by the successor Servicer at the direction of the Security
Insurer (unless an Insurer Default shall have occurred and be continuing), at
the successor Servicer's expense. In addition to any other amounts that are
then payable to the terminated Servicer under this Agreement, the terminated
Servicer shall then be entitled to receive out of Available Funds reimbursements
for any Outstanding Monthly Advances (in accordance with Section 4.4(c)) made
during the period prior to the notice pursuant to this Section 8.2 which
terminates the obligation and rights of the terminated Servicer under this
Agreement. The Owner Trustee, the Indenture Trustee and the successor Servicer
may set off and deduct any amounts owed by the terminated Servicer from any
amounts payable to the terminated Servicer pursuant to the preceding sentence.
The terminated Servicer shall grant the Owner Trustee, the Indenture Trustee,
the successor Servicer and the Security Insurer reasonable access to the
terminated Servicer's premises at the terminated Servicer's expense.
SECTION 8.3. APPOINTMENT OF SUCCESSOR.
(a) On and after (i) the time the Servicer receives a notice of
termination pursuant to Section 8.2, or (ii) the resignation of the Servicer
pursuant to Section 7.5, or (iii) the receipt by the Backup Servicer (or any
alternate successor servicer appointed by the Security Insurer pursuant to
Section 8.3(b)) of written notice from the Security Insurer that the Security
Insurer is not extending the Servicer's term pursuant to Section 3.14, the
Backup Servicer (unless the Security Insurer shall have exercised its option
pursuant to Section 8.3(b) to appoint an alternate successor Servicer) shall
be the successor in all respects to the Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for in this
Agreement, and shall be subject to all the responsibilities, restrictions,
duties, liabilities and termination provisions relating thereto placed on the
Servicer by the terms and provisions of this Agreement. The Owner Trustee
and such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. If a successor
Servicer is acting as Servicer hereunder, it shall be subject to termination
under Section 8.2 upon the occurrence of any Servicer Termination Event
applicable to it as Servicer and shall serve from term to term as provided in
Section 3.14.
(b) The Security Insurer may (so long as an Insurer Default shall not
have occurred and be continuing) exercise at any time its right to appoint as
Backup Servicer or as successor to the Servicer a Person other than the Person
serving as
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Backup Servicer at the time, and (without limiting its obligations under the
Policies) shall have no liability to the Owner Trustee, the Indenture Trustee,
OFL, the Seller, the Person then serving as Backup Servicer, any
Certificateholder, any Certificate Owner, any Noteholders, any Note Owner or any
other Person if it does so. Notwithstanding the above, if the Backup Servicer
shall be legally unable or unwilling to act as Servicer and an Insurer Default
shall have occurred and be continuing, the Backup Servicer, the Indenture
Trustee, a Note Majority, the Owner Trustee or a Certificate Majority may
petition a court of competent jurisdiction to appoint any Eligible Servicer as
the successor to the Servicer. Pending appointment pursuant to the preceding
sentence, the Backup Servicer shall act as successor Servicer unless it is
legally unable to do so, in which event the outgoing Servicer shall continue to
act as Servicer until a successor has been appointed and accepted such
appointment. Subject to Section 7.5, no provision of this Agreement shall be
construed as relieving the Backup Servicer of its obligation to succeed as
successor Servicer upon the termination of the Servicer pursuant to Section 8.2
or the resignation of the Servicer pursuant to Section 7.5. If upon the
termination of the Servicer pursuant to Section 8.2 or the resignation of the
Servicer pursuant to Section 7.5, the Security Insurer appoints a successor
Servicer other than the Backup Servicer, the Backup Servicer shall not be
relieved of its duties as Backup Servicer hereunder.
(c) Any successor Servicer shall be entitled to such compensation
(whether payable out of the Collection Account or otherwise) as the Servicer
would have been entitled to under the Agreement if the Servicer had not resigned
or been terminated hereunder. If any successor Servicer is appointed as a
result of the Backup Servicer's refusal (in contravention of the terms of this
Agreement) to act as Servicer although it is legally able to do so, the Security
Insurer and such successor Servicer may agree on reasonable additional
compensation to be paid to such successor Servicer by the Backup Servicer, which
additional compensation shall be paid by the Backup Servicer in its individual
capacity and solely out of its own funds. If any successor Servicer is
appointed for any reason other than the Backup Servicer's refusal to act as
Servicer although legally able to do so, the Security Insurer and such successor
Servicer may agree on additional compensation to be paid to such successor
Servicer, which additional compensation shall be payable as provided in the
Spread Account Agreement. If the Backup Servicer is the successor Servicer, the
Backup Servicer shall be entitled to reimbursement, pursuant to Section 4.6(ii),
of reasonable transition expenses, not in excess of $50,000, incurred in acting
as successor Servicer. In addition, any successor Servicer shall be entitled to
reimbursement, as provided in the Spread Account Agreement, of reasonable
transition expenses incurred in acting as successor Servicer.
SECTION 8.4. NOTIFICATION TO CERTIFICATEHOLDERS AND NOTEHOLDERS.
Upon any termination of, or appointment of a successor to, the Servicer pursuant
to this Article VIII, the Owner Trustee shall give prompt written notice thereof
to Certificateholders at their respective addresses appearing in the Certificate
Register and to each Rating Agency, and the Indenture Trustee shall give prompt
written
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notice thereof to Noteholders at their respective addresses appearing in the
Note Register.
SECTION 8.5. WAIVER OF PAST DEFAULTS. The Security Insurer (or, if
an Insurer Default shall have occurred and be continuing, a Note Majority or
Certificate Majority) may, on behalf of all Holders of Notes and Certificates,
waive any default by the Servicer in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
ARTICLE IX
TERMINATION
SECTION 9.1. OPTIONAL PURCHASE OF ALL RECEIVABLES; LIQUIDATION OF
TRUST ESTATE.
(a) On each Determination Date as of which the Aggregate Principal
Balance is less than 10% of the Original Pool Balance, the Servicer and the
Seller each shall have the option to purchase the corpus of the Trust (with the
consent of the Security Insurer, if a claim has previously been made under the
Certificate Policy or the Note Policy or if such purchase would result in a
claim on the Certificate Policy or the Note Policy or if such purchase would
result in any amount owing to the Security Insurer remaining unpaid); PROVIDED,
HOWEVER, that the amount to be paid for such purchase (as set forth in the
following sentence) shall be sufficient to pay the full amount of principal,
premium, if any, and interest then due and payable on the Notes. To exercise
such option, the Servicer or the Seller, as the case may be, shall pay the
aggregate Purchase Amounts for the Receivables, plus the appraised value of any
other property (including the right to receive any future recoveries) held as
part of the Trust, such appraisal to be conducted by an appraiser mutually
agreed upon by the Servicer or the Seller, as the case may be, and the Security
Insurer (or the Indenture Trustee, if an Insurer Default shall have accrued and
be continuing), and shall succeed to all interests in and to the Trust Property.
The fees and expenses related to such appraisal shall be paid by the party
exercising the option to purchase. The party exercising such option to
repurchase shall deposit the aggregate Purchase Amounts for the Receivables and
the amount of the appraised value of any other property held as part of the
Trust into the Collection Account, and the Indenture Trustee shall distribute
the amounts so deposited in accordance with Section 4.6.
(b) Upon any sale of the assets of the Trust pursuant to Section 9.2
of the Trust Agreement, the Owner Trustee shall instruct the Indenture Trustee
to deposit the proceeds from such sale after all payments and reserves therefrom
have
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been made (the "Insolvency Proceeds") in the Collection Account. On the
Distribution Date on which the Insolvency Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a Distribution
Date, on the Distribution Date immediately following such deposit), the Owner
Trustee shall instruct the Indenture Trustee to make the following deposits
(after the application on such Distribution Date of the Available Funds) from
the Insolvency Proceeds:
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited into the
Note Distribution Account on such Distribution Date;
(ii) to the Note Distribution Account, the Class A-1 Prepayment
Premium, Class A-2 Prepayment Premium, Class A-3 Prepayment Premium, Class
A-4 Prepayment Premium and Class A-5 Prepayment Premium (only to the extent
of the amount of Liquidated Damages (as defined in the Purchase Agreement)
received by the Trust from the Seller)
(iii) to the Note Distribution Account, the outstanding
principal balance of the Notes (after giving effect to the reduction in the
outstanding principal balance of the Notes to result from the deposits
otherwise made in the Note Distribution Account on such Distribution Date);
(iv) to the Certificate Distribution Account, any portion of
the Certificateholders' Interest Distributable Amount not otherwise
deposited into the Certificate Distribution Account on such Distribution
Date;
(v) to the Certificate Distribution Account, the Certificate
Prepayment Premium (only to the extent of the amount of Liquidated Damages
(as defined in the Purchase Agreement) received by the Trust from the
Seller; and
(vi) to the Certificate Distribution Account, the Certificate
Balance (after giving effect to the reduction in the Certificate Balance to
result from the deposits otherwise made in the Certificate Distribution
Account on such Distribution Date).
Any Insolvency Proceeds remaining after the deposits described above shall be
paid, first, to the Security Insurer, to the extent of any amounts owing to the
Security Insurer under the Insurance Agreement and not paid, whether or not OFL
is obligated to pay such amounts, and second to the Collateral Agent for deposit
in the Spread Account.
(c) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee and the Indenture Trustee as soon as practicable
after the Servicer has received notice thereof.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. AMENDMENT.
(a) This Agreement may be amended by the Seller, the Servicer and
the Trust, with the prior written consent of the Indenture Trustee and the
Security Insurer (so long as an Insurer Default shall not have occurred and
be continuing) but without the consent of any of the Noteholders or
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement
any provisions in this Agreement or (iii) for the purpose of adding any
provision to or changing in any manner or eliminating any provision of this
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; PROVIDED, HOWEVER, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of the Noteholders or Certificateholders.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and the Trust with the prior written consent of the
Indenture Trustee and the Security Insurer (so long as an Insurer Default
shall not have occurred and be continuing) and with the consent of a
Certificate Majority and a Note Majority (which consent of any Holder of a
Certificate or Note given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder
and on all future Holders of such Certificate or Note and of any Certificate
or Note issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the Certificate
or Note) 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 Holders of Certificates or Notes;
PROVIDED, HOWEVER, that, subject to the express rights of the Security
Insurer under the Related Documents, including its rights to agree to certain
modifications of the Receivables pursuant to Section 3.2 and its rights to
cause the Indenture Collateral Agent to liquidate the Collateral under the
circumstances and subject to the provisions of Section 5.04 of the Indenture,
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 required to be made on any Certificate or Note or the
Pass-Through Rate, Class A-1 Interest Rate, Class A-2 Interest Rate, Class
A-3 Interest Rate, Class A-4 Interest Rate or Class A-5 Interest Rate, (b)
amend any provisions of Section 4.6 in such a manner as to affect the
priority of payment of interest, principal or premium to Noteholders or
Certificateholders, or (c) reduce the aforesaid percentage required to
consent to any such amendment or any waiver hereunder, without the consent of
the Holders of all Certificates or Notes then outstanding.
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(c) Prior to the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent,
the Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder and the Indenture Trustee.
(e) It shall not be necessary for the consent of Certificateholders
or Noteholders pursuant to Section 10.1(b) to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Certificateholders and Noteholders provided for in this
Agreement) and of evidencing the authorization of the execution thereof by
Certificateholders or Noteholders shall be subject to such reasonable
requirements as the Owner Trustee or Indenture Trustee, as applicable, may
prescribe, including the establishment of record dates.
(f) Prior to the execution of any amendment to this Agreement, the
Owner 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, in addition to the Opinion of Counsel referred to in Section 10.2(i).
The Owner Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Owner Trustee's own rights, duties or immunities
under this Agreement or otherwise.
SECTION 10.2. PROTECTION OF TITLE TO TRUST PROPERTY.
(a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation and other 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 Trust, the Owner Trustee and the
Indenture Collateral Agent in the Trust Property and in the proceeds thereof.
The Servicer shall deliver (or cause to be delivered) to the Owner Trustee, the
Indenture Collateral Agent and the Security Insurer 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, the Servicer nor the Trust shall change its
name, identity or corporate structure in any manner that would, could or might
make any financing statement or continuation statement filed by the Seller in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Owner Trustee, the
Indenture Trustee and the Security Insurer (so long as an Insurer Default shall
not have occurred and be continuing) at least 60 days' prior written notice
thereof, and
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shall promptly file appropriate amendments to all previously filed financing
statements and continuation statements.
(c) Each of the Seller, the Servicer and the Trust shall give the
Owner Trustee, the Indenture Trustee and the Security Insurer at least 60 days'
prior written notice of any relocation of its principal executive office if, as
a result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement. The Servicer shall at all times
maintain each office from which it services Receivables and its principal
executive office within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the Trust,
the Servicer's master computer records (including any backup archives) that
refer to any Receivable indicate clearly (with reference to the particular
trust) that the Receivable is owned by the Trust. Indication of the Trust's
ownership of a Receivable shall be deleted from or modified on the Servicer's
computer systems when, and only when, the Receivable has been paid in full or
repurchased by the Seller or Servicer.
(f) If at any time the Seller or the Servicer proposes 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 print-outs (including any restored from backup
archives) that, if they refer in any manner whatsoever to any Receivable,
indicate clearly that such Receivable has been sold and is owned by the Trust
unless such Receivable has been paid in full or repurchased by the Seller or
Servicer.
(g) The Servicer shall permit the Owner Trustee, the Indenture
Trustee, the Backup Servicer, the Security Insurer and their respective agents,
at any time to inspect, audit and make copies of and abstracts from the
Servicer's records regarding any Receivables or any other portion of the Trust
Property.
(h) The Servicer shall furnish to the Owner Trustee, the Indenture
Trustee, the Backup Servicer and the Security Insurer at any time upon request a
list of all Receivables 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.
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Upon request, the Servicer shall furnish a copy of any list to the Seller. The
Owner Trustee shall hold any such list and Schedule of Receivables for
examination by interested parties during normal business hours at the Corporate
Trust Office upon reasonable notice by such Persons of their desire to conduct
an examination.
(i) The Seller and the Servicer shall deliver to the Owner Trustee,
the Indenture Trustee and the Security Insurer simultaneously with the
execution and delivery of this Agreement and of each amendment thereto and
upon the occurrence of the events giving rise to an obligation to give notice
pursuant to Section 10.2(b) or (c), an Opinion of Counsel either (a) stating
that, in the opinion of such Counsel, all financing statements and
continuation statements have been executed and filed that are necessary fully
to preserve and protect the interest of the Owner Trustee and the Indenture
Collateral Agent in the Receivables and the other Trust Property, and
reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (b) stating that, in the opinion
of such counsel, no such action is necessary to preserve and protect such
interest.
(j) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Security Insurer, within 90 days after the beginning of each
calendar year beginning with the first calendar year beginning more than
three months after the Closing Date, an Opinion of Counsel, either (a)
stating that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary fully
to preserve and protect the interest of the Trust and the Indenture
Collateral Agent in the Receivables, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such details are given, or
(b) stating that, in the opinion of such counsel, no action shall be
necessary to preserve and protect such interest.
SECTION 10.3. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the principles of conflicts of laws thereof and the obligations, rights and
remedies of the parties under this Agreement shall be determined in accordance
with such laws.
SECTION 10.4. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the Notes or the respective rights of the Holders thereof.
SECTION 10.5. ASSIGNMENT. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in Section 7.2 or Section 8.2
(and as provided in the provisions of the Agreement concerning the resignation
of the Servicer and the Backup Servicer), this Agreement may not be assigned by
the
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Seller or the Servicer without the prior written consent of the Owner Trustee,
the Indenture Trustee and the Security Insurer (or, if an Insurer Default shall
have occurred and be continuing, the Owner Trustee, the Indenture Trustee, a
Note Majority and a Certificate Majority).
SECTION 10.6. THIRD-PARTY BENEFICIARIES. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. The Security Insurer and its successors and
assigns shall be a third-party beneficiary to the provisions of this Agreement,
and shall be entitled to rely upon and directly to enforce such provisions of
this Agreement so long as no Insurer Default shall have occurred and be
continuing. Nothing in this Agreement, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, any
benefit or any legal or equitable right, remedy or claim under this Agreement.
Except as expressly stated otherwise herein or in the Related Documents, any
right of the Security Insurer to direct, appoint, consent to, approve of, or
take any action under this Agreement, shall be a right exercised by the Security
Insurer in its sole and absolute discretion.
SECTION 10.7. DISCLAIMER BY SECURITY INSURER. The Security Insurer
may disclaim any of its rights and powers under this Agreement (but not its
duties and obligations under the Policies) upon delivery of a written notice to
the Owner Trustee and the Indenture Trustee.
SECTION 10.8. COUNTERPARTS. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
SECTION 10.9. INTENTION OF PARTIES.
(a) The execution and delivery of this Agreement shall constitute an
acknowledgement by the Seller, that it is intended that the assignment and
transfer herein contemplated constitute a sale and assignment outright, and not
for security, of the Receivables and the other Trust Property, conveying good
title thereto free and clear of any Liens, from the Seller to the Trust, and
that the Receivables and the other Trust Property shall not be a part of the
Seller's estate in the event of the insolvency, receivership, conservatorship or
the occurrence of another similar event, of, or with respect to, the Seller. In
the event that such conveyance is determined to be made as security for a loan
made by the Trust or the Certificateholders to the Seller, the Seller intends
that it shall have granted to the Owner Trustee a first priority security
interest in all of the Seller's right, title and interest in and to the Trust
Property conveyed to the Trust pursuant to Sections 2.1 and 2.4 of this
Agreement, and that this Agreement shall constitute a security agreement under
applicable law.
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(b) The execution and delivery of this Agreement shall constitute an
acknowledgement by the Seller and the Owner Trustee on behalf of the
Certificateholders that they intend to establish (for Federal tax purposes) a
trust taxable as a partnership, rather than an association taxable as a
corporation. The powers granted and obligations undertaken in this Agreement
shall be construed so as to further such intent.
SECTION 10.10. NOTICES. All demands, notices and communications
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 OFL, the Seller or the Servicer,
at the following address: Olympic Receivables Finance Corp., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, with copies to:
Olympic Financial Ltd., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, (b) in the case of the Owner Trustee,
at the Corporate Trust Office (with a copy to Mellon Bank (DE), National
Association, ▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Group, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), (c) in the case of the
Indenture Trustee and, for so long as the Indenture Trustee is the Backup
Servicer or the Collateral Agent, at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Services--Asset
Backed Administration, (d) in the case of each Rating Agency, ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (for ▇▇▇▇▇'▇) and ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (for Standard & Poor's), Attention: Asset-Backed Surveillance, and
(e) in the case of the Security Insurer, Financial Security Assurance Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Surveillance
Department, Telex No.: (▇▇▇) ▇▇▇-▇▇▇▇, Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopy
Nos.: (▇▇▇) ▇▇▇-▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇ (in each case in which notice or other
communication to Financial Security refers to an Event of Default, a claim on
the Note Policy or the Certificate Policy or with respect to which failure on
the part of Financial Security to respond shall be deemed to constitute
consent or acceptance, then a copy of such notice or other communication
should also be sent to the attention of the General Counsel and the
Head-Financial Guaranty Group "URGENT MATERIAL ENCLOSED"), or at such other
address as shall be designated by any such party in a written notice to the
other parties. Any notice required or permitted to be mailed to a
Certificateholder or a Noteholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register
or the Note Register (as the case may be), and any notice so mailed within
the time prescribed in this Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder or the Noteholder
receives such notice.
SECTION 10.11. LIMITATION OF LIABILITY. It is expressly understood
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by Mellon Bank (DE), National Association, not individually or
personally but solely as Owner Trustee of the Trust under the Trust Agreement,
in the exercise of the powers and authority conferred and vested in it, (b) each
of the representations,
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undertakings and agreements herein made on the part of the Trust is made and
intended not as personal representations, undertakings and agreements by
Mellon Bank (DE), National Association but is made and intended for the
purpose for binding only the Trust, (c) nothing herein contained shall be
construed as creating any liability on Mellon Bank (DE), National
Association, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming
by, through or under them and (d) under no circumstances shall Mellon Bank
(DE), National Association be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken by
the Trust under this Agreement or any related documents.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Issuer, the Seller, OFL, the Servicer and the
Backup Servicer have caused this Sale and Servicing Agreement to be duly
executed by their respective officers as of the day and year first above
written.
ISSUER:
OLYMPIC AUTOMOBILE RECEIVABLES
TRUST, 1997-A
By MELLON BANK (DE),
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By /s/ ▇. ▇. ▇▇▇▇
-------------------------------------
Name: ▇. ▇. ▇▇▇▇
Title: Vice President
SELLER:
OLYMPIC RECEIVABLES FINANCE CORP.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
OLYMPIC FINANCIAL LTD.
In its individual capacity and as Servicer
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
BACKUP SERVICER:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Corporate Trust Officer
Acknowledged and Accepted:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
not in its individual capacity but as Indenture Trustee
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Corporate Trust Officer
SCHEDULE A
REPRESENTATIONS AND WARRANTIES OF SELLER AND OFL
1. CHARACTERISTICS OF RECEIVABLES. Each Receivable (A) was
originated by a Dealer for the retail sale of a Financed Vehicle in the ordinary
course of such Dealer's business and such Dealer had all necessary licenses and
permits to originate Receivables in the state where such Dealer was located, was
fully and properly executed by the parties thereto, was purchased by OFL from
such Dealer under an existing Dealer Agreement with OFL and was validly assigned
by such Dealer to OFL, (B) contains customary and enforceable provisions such as
to render the rights and remedies of the holder thereof adequate for realization
against the collateral security, and (C) is fully amortizing and provides for
level monthly payments (provided that the payment in the first Monthly Period
and the final Monthly Period of the life of the Receivable may be minimally
different from the level payment) which, if made when due, shall fully amortize
the Amount Financed over the original term.
2. NO FRAUD OR MISREPRESENTATION. Each Receivable was originated by
a Dealer and was sold by the Dealer to OFL without any fraud or
misrepresentation on the part of such Dealer in either case.
3. COMPLIANCE WITH LAW. All requirements of applicable federal,
state and local laws, and regulations thereunder (including, without limitation,
usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act,
the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇
Warranty Act, the Federal Reserve Board's Regulations "B" and "Z", the Soldiers'
and Sailors' Civil Relief Act of 1940, the Minnesota Motor Vehicle Retail
Installment Sales Act, and state adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code and other consumer credit laws and equal credit
opportunity and disclosure laws) in respect of all of the Receivables and each
and every sale of Financed Vehicles, have been complied with in all material
respects, and each Receivable and the sale of the Financed Vehicle evidenced by
each Receivable complied at the time it was originated or made and now complies
in all material respects with all applicable legal requirements.
4. ORIGINATION. Each Receivable was originated in the United
States.
5. BINDING OBLIGATION. Each Receivable represents the genuine,
legal, valid and binding payment obligation of the Obligor thereon, enforceable
by the holder thereof in accordance with its terms, except (A) as enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether such
enforceability is
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considered in a proceeding in equity or at law and (B) as such Receivable may be
modified by the application after the Initial Cutoff Date or any Subsequent
Cutoff Date, as the case may be, of the Soldiers' and Sailors' Civil Relief Act
of 1940, as amended; and all parties to each Receivable had full legal capacity
to execute and deliver such Receivable and all other documents related thereto
and to grant the security interest purported to be granted thereby.
6. NO GOVERNMENT OBLIGOR. No Obligor is the United States of
America or any State or any agency, department, subdivision or instrumentality
thereof.
7. OBLIGOR BANKRUPTCY. At the Initial Cutoff Date or each
Subsequent Cutoff Date, as applicable, no Obligor had been identified on the
records of OFL as being the subject of a current bankruptcy proceeding.
8. SCHEDULE OF RECEIVABLES. The information set forth in the
Schedule of Receivables has been produced from the Electronic Ledger and was
true and correct in all material respects as of the close of business on the
Initial Cutoff Date or each Subsequent Cutoff Date, as applicable.
9. MARKING RECORDS. By the Closing Date or by each Subsequent
Transfer Date, the Seller will have caused the portions of the Electronic Ledger
relating to the Receivables to be clearly and unambiguously marked to show that
the Receivables constitute part of the Trust Property and are owned by the Trust
in accordance with the terms of the Agreement.
10. COMPUTER TAPE. The Computer Tape made available by the Seller to
the Owner Trustee on the Closing Date or on each Subsequent Transfer Date was
complete and accurate as of the Initial Cutoff Date or Subsequent Cutoff Date,
as applicable, and includes a description of the same Receivables that are
described in the Schedule of Receivables.
11. ADVERSE SELECTION. No selection procedures adverse to the
Noteholders or the Certificateholders were utilized in selecting the Receivables
from those receivables owned by OFL which met the selection criteria contained
in the Sale and Servicing Agreement.
12. CHATTEL PAPER. The Receivables constitute chattel paper within
the meaning of the UCC as in effect in the States of Minnesota and New York.
13. ONE ORIGINAL. There is only one original executed copy of each
Receivable.
14. RECEIVABLE FILES COMPLETE. There exists a Receivable File
pertaining to each Receivable and such Receivable File contains (a) a fully
executed original of the Receivable, (b) a certificate of insurance, application
form for
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insurance signed by the Obligor, or a signed representation letter from the
Obligor named in the Receivable pursuant to which the Obligor has agreed to
obtain physical damage insurance for the related financial vehicle, or copies
thereof, (c) the original Lien Certificate or application therefor and (d) a
credit application signed by the Obligor, or a copy thereof. Each of such
documents which is required to be signed by the Obligor has been signed by the
Obligor in the appropriate spaces. All blanks on any form have been properly
filled in and each form has otherwise been correctly prepared. The complete
Receivable File for each Receivable currently is in the possession of the
Custodian.
15. RECEIVABLES IN FORCE. No Receivable has been satisfied,
subordinated or rescinded, and the Financed Vehicle securing each such
Receivable has not been released from the lien of the related Receivable in
whole or in part. No provisions of any Receivable have been waived, altered or
modified in any respect since its origination, except by instruments or
documents identified in the Receivable File. No Receivable has been modified as
a result of application of the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
16. LAWFUL ASSIGNMENT. No Receivable was originated in, or is
subject to the laws of, any jurisdiction the laws of which would make unlawful,
void or voidable the sale, transfer and assignment of such Receivable under this
Agreement or pursuant to transfers of the Notes or the Certificates.
17. GOOD TITLE. No Receivable has been sold, transferred, assigned
or pledged by OFL to any Person other than the Seller or by the Seller to any
Person other than the Trust; immediately prior to the conveyance of the
Receivables pursuant to the Purchase Agreement, OFL was the sole owner of and
had good and indefeasible title thereto, free and clear of any Lien; immediately
prior to the conveyance of the Receivables to the Trust pursuant to this
Agreement or any Subsequent Purchase Agreement, as applicable, the Seller was
the sole owner thereof and had good and indefeasible title thereto, free of any
Lien and, upon execution and delivery of this Agreement or any Subsequent
Purchase Agreement, as applicable, by the Seller, the Trust shall have good and
indefeasible title to and will be the sole owner of such Receivables, free of
any Lien. No Dealer has a participation in, or other right to receive, proceeds
of any Receivable. Neither OFL nor the Seller has taken any action to convey
any right to any Person that would result in such Person having a right to
payments received under the related Insurance Policies or the related Dealer
Agreements or Dealer Assignments or to payments due under such Receivables.
18. SECURITY INTEREST IN FINANCED VEHICLE. Each Receivable created
or shall create a valid, binding and enforceable first priority security
interest in favor of OFL in the Financed Vehicle. The Lien Certificate and
original certificate of title for each Financed Vehicle show, or if a new or
replacement Lien Certificate is being applied for with respect to such Financed
Vehicle the Lien Certificate will be received within 180 days of the Closing
Date or any Subsequent Transfer Date, as
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applicable, and will show OFL named as the original secured party under each
Receivable as the holder of a first priority security interest in such Financed
Vehicle. With respect to each Receivable for which the Lien Certificate has not
yet been returned from the Registrar of Titles, OFL has received written
evidence from the related Dealer that such Lien Certificate showing OFL as first
lienholder has been applied for. OFL's security interest has been validly
assigned by OFL to the Seller and by the Seller to the Owner Trustee pursuant to
this Agreement or any Subsequent Transfer Agreement, as applicable. Immediately
after the sale, transfer and assignment thereof to the Trust, each Receivable
will be secured by an enforceable and perfected first priority security interest
in the Financed Vehicle in favor of the Trust as secured party, which security
interest is prior to all other liens upon and security interests in such
Financed Vehicle which now exist or may hereafter arise or be created (except,
as to priority, for any lien for taxes, labor or materials affecting a Financed
Vehicle). As of the Initial Cutoff Date or each Subsequent Cutoff Date, as
applicable, there were no Liens or claims for taxes, work, labor or materials
affecting a Financed Vehicle which are or may be Liens prior or equal to the
lien of the related Receivable.
19. ALL FILINGS MADE. All filings (including, without limitation,
UCC filings) required to be made by any Person and actions required to be taken
or performed by any Person in any jurisdiction to give the Trust a first
priority perfected lien on, or ownership interest in, the Receivables and the
proceeds thereof and the other Trust Property have been made, taken or
performed.
20. NO IMPAIRMENT. Neither OFL nor the Seller has done anything to
convey any right to any Person that would result in such Person having a right
to payments due under the Receivable or otherwise to impair the rights of the
Trust, the Indenture Trustee, the Noteholders and the Certificateholders in any
Receivable or the proceeds thereof.
21. RECEIVABLE NOT ASSUMABLE. No Receivable is assumable by another
Person in a manner which would release the Obligor thereof from such Obligor's
obligations to the Seller with respect to such Receivable.
22. NO DEFENSES. No Receivable is subject to any right of
rescission, setoff, counterclaim or defense and no such right has been asserted
or threatened with respect to any Receivable.
23. NO DEFAULT. There has been no default, breach, violation or
event permitting acceleration under the terms of any Receivable (other than
payment delinquencies of not more than 30 days), and no condition exists or
event has occurred and is continuing that with notice, the lapse of time or both
would constitute a default, breach, violation or event permitting acceleration
under the terms of any Receivable, and there has been no waiver of any of the
foregoing. As of the Initial Cutoff Date or any Subsequent Cutoff Date, as
applicable, no Financed Vehicle had been repossessed.
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24. INSURANCE. As of the Closing Date or as of any Subsequent
Transfer Date, as applicable, each Financed Vehicle is covered by a
comprehensive and collision insurance policy (i) in an amount at least equal
to the lesser of (a) its maximum insurable value or (b) the principal amount
due from the Obligor under the related Receivable, (ii) naming OFL as loss
payee and (iii) insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by comprehensive
and collision coverage. Each Receivable requires the Obligor to maintain
physical loss and damage insurance, naming OFL and its successors and assigns
as additional insured parties, and each Receivable permits the holder thereof
to obtain physical loss and damage insurance at the expense of the Obligor if
the Obligor fails to do so. No Financed Vehicle was or had previously been
insured under a policy of Force-Placed Insurance on the Cutoff Date.
25. PAST DUE. At Initial Cutoff Date or any Subsequent Cutoff Date,
as applicable, no Receivable was more than 30 days past due.
26. REMAINING PRINCIPAL BALANCE. At the Initial Cutoff Date or any
Subsequent Cutoff Date, as applicable, each Receivable had a remaining principal
balance equal to or greater than $500.00, and the Principal Balance of each
Receivable set forth in the Schedule of Receivables is true and accurate in all
material respects.
27. FINAL SCHEDULED MATURITY DATE. No Receivable has a final
scheduled maturity later than April 7, 2004.
28. CERTAIN CHARACTERISTICS. (A) Each Initial Receivable had a
remaining maturity, as of the Initial Cutoff Date, of at least 3 months but
not more than 84 months; (B) each Initial Receivable had an original maturity
of at least 12 months but not more than 84 months; (C) each Initial
Receivable had an original principal balance of at least $610.00 and not more
than $77,071.93; (D) each Initial Receivable had a remaining Principal
Balance as of the Initial Cutoff Date of at least $507.54 and not more than
$76,619.22; (E) each Initial Receivable has an Annual Percentage Rate of at
least 7.50% and not more than 23.45%; (F) no Initial Receivable was more than
30 days past due as of the Initial Cutoff Date; (G) no funds have been
advanced by the Seller, the Servicer, any Dealer, or anyone acting on behalf
of any of them in order to cause any Receivable to qualify under clause (F)
above, (H) no Initial Receivable has a final scheduled payment date on or
before June 1,1997, and (I) the Principal Balance of each Receivable set
forth in Schedule of Receivables is true and accurate in all material
respects as of the Initial Cutoff Date, (J) 17.25% of the Initial
Receivables, by principal balance as of the Initial Cutoff Date, was
attributable to loans for the purchase of new Financed Vehicles and 82.75% of
the Initial Receivables was attributable to loans for the purchase of used
Financed Vehicles, (K) not more than 49% of the Principal Balance as of the
Initial Cutoff Date was attributable to loans originated under OFL's
"Classic" program, (L) not more than 2% of the Principal Balance of the
Initial Receivables as of the Initial Cutoff Date had an Annual Percentage
Rate in excess of 21%, (M) not more than 0.25% of the Principal Balance of
such Receivables represented loans in excess of $50,000.00,
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(N) not more than 0.4% of the Principal Balance of such Receivables represented
loans with original terms greater than 72 months and (O) not more than 5.0% of
the Principal Balance of such Receivables represented loans secured by Financed
Vehicles that previously secured a loan originated by OFL with an obligor other
than the current Obligor.
S-A-6
SCHEDULE B
SERVICING POLICIES AND PROCEDURES
NOTE: APPLICABLE TIME PERIODS WILL VARY BY STATE.
I. PAST DUE PAYMENT COLLECTIONS
A. Past due payment notices are generated and sent on the 9th and 15th
day of delinquency.
B. The collection officer will make at least one phone call by day 10.
C. The collection officer will write a personalized collection letter by
day 15 and will have made at least two collection phone calls.
D. The collection officer will make at least two (2) more phone calls and
write at least one (1) more letter between days 15 and 30.
E. The collection officer will send a final demand letter on or about 31
days past due. The letter will allow 10 days to bring the account
current.
F. The collection officer will recommend either repossession, or some
form of reasonable forbearance (e.g., one extension in exchange for a
partial payment for cooperative debtors).
All phone calls and correspondence will require a brief handwritten
comment in the credit file. The date of each comment and the officer's initials
will be documented.
II. PAYMENT EXTENSIONS
Extensions of monthly payments must be granted only after careful
consideration and analysis. The extension is not to be used to mask
delinquencies, but rather assist in the collection and correction of verifiable
and legitimate customer problems. All extensions or modifications require the
prior approval of the Branch Manager. In the absence of the Branch Manager, the
Executive Vice President's or the President's approval is required.
Possible qualifications for extensions to cooperative and trustworthy
customers include:
(a) Medical problems - verifiable;
(b) Temporary work loss - verifiable;
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(c) Pending insurance claim - verifiable; or
(d) Bankruptcy trustee cram down.
III. REPOSSESSIONS
Repossessions of the collateral is only to be pursued after exhausting
all other collection efforts. Once the decision is made to attempt
repossession, the following process is to be utilized:
(a) Decision on repossession.
(b) If the customer is cooperative, attempt repossession by Servicer
personnel. If uncooperative or unable to locate, utilize a third
party collection agency.
(c) Once secured, complete an inventory of personal belongings and brief
condition report on the vehicle. Return the property to the customer
and obtain a signed statement of inventory receipt.
(d) If the repossession is involuntary, notify the police department in
the city where the repossession occurred.
(e) Notify the originating dealership of repossession as soon as possible
and request a refund of all rebateable dealer adds.
(f) Send written notification to the customer regarding a 10-day notice to
redeem the loan.
(g) Decide on proper method of liquidation and plan for sale after the
10-day redemption period has expired.
(h) If consignment, set 21-day maximum term with the dealership, after
which time, if unsold, the vehicle is returned to the Servicer.
If wholesale, contact the appropriate auction company to make
arrangements for immediate sale.
If private sale, place advertisements in the proper media and attempt
to liquidate within one week.
(i) After the collateral is liquidated, send the debtor a letter
stating the amount of deficiency. Continued collection efforts will
take the form of voluntary payments or involuntary payments via
judgment, garnishment, and levy.
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IV. CHARGE OFFS
It is the responsibility of the collection officer to diligently
pursue any and all deficiencies which result from problem accounts. All avenues
of potential collection will be pursued, ranging from cash settlements to
amortized deficiency notes to judgment and garnishment.
A complete list of all charge offs will be maintained. The list will
be categorized into "active" and "dead" accounts. A brief action plan will be
shown for each active account. Accounts will only be designated as "dead" with
the recommendation of the collection officer and approval of the Executive Vice
President. The "dead" designation will only be granted for those accounts which
hold no potential for recovery (e.g., discharged Chapter 7).
Active charge off action plans will be presented at least monthly to
the Executive Vice President. Decisions regarding pursuit of legal action and
incurring potential legal fees will need prior approval by the Executive Vice
President.
V. DEFICIENCY COLLECTIONS
(a) Establish the exact amount of the deficiency, using the repossession
worksheet. This includes all fees and per diem interest.
(b) Attempt verbal and/or written negotiations with the debtor to settle
the deficiency.
(c) Send a certified letter to the debtor and cosigner(s) stating that we
need $X by ________, 19__ (7-10 days), or we will begin legal action.
If no reasonable response is received move to (d).
(d) Complete a General Claim Form. Send the form to [applicable local
court].
(e) We should receive notification of the court's decision within one
week. If we receive notice of judgment, it is possible that the
debtor will pay the court and the court will then pay the Servicer.
As this usually does not happen, proceed to exercise on the judgment
as follows:
(1) File both the Transcript of Judgment and the Affidavit of
Identification of Judgment Debtor with [appropriate office].
(2) Order a Writ of Execution from [appropriate office].
(3) "Service" of the Writ of Execution is handled by the Sheriff or
an Attorney.
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