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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported) October 1, 1999
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AutoNation Receivables Corporation
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(Exact Name of Registrant as Specified in Charter)
Delaware 333-81615 65-092-903
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(State of Incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
200 South Andrews Avenue
Ft. Lauderdale, FL 84101
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (954) 769-4555
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. Other Events
The Registrant is filing material agreements executed in connection
with the most recent transaction entered into under the above-referenced
Registration Statement.
ITEM 7. Exhibits
(c) Exhibits
Item 601(a)
of Regulation S-K
Exhibit No. Description
- ----------- -----------
1.2 Underwriting Agreement
4.4 Amended and Restated Owner Trust Agreement
4.5 Indenture
10.3 Sale and Servicing Agreement
10.4 Administration Agreement
2
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Pursuant to the requirements of the Securities Exchange Act of
1934, the Trust has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AUTONATION RECEIVABLES CORPORATION
By: /s/ Leland S. Wilson
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Name: Leland S. Wilson
Title: Treasurer
November 8, 1999
3
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INDEX TO EXHIBITS
Exhibit No. Description
1.2 Underwriting Agreement
4.4 Amended and Restated Owner Trust Agreement
4.5 Indenture
10.3 Sale and Servicing Agreement
10.4 Administration Agreement
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$786,800,000
ANRC AUTO OWNER TRUST 1999-A
$125,000,000 6.16625% ASSET-BACKED NOTES, CLASS A-1
$314,000,000 6.54% ASSET-BACKED NOTES, CLASS A-2
$196,000,000 6.75% ASSET-BACKED NOTES, CLASS A-3
$151,800,000 6.94% ASSET-BACKED NOTES, CLASS A-4
AUTONATION RECEIVABLES CORPORATION
UNDERWRITING AGREEMENT
________________________________________________________________October 14, 1999
Chase Securities Inc.,
as Representative of the Several Underwriters
270 Park Avenue, 7th Floor
New York, New York 10017
Ladies and Gentlemen:
1. Introductory. AutoNation Receivables Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
cause ANRC Auto Owner Trust 1999-A (the "Trust") to issue and sell $125,000,000
aggregate principal amount of 6.16625% Asset-Backed Notes, Class A-1 (the "Class
A-1 Notes"), $314,000,000 aggregate principal amount of 6.54% Asset- Backed
Notes, Class A-2 (the "Class A-2 Notes"), $196,000,000 aggregate principal
amount of 6.75% Asset-Backed Notes, Class A-3 (the "Class A-3 Notes") and
$151,800,000 aggregate principal amount of 6.94% Asset-Backed Notes, Class A-4
(the "Class A-4 Notes" and, together with the Class A-1 Notes, the Class A-2
Notes and the Class A-3 Notes, the "Notes"). The Notes will be issued pursuant
to an Indenture, to be dated as of October 1, 1999 (the "Indenture"), between
the Trust and The Chase Manhattan Bank, a New York banking corporation as
indenture trustee (in such capacity, the "Indenture Trustee").
2.
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3. The assets of the Trust will include, among other things, a pool of motor
vehicle retail installment sales contracts (the "Contracts"), all of which are
secured by new and/or used automobiles and/or light-duty trucks, all monies due
on the Contracts or received thereunder after the Cut-Off Date, such Contracts
to be sold to the Trust by the Company and to be serviced for the Trust by
AutoNation Financial Services Corp. ("AutoNation Financial Services" or, in its
capacity as servicer, the "Servicer"). Capitalized terms used but not defined
herein have the meanings ascribed thereto in the Sale and Servicing Agreement,
to be dated as of October 1, 1999 (the "Sale and Servicing Agreement"), by and
among the Trust, the Company, AutoNation Financial Services, as Servicer and
Custodian and the Indenture Trustee or, if not defined therein, in the
Indenture, the Owner Trust Agreement or the Receivables Purchase Agreement, as
the case may be. As used herein, "Basic Documents" shall have the meaning
specified in the Sale and Servicing Agreement. The Company hereby agrees with
the several Underwriters named in Schedule A hereto (collectively, the
"Underwriters") as follows:
4.
5. Representations and Warranties of the Company and AutoNation Financial
Services Corp. The Company and AutoNation Financial Services, each with respect
to itself only, represent and warrant to, and agree with, the several
Underwriters that:
6.
(a) A registration statement on Form S-3 (No. 333-81615) relating to
the Notes, including a form of prospectus, has been filed with the
Securities and Exchange Commission (the "Commission") and either (i)
has been declared effective under the Securities Act of 1933, as
amended (the "Securities Act"), and is not proposed to be amended or
(ii) is proposed to be amended by amendment or post-effective
amendment. If the Company does not propose to amend the registration
statement, and if any post-effective amendment to the registration
statement has been filed with the Commission prior to the execution and
delivery of this Agreement, the most recent post-effective amendment
has been declared effective by the Commission or has become effective
upon filing pursuant to Rule 462(c) under the Securities Act ("Rule
462(c)"). For purposes of this Agreement, "Effective Time" means (i) if
the Company has advised Chase Securities Inc., as representative of the
several Underwriters (in such capacity, the "Representative"), that it
does not propose to amend the registration statement, the date and time
as of which the registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the execution
and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c),
or (ii) if the Company has advised the Representative that it proposes
to file an amendment or post-effective amendment to the regis-
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tration statement, the date and time as of which the registration
statement, as amended by such amendment or post-effective amendment, as
the case may be, is declared effective by the Commission. "Effective
Date" means the date of the Effective Time. The registration statement,
as amended at the Effective Time, including all information (if any),
deemed to be a part of the registration statement as of the Effective
Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Securities
Act, is hereinafter referred to as the "Registration Statement". Any
preliminary prospectus and preliminary prospectus supplement included
in the Registration Statement which, as of the Effective Date, omits
the information (if any) deemed to be a part of the initial
Registration Statement as of such time pursuant to Rule 430A(b) is
hereinafter referred to collectively as the "Preliminary Prospectus".
The form of prospectus and prospectus supplement relating to the Notes,
as first filed with the Commission pursuant to and in accordance with
Rule 424(b) under the Securities Act ("Rule 424(b)") or, if no such
filing is required, as included in the Registration Statement, is
hereinafter referred to collectively as the "Prospectus". No document
has been or will be prepared or distributed in reliance on Rule 434
under the Securities Act.
(a) If the Effective Time is prior to the execution and delivery of
this Agreement: (i) on the Effective Date, the Registration Statement
conformed in all respects to the requirements of the Securities Act and
the rules and regulations of the Commission (collectively, the "Rules
and Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(ii) on the date of this Agreement, the Registration Statement
conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) the Registration Statement and the Prospectus will conform, in
all respects to the requirements of the Securities Act and the Rules
and Regulations, and neither of such documents includes, or will
include, any untrue statement of a material fact or omits or will omit
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading. If the Effective Time is
subsequent to the execution and delivery of this Agreement: (i) on the
Effective Date, the Registration Statement and the Prospectus will
conform in all respects to the requirements of the Securities Act and
the Rules and Regulations, (ii) neither of such documents will include
any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) no additional registration
statement related to the Notes pursuant to Rule 462(b) has been or will
be
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filed. The two preceding sentences do not apply to statements in, or
omissions from, the Registration Statement or the Prospectus based upon
(i) written information furnished to the Company by any Underwriter
through the Representative specifically for use therein, it being
understood and agreed that the only such information is that described
as such in Section 7(b), (ii) the information furnished to the Company
by the Insurer set forth under the heading "The Insurer" in, or
incorporated by reference in, the Prospectus and (iii) the information
furnished to the Company by the Insurer set forth under the heading
"The Insurance Policy" in the Prospectus.
(a) Each of the Company and AutoNation Financial Services has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of Delaware, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus; and each of the Company and AutoNation Financial
Services is duly qualified to do business as a foreign corporation in
good standing in the State of Florida and in all other jurisdictions in
which its ownership or lease of property or the conduct of its business
requires such qualification and in which the failure to so qualify,
taken in the aggregate, would have a material adverse effect on it.
(a) No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required to be obtained
or made by the Company, AutoNation Financial Services or the Trust for
the consummation of the transactions contemplated by this Agreement and
the Basic Documents in connection with the issuance of the Notes and
the Residual Interest Certificate and the sale by the Company of the
Notes, except such as have been obtained or will be obtained by the
Closing Date and made under the Securities Act, the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act") and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), such as may be
required under state securities laws and the filing of any financing
statements required to perfect the Company's, the Trust's and the
Indenture Trustee's interest in the Contracts, which financing
statements will be filed in the appropriate offices on or prior to the
Closing Date (as such term is defined in Section 3).
(a) Neither the Company nor AutoNation Financial Services is in
violation of its Certificate of Incorporation or By-laws or is in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any agreement or instrument to which
it is a party or by which it
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or its properties are bound which could have a material adverse effect
on the ability of either the Company or AutoNation Financial Services
to perform its obligations contemplated herein or in the other Basic
Documents. The execution, delivery and performance of this Agreement
and the other Basic Documents by the Company and AutoNation Financial
Services, and the issuance of the Notes and the Residual Interest
Certificate and the sale by the Company of the Notes and the compliance
by the Company and AutoNation Financial Services with the terms and
provisions hereof and thereof will not, subject to obtaining any
consents or approvals as may be required under the securities or "blue
sky" laws of various jurisdictions, result in a conflict with, or
breach or violation of, any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or order of
any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or AutoNation Financial Services
or any of their respective properties, or any agreement or instrument
to which the Company or AutoNation Financial Services is a party or by
which the Company or AutoNation Financial Services is bound or to which
any of the properties of the Company or AutoNation Financial Services
is subject, or the Certificate of Incorporation or By-laws of the
Company and AutoNation Financial Services, except for conflicts,
violations, breaches and defaults which individually or in the
aggregate, would not be materially adverse to the Company or AutoNation
Financial Services or materially adverse to the Company's or AutoNation
Financial Services' ability to perform its obligations under this
Agreement or the Basic Documents, and the Company has full power and
authority to authorize the issuance of the Notes and the Residual
Interest Certificate and to sell the Notes as contemplated by this
Agreement, the Indenture and the Owner Trust Agreement, and each of the
Company and AutoNation Financial Services has full power and authority
to enter into this Agreement and the other Basic Documents and to
consummate the transactions contemplated hereby and thereby.
(a) On the Closing Date, the Company will have directed the Owner
Trustee, on behalf of the Trust, to authenticate and execute the
Residual Interest Certificate and, when delivered pursuant to the Owner
Trust Agreement, the Residual Interest Certificate will have been duly
issued and delivered and will constitute a valid and legally binding
obligation of the Trust, entitled to the benefits provided in the Owner
Trust Agreement and enforceable in accordance with its terms subject to
enforcement of remedies to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and laws affecting
creditors' rights and remedies generally, and the
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general principals of equity, including principals of commercial
reasonableness and good faith and fair dealing, regardless of whether
the aforementioned is sought in a proceeding in law or in equity.
(a) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company or
AutoNation Financial Services or any of their respective properties
that, if determined adversely to the Company or AutoNation Financial
Services, would be reasonably likely to individually or in the
aggregate have a material adverse effect on the condition (financial or
other), business or results of operations of the Company or AutoNation
Financial Services, respectively, or would materially and adversely
affect the ability of the Company or AutoNation Financial Services to
perform its obligations under this Agreement or the other Basic
Documents to which it is a party, or which are otherwise material in
the context of the issuance and sale of the Notes or the issuance of
the Residual Interest Certificate; and no such actions, suits or
proceedings are to the Company's or AutoNation Financial Services'
knowledge, contemplated.
(a) As of the Closing Date, the representations and warranties of the
Company and AutoNation Financial Services contained herein and in the
other Basic Documents will be true and correct.
(a) This Agreement and each other Basic Document to which it is a party
has been duly authorized, executed and delivered by each of the Company
and AutoNation Financial Services.
(a) As of the Closing Date, the Company has directed the Owner Trustee,
on behalf of the Trust, to execute and issue the Notes and to sell the
Notes.
(a) The Company's assignment and delivery of the Contracts to the Trust
as of the Closing Date will vest in the Trust all of the Company's
right, title and interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(a) The Trust's assignment of the Contracts to the Indenture Trustee
pursuant to the Indenture will vest in the Indenture Trustee, for the
benefit of the Noteholders, a first priority perfected security
interest therein, subject to no prior lien, mortgage, security
interest, pledge, adverse claim, charge or other encumbrance.
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(a) The computer disk of the Contracts created as of September 30,
1999, and made available to the Representative by the Servicer was
complete and accurate as of the date thereof and includes an
identifying description of the Contracts that are listed on Exhibit A
to the Sale and Servicing Agreement.
(a) Any taxes, fees and other governmental charges in connection with
the execution, delivery and performance of this Agreement, the other
Basic Documents and the Notes and any other agreements contemplated
herein or therein shall have been paid or will be paid by the Company
at or prior to the Closing Date to the extent then due.
(a) The consummation of the transactions contemplated by this Agreement
and the other Basic Documents, and the fulfillment of the terms hereof
and thereof, will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any of the property or
assets of the Company or AutoNation Financial Services pursuant to the
terms of, any indenture, mortgage, deed of trust, loan agreement,
guarantee, lease financing agreement or similar agreement or instrument
under which the Company or AutoNation Financial Services is a debtor or
guarantor, except for conflicts, violations, breaches and defaults
which individually or in the aggregate, would not be materially adverse
to the Company or AutoNation Financial Services or materially adverse
to the Company's or AutoNation Financial Services' ability to perform
its obligations under this Agreement or the Basic Documents.
(a) The Company is not and, after giving effect to the issuance of the
Residual Interest Certificate and the offering and sale of the Notes
and the application of the proceeds thereof as described in the
Prospectus, will not be required to be registered as an "investment
company" as defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act").
1. Purchase, Sale and Delivery of Notes. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters, and
the Underwriters agree, severally and not jointly, to purchase from the Company,
at a purchase price of, in the case of (i) the Class A-1 Notes, 99.875% of the
principal amount thereof; (ii) the Class A-2 Notes, 99.798143% of the principal
amount thereof; (iii) the Class A-3 Notes, 99.764353% of the principal amount
thereof; and (iv) the Class
<PAGE>
A-4 Notes, 99.734524% of the principal amount thereof, in the respective
principal amounts of each Class of the Notes set forth opposite the names of the
Underwriters in Schedule A hereto.
2.
3. The Company will deliver against payment of the purchase price, the Notes of
each Class in the form of one or more permanent global securities in definitive
form (the "Global Notes") deposited with the Indenture Trustee as custodian for
The Depository Trust Company ("DTC") and registered in the name of Cede & Co.,
as nominee for DTC. Interests in any permanent Global Notes will be held only in
book-entry form through DTC, except in the limited circumstances described in
the Prospectus. Payment for the Notes shall be made by the Underwriters in
Federal (same day) funds by official check or checks or wire transfer to an
account in New York previously designated to the Representative by the Company
at a bank acceptable to the Representative at the offices of Weil, Gotshal &
Manges LLP, New York, New York, at 10:00 a.m., New York time, on October 22,
1999, or at such other time not later than seven full business days thereafter
as the Representative and the Company determine, such time being herein referred
to as the "Closing Date", against delivery to the Indenture Trustee as custodian
for DTC of the Global Notes representing all of the Notes. The Global Notes will
be made available for checking at the above office of Weil, Gotshal & Manges LLP
at least 24 hours prior to the Closing Date.
4.
5. The Company will deliver the Residual Interest Certificate to the above
office of Weil, Gotshal & Manges LLP on the Closing Date. The Residual Interest
Certificate so to be delivered will be in definitive form, in authorized
denominations and registered in the name of the Company and will be made
available for checking at the above office of Weil, Gotshal & Manges LLP at
least 24 hours prior to the Closing Date.
6.
7. Pursuant to Rule 15c6-1(d) under the Exchange Act, the parties hereto have
agreed that the Closing Date will be not later than October 22, 1999, unless
otherwise agreed to as described above.
8.
9. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Notes for sale to the public as set forth in the
Prospectus.
10.
11. Certain Agreements of the Company. The Company agrees with the several
Underwriters:
12.
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(a) If the Effective Time is prior to the execution and delivery of
this Agreement, the Company will file the Prospectus with the
Commission pursuant to and in accordance with subparagraph (1) (or, if
applicable and if consented to by the Representative, subparagraph (4))
of Rule 424(b) not later than the second business day following the
execution and delivery of this Agreement. The Company will advise the
Representative promptly of any such filing pursuant to Rule 424(b).
(a) The Company will advise the Representative promptly of any proposal
to amend or supplement the registration statement as filed or the
related prospectus, or the Registration Statement or the Prospectus,
and will not effect such amendment or supplementation without the
Representative's reasonable consent; and the Company will also advise
the Representative promptly of the effectiveness of the Registration
Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation of
the Registration Statement or the Prospectus and of the institution by
the Commission of any stop order proceedings in respect of the
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(a) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Securities Act in connection with sales by
any Underwriter or dealer, any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the
Securities Act, the Company will promptly notify the Representative of
such event and will promptly prepare and file with the Commission
(subject to the Representative's prior review pursuant to Section
5(b)), at its own expense, an amendment or supplement which will
correct such statement or omission, or an amendment which will effect
such compliance. Neither the Representative's consent to, nor the
Underwriters delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(a) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will cause the Trust to make generally
available to the Noteholders an earnings statement of the Trust
covering a period of at
<PAGE>
least 12 months beginning after the Effective Date which will satisfy
the provisions of Section 11(a) of the Securities Act. For the purpose
of the preceding sentence, "Availability Date" means the 90th day after
the end of the Trust's fourth fiscal quarter following the fiscal
quarter that includes such Effective Date.
(a) The Company will furnish to the Representative copies of the
Registration Statement (including all exhibits), each Preliminary
Prospectus, and, so long as delivery of a prospectus relating to the
Notes is required to be delivered under the Securities Act in
connection with sales by any Underwriter or dealer, the Prospectus and
all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Representative reasonably
requests. The Prospectus shall be so furnished on or prior to 3:00
p.m., New York time, on the business day following the later of the
execution and delivery of this Agreement or the Effective Time. All
other such documents shall be so furnished as soon as available. The
Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(a) The Company will arrange for the qualification of the Notes for
offering and sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Representative
may reasonably designate and will continue such qualifications in
effect so long as required for the distribution of the Notes; provided
that in connection therewith the Company shall not be required to
qualify as a foreign corporation to do business, to file a general
consent to service of process in any such jurisdiction or subject
itself to taxation in any jurisdiction to which it is not subject.
(a) For a period from the date of this Agreement until the retirement
of the Notes (i) the Company will furnish to the Representative and,
upon request, to each of the other Underwriters, copies of each
certificate and the annual statements of compliance delivered to the
Indenture Trustee pursuant to Section 3.09 of the Indenture and
Sections 3.08 and 3.09 of the Sale and Servicing Agreement and the
annual independent certified public accountant's servicing reports
furnished to the Indenture Trustee pursuant to Section 3.10 of the Sale
and Servicing Agreement, by first-class mail as soon as practicable
after such statements and reports are furnished to the Indenture
Trustee, and (ii) such other forms of periodic certificates or reports
as may be delivered to the Indenture Trustee, the Owner Trustee or the
Noteholders un-
<PAGE>
der the Indenture, the Sale and Servicing Agreement or the other Basic
Documents.
(a) So long as any Note is outstanding, the Company will furnish to the
Representative by first-class mail as soon as practicable, (i) all
documents distributed, or caused to be distributed, by the Company to
the Noteholders, (ii) all documents filed or caused to be filed by the
Company with the Commission pursuant to the Exchange Act or any order
of the Commission thereunder and (iii) such other information in the
possession of the Company concerning the Trust as the Representative
from time to time may reasonably request.
(a) Subject to the provisions of Section 9 hereof, the Company will pay
all expenses incident to the performance of its obligations under this
Agreement and will reimburse the Underwriters (if and to the extent
incurred by them) for any filing fees and other expenses (including
fees and disbursements of counsel) incurred by them in connection with
qualification of the Notes for sale in jurisdictions that the
Representative may designate pursuant to Section 5(f) hereof and
determination of their eligibility for investment under the laws of
such jurisdictions as the Representative reasonably designates and the
printing of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of the Notes, for any travel
expenses of the officers and employees of the Underwriters and any
other expenses of the Underwriters in connection with attending or
hosting meetings with prospective purchasers of the Notes and for
expenses incurred in distributing the Preliminary Prospectuses and the
Prospectuses (including any amendments and supplements thereto).
(a) To the extent, if any, that the rating provided with respect to the
Notes by Moody's Investors Service, Inc. ("Moody's") and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("Standard &
Poor's", together with Moody's, the "Rating Agencies"), is conditioned
upon the furnishing of documents or the taking of any other action by
the Company, the Company shall furnish such documents and take any such
other action.
(a) On or before the Closing Date, the Company and AutoNation Financial
Services shall annotate and indicate unambiguously in the computer
records of the Company and AutoNation Financial Services relating to
the Contracts to show the Trust's absolute ownership of the Contracts,
and from and after the Closing Date neither the Company nor AutoNation
Financial Serv-
<PAGE>
ices shall take any action inconsistent with the Trust's ownership of
such Contracts, other than as permitted by the Basic Documents.
1. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Notes on the Closing Date will
be subject to the accuracy of the representations and warranties on the part of
the Company and AutoNation Financial Services herein, to the accuracy of the
statements of officers of the Company and AutoNation Financial Services made
pursuant to the provisions hereof, to the performance by the Company and
AutoNation Financial Services of their respective obligations hereunder and to
the following additional conditions precedent:
2.
(a) The Representative shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time is prior to the
execution and delivery of this Agreement, shall be on or prior to the
date of this Agreement or, if the Effective Time is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing
of the amendment or post-effective amendment to the registration
statement to be filed shortly prior to such Effective Time), of Arthur
Andersen, LLP, in form and substance satisfactory to the Representative
and counsel for the Underwriters, confirming that they are independent
public accountants within the meaning of the Securities Act and the
applicable Rules and Regulations and stating in effect that (i) they
have performed certain specified procedures as a result of which they
determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of
the Trust, AutoNation Financial Services and the Company) set forth in
the Registration Statement and the Prospectus (and any supplements
thereto), agrees with the accounting records of the Trust, AutoNation
Financial Services and the Company, excluding any questions of legal
interpretation, and (ii) they have performed certain specified
procedures with respect to the Contracts.
For purposes of this subsection (a), (i) if the Effective Time
is subsequent to the execution and delivery of this Agreement,
"Registration Statement" shall mean the registration statement as
proposed to be amended by the amendment or post-effective amendment to
be filed shortly prior to the Effective Time, including all information
(if any) deemed to be a part of the initial registration statement as
of such time pursuant to Rule 430A(b), and (ii) "Prospectus" shall mean
the prospectus included in the Registration Statement. All financial
statements and schedules included in material incor-
<PAGE>
porated by reference into the Prospectus shall be deemed included in
the Registration Statement for purposes of this subsection.
(a) If the Effective Time is not prior to the execution and delivery of
this Agreement, the Effective Time shall have occurred not later than
10:00 p.m., New York time, on the date of this Agreement or such later
date as shall have been consented to by the Representative. If the
Effective Time is prior to the execution and delivery of this
Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a). Prior to
the Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Company or the Representative after due inquiry, shall be contemplated
by the Commission.
(a) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in or affecting particularly the
business, properties or financial condition of the Company, AutoNation
Financial Services or the Insurer which, in the judgment of a majority
in interest of the Underwriters (including the Representative),
materially impairs the investment quality of each Class of the Notes or
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for each Class of the Notes;
(ii) any suspension or limitation of trading in securities generally on
the New York Stock Exchange, or any setting of minimum prices for
trading on such exchange; (iii) any banking moratorium declared by
Federal, Delaware or New York authorities; or (iv) any outbreak or
escalation of major hostilities in which the United States is involved,
any declaration of war by Congress or any substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters (including the Representative), the
effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for each
Class of the Notes.
(a) The Representative shall have received an opinion of Weil, Gotshal
& Manges LLP, special counsel to the Company and AutoNation Financial
Services, dated the Closing Date and satisfactory in form and substance
to the Representative and counsel for the Underwriters, to the effect
that:
<PAGE>
(i) the Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Delaware, with full
corporate power and authority to own its properties and conduct its
business, in each case as described in the Prospectus; the Company is
duly qualified to do business and is in good standing in each
jurisdiction in which its ownership or lease of property or the conduct
of its business requires such qualification, except where the failure
to be so qualified and in good standing is not reasonably likely to
have a material adverse effect on the performance of its obligations
under the Basic Documents;
(i) AutoNation Financial Services has been duly incorporated and is
validly existing and in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and
conduct its business, in each case as described in the Prospectus;
AutoNation Financial Services is duly qualified to do business and is
in good standing in each jurisdiction in which its ownership or lease
of property or the conduct of its business requires such qualification,
except where the failure to be so qualified and in good standing is not
reasonably likely to have a material adverse effect on the performance
of its obligations under the Basic Documents;
(i) each of the direction by the Company to the Indenture Trustee to
authenticate the Notes and the direction by the Company to the Owner
Trustee to execute the Notes has been duly authorized by the Company
and, when the Notes have been duly executed and delivered by the Owner
Trustee and, when authenticated by the Indenture Trustee in accordance
with the terms of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be duly and validly
issued and outstanding and will be entitled to the benefits of the
Indenture;
(i) this Agreement and each other Basic Document to which the Company
or AutoNation Financial Services is a party (A) has been duly
authorized by all necessary corporate action by the Company or
AutoNation Financial Services, as applicable, (B) has been duly and
validly executed and delivered by the Company or AutoNation Financial
Services, as applicable, and (C) constitutes the legal, valid and
binding agreement of the Company or AutoNation Financial Services, as
applicable, enforceable against the Company or AutoNation Finan-
<PAGE>
cial Services, as applicable, in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights and remedies generally from time to time in effect, and subject,
as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing,
regardless of whether such enforceability is considered in a proceeding
in equity or at law, and except that rights to indemnification or
contribution thereunder may be limited by Federal and state securities
laws or public policy relating thereto;
(i) no Governmental Approval by any Governmental Authority is required
for the execution, delivery and performance by the Company of the Basic
Documents to which it is a party, for the execution, delivery and
performance by AutoNation Financial Services of the Basic Documents to
which it is a party or for the consummation of the transactions
contemplated by the Basic Documents, except (i) such Governmental
Approvals as have been obtained and made under the Securities Act, (ii)
such Governmental Approvals as may be required by state securities or
"blue sky" laws of any jurisdiction in connection with the offer and
sale of the Notes, as to which such counsel expresses no opinion, and
(iii) such Governmental Approvals specified in such opinion as have
already been obtained; where (i) the term "Applicable Laws" means the
laws, rules and regulations of the State of New York or the United
States; (ii) the term "Governmental Authority" means any legislative,
judicial, administrative or regulatory body of the State of New York or
the United States; and (iii) the term "Governmental Approval" means any
consent, approval, waiver, license, authorization or other action by or
filing with any Governmental Authority pursuant to Applicable Laws,
which are specified in such opinion;
(i) the execution, delivery and performance of this Agreement and the
other Basic Documents to which it is a party by the Company and the
execution, delivery and performance of this Agreement and the Basic
Documents to which it is a party by AutoNation Financial Services will
not conflict with or violate, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of AutoNation Financial Services or the
Company pursuant to (i) the terms of the Certificate of
<PAGE>
Incorporation or the By-Laws of either AutoNation Financial Services or
the Company or (ii) to the best of such counsel's knowledge and
information, any statute, rule, regulation or order of any Governmental
Authority or any material agreement or instrument known to such counsel
to which AutoNation Financial Services or the Company is a party or by
which AutoNation Financial Services or the Company or any of their
respective properties is bound, which, in either case would have a
material adverse effect on either AutoNation Financial Services or the
Company;
(i) no fact has come to the attention of such counsel which would lead
such counsel to believe that the Registration Statement or any
amendment thereto, as of its effective date or as of such Closing Date,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto, as of its issue date or as of such
Closing Date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; the
Registration Statement and the Prospectus complies in all material
respects with the requirements of the Securities Act and the rules and
regulations promulgated thereunder; and such counsel does not know of
any legal or governmental proceedings required to be described in the
Registration Statement or the Prospectus which are not described as
required or of any contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement which are not described
and filed as required; it being understood that such counsel need
express no opinion as to the financial statements or other financial,
numerical, statistical and quantitative information contained in the
Registration Statement or the Prospectus;
(i) to the best knowledge of such counsel, there is no litigation,
proceeding or governmental investigation to which the Company or
AutoNation Financial Services is a party or overtly threatened before
any court, administrative agency or other tribunal having jurisdiction
over AutoNation Financial Services or the Company, (i) that are
required to be disclosed in the Registration Statement, (ii) asserting
the
<PAGE>
invalidity of this Agreement, any other Basic Document or the Notes
(iii) seeking to prevent the issuance of the Notes or the consummation
of any of the transactions contemplated by this Agreement or the other
Basic Documents or (iv) which might materially and adversely affect the
performance by the Company or AutoNation Financial Services of its
obligations under, or the validity or enforceability of, this
Agreement, any other Basic Document or the Notes; and
(i) assuming that the Contracts are in substantially one of the forms
attached to such opinion, the Contracts are "chattel paper" as defined
in the UCC as in effect in the State of New York.
(a) The Representative shall have received an opinion of Weil, Gotshal &
Manges LLP, special counsel to the Company and AutoNation Financial Services,
dated the Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, to the effect that:
(i) the provisions of the Receivables Purchase Agreement are effective
to create a valid security interest under and as defined in Section
1-201(37) of the UCC as in effect in the State of New York in favor of
the Company in AutoNation Financial Services' rights in the Contracts
and the proceeds thereof (subject to Section 9-306 of the UCC as in
effect in the State of New York) as security for the obligations of
AutoNation Financial Services thereunder;
(i) the provisions of the Sale and Servicing Agreement are effective to
create a valid security interest under and as defined in Section
1-201(37) of the UCC as in effect in the State of New York in favor of
the Trust in the Company's rights in the Contracts and the proceeds
thereof (subject to Section 9-306 of the UCC as in effect in the State
of New York) as security for the obligations of the Company thereunder;
(i) the provisions of the Indenture are effective to create, in favor
of the Indenture Trustee, a valid security interest under and as
defined in Section 1-201(37) of the UCC as in effect in the State of
New York in the Trust's rights in the Contracts and the proceeds
thereof (subject to Section 9-306 of the UCC) as security for the
obligations of the Trust thereunder;
<PAGE>
(i) the Owner Trust Agreement is not required to be qualified under the
Trust Indenture Act;
(i) the Indenture has been duly qualified under the Trust Indenture
Act;
(i) the Registration Statement was declared effective under the
Securities Act as of the date specified in such opinion, the Prospectus
either was filed with the Commission pursuant to the subparagraph of
Rule 424(b) specified in such opinion on the date specified therein or
was included in the Registration Statement, and, such counsel is not
aware of any stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued. To the best
knowledge of such counsel, no proceedings for that purpose have been
instituted or overtly threatened by the Commission under the Securities
Act, and the Registration Statement and the Prospectus, and each
amendment thereof or supplement thereto, if any, as of their respective
effective or issue dates, complies as to form in all material respects
with the requirements of the Securities Act and the Rules and
Regulations;
(i) assuming due authorization, execution and delivery by the Indenture
Trustee and the Owner Trustee, the Indenture constitutes the legal,
valid and binding agreement of the Trust, enforceable against the Trust
in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights and remedies generally from
time to time in effect, and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing, (regardless of whether
such enforceability is considered in a proceeding in equity or at law),
and except that rights to indemnification or contribution thereunder
may be limited by Federal and state securities laws or public policy
relating thereto; and
(i) neither the Trust nor the Company is, and, after giving effect to
the issuance and sale of the Notes and the Residual Interest
Certificate and the application of the proceeds thereof, as described
in the Prospectus, neither the Trust nor the Company will be, an
"investment company" as defined in the Investment Company Act or a
company
<PAGE>
"controlled by" an "investment company" within the meaning of the
Investment Company Act.
(a) The Representative shall have received an opinion of Weil, Gotshal & Manges
LLP, special tax counsel for the Company, dated the Closing Date and
satisfactory in form and substance to the Representative and counsel for the
Underwriters, to the effect that for Federal income tax purposes (i) the Notes
will be characterized as indebtedness, (ii) the Trust will not be classified as
an association (or publicly traded partnership) taxable as a corporation and
(iii) the statements set forth in the Prospectus under the headings
"Summary-ERISA Considerations", "ERISA Considerations", "Summary-Tax Status" and
"Material Federal Income Tax Consequences" to the extent such statements
constitute matters of law or legal conclusions with respect thereto, are correct
in all material respects.
(a) The Representative shall have received from Skadden, Arps, Slate, Meagher &
Flom LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the validity of the Notes, the Registration
Statement, the Prospectus and other related matters as the Representative may
require, and the Company shall have furnished to such counsel such documents as
it may request for the purpose of enabling it to pass upon such matters.
(a) The Representative shall have received a certificate, dated the Closing
Date, of the Chairman of the Board, the President, any Vice-President or a
principal financial or accounting officer of each of the Company and AutoNation
Financial Services in which such officers, to the best of their knowledge after
reasonable investigation, shall state that: the representations and warranties
of the Company or AutoNation Financial Services, as applicable, in this
Agreement are true and correct in all material respects; the Company or
AutoNation Financial Services, as applicable, has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date in all material respects; the representations
and warranties of the Company or AutoNation Financial Services, as applicable,
in the Basic Documents are true and correct as of the dates specified in such
agreements in all material respects; the Company or AutoNation Financial
Services, as applicable, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied under such Basic Documents
at or prior to the Closing Date; no stop order suspending the effectiveness of
the Registration Statement has been issued and
<PAGE>
no proceedings for that purpose have been instituted or are contemplated by the
Commission; and, subsequent to the date of the Prospectus, there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or otherwise), business,
properties or results of operations of the Company or AutoNation Financial
Services or their respective businesses except as set forth in or contemplated
by the Prospectus or as described in such certificate.
(a) The Representative shall have received an opinion of Thacher, Proffitt &
Wood, counsel to the Indenture Trustee, dated the Closing Date and satisfactory
in form and substance to the Representative and counsel for the Underwriters, to
the effect that:
(i) the Indenture Trustee has been legally incorporated and, based upon
a certificate of good standing issued by the state in which
incorporated, is validly existing as a banking corporation in good
standing under the laws of the State of New York, and has the requisite
entity power and authority to execute and deliver the Basic Documents
to which the Indenture Trustee is a party and to perform its
obligations thereunder;
(i) with respect to the Indenture Trustee, the performance of its
obligations under the Basic Documents to which the Indenture Trustee is
a party and the consummation of the transactions contemplated thereby
do not require any consent, approval, authorization or order of, filing
with or notice to any court, agency or other governmental body, except
such as may be required under the securities laws of any state or such
as have been obtained, effected or given;
(i) with respect to the Indenture Trustee, the performance of its
obligations under the Basic Documents to which the Indenture Trustee is
a party and the consummation of the transactions contemplated thereby
will not result in: (a) any breach or violation of its certificate of
incorporation or bylaws or (b) any breach or violation of any statute
or regulation or, to the knowledge of such counsel, any order of any
court, agency or other governmental body;
(i) to the knowledge of such counsel, with respect to the Indenture
Trustee, there is no legal action, suit, proceeding or investigation
before any court, agency or other governmental body pending or
<PAGE>
threatened against it which, either in one instance or in the
aggregate, draws into question the validity of any of the Basic
Documents to which the Indenture Trustee is a party, seeks to prevent
the consummation of any of the transactions contemplated by any of the
Basic Documents to which the Indenture Trustee is a party or would
impair materially its ability to perform its obligations under any of
the Basic Documents to which the Indenture Trustee is a party;
(i) each of the Basic Documents to which the Indenture Trustee is a
party has been duly authorized, executed and delivered by the Indenture
Trustee and, assuming the necessary authorization, execution and
delivery thereof by the other parties thereto, is a valid and legally
binding agreement under the laws of the State of New York, enforceable
thereunder against the Indenture Trustee in accordance with its terms;
and
(i) the Notes have been duly authenticated and delivered by the
Indenture Trustee in accordance with the Indenture.
(a) The Representative shall have received an opinion of Emmet, Marvin & Martin,
counsel to the Owner Trustee, dated the Closing Date and satisfactory in form
and substance to the Representative and counsel for the Underwriters, to the
effect that:
(i) the Owner Trustee has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of
the State of Delaware;
(i) the Owner Trustee has the power and authority to execute, deliver
and perform its obligations under, the Owner Trust Agreement and, on
behalf of the Trust, under the Basic Documents to which the Trust is a
party, the Owner Trustee has duly authorized, executed and delivered
such Basic Documents and such Basic Documents (other than the Owner
Trust Agreement) constitute the legal, valid and binding obligation of
the Owner Trustee in accordance with their terms, except that certain
of such obligations may be enforceable solely against the Trust Estate,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights and remedies generally from time to time in effect, and subject,
as to enforceability, to gen-
<PAGE>
eral principles of equity, including principles of commercial
reasonableness, good faith and fair dealing, (regardless of whether
such enforceability is considered in a proceeding in equity or at law),
and except that rights to indemnification or contribution thereunder
may be limited by Federal and state securities laws or public policy
relating thereto;
(i) the Owner Trust Agreement has been duly authorized, executed and
delivered by the Owner Trustee;
(i) the execution and delivery by the Owner Trustee of the Owner Trust
Agreement and, on behalf of the Trust, of the other Basic Documents to
which it is a party and the performance by the Owner Trustee of its
obligations thereunder do not conflict with, result in a breach or
violation of, or constitute a default under the Certificate of
Incorporation or By-laws of the Owner Trustee; and
(i) the execution, delivery and performance by the Owner Trustee of the
Owner Trust Agreement and, on behalf of the Trust, of the other Basic
Documents to which it is a party do not require any consent, approval
or authorization of, or any registration or filing with, any Delaware
or United States Federal governmental authority having jurisdiction
over the banking or trust powers of the Owner Trustee, other than those
consents, approvals or authorizations as have been obtained and the
filing of the Certificate of Trust with the Secretary of State of the
State of Delaware, which have been duly filed.
(a) The Representative shall have received an opinion of Richards, Layton &
Finger, P.A., special Delaware counsel to the Trust, dated the Closing Date and
satisfactory in form and substance to the Representative and counsel for the
Underwriters, to the effect that:
(i) the Trust has been duly formed and is validly existing and in good
standing as a business trust under the Delaware Business Trust Act, 12
Del. C. ss.3801 et seq. (the "Delaware Act");
(i) the Trust has the power and authority under the Delaware Act and
the Owner Trust Agreement, and the Owner Trust Agreement authorizes the
Owner Trustee, to execute, deliver and perform its ob-
<PAGE>
ligations under each Basic Document to which it is a party
and the Notes;
(i) assuming that the security interest created by the
Indenture in the Contracts has been duly created and has
attached, upon the filing of a financing statement with the
Secretary of State of the State of Delaware the Indenture
Trustee will have a perfected security interest in the Trust's
rights in such Contracts and the proceeds thereof that
constitute either accounts, chattel paper or general
intangibles, and such security interest will be prior to any
other security interest granted by the Trust that is perfected
solely by the filing of financing statements under the UCC as
in effect in the State of Delaware (the "Delaware UCC"),
excluding purchase money security interests unders Section
9-312(4) of the Delaware UCC and temporarily perfected
security interests in proceeds unders Section 9-306(3) of the
Delaware UCC;
(i) assuming that the Contracts are in substantially one of
the forms attached to such opinion, the Contracts are "chattel
paper" as defined in the UCC as in effect in the State of
Delaware;
(i) no re-filing or other action is necessary under the
Delaware UCC in order to maintain the perfection of such
security interest except for the filing of continuation
statements at five year intervals;
(i) under 12 Del. C. Section 3805(b), no creditor of any
holder of a certificate (including any creditor of the Company
in its capacity as holder of the Residual Interest
Certificate) shall have any right to obtain possession of, or
otherwise exercise legal or equitable remedies with respect
to, the property of the Trust except in accordance with the
terms of the Owner Trust Agreement;
(i) assuming that such is the case for Federal tax purposes,
for Delaware state franchise and income tax purposes (A) the
Notes will be characterized as debt and (B) the Trust will not
be classified as an association (or publicly traded
partnership) taxable as a corporation; and
(i) the Owner Trust Agreement constitutes the legal, valid and
binding obligation of each of the Owner Trustee and the
Company, enforceable against each of them in accordance with
its terms (subject
<PAGE>
to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting
creditors' rights generally from time to time in effect, and
subject, as to enforceability, to general principles of
equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law), except that
such counsel need not express an opinion with respect to
indemnification or contribution provisions which may be deemed
to be in violation of the public policy underlying any law or
regulation.
(a) The Representative shall have received an opinion of Weil, Gotshal & Manges
LLP, counsel to the Company, dated the Closing Date and satisfactory in form and
substance to the Representative and counsel for the Underwriters, (i) with
respect to the characterization of the transfer of the Contracts by AutoNation
Financial Services to the Company and (ii) to the effect that should AutoNation
Financial Services become the debtor in a case under Title 11 of the United
States Code (the "Bankruptcy Code") and the Company would not otherwise properly
be a debtor in a case under the Bankruptcy Code, and if the matter were properly
briefed and presented to a court exercising bankruptcy jurisdiction, the court,
exercising reasonable judgment after full consideration of all relevant factors,
should not order, over the objection of the Noteholders, the substantive
consolidation of the assets and liabilities of the Company with those of
AutoNation Financial Services.
(a) The Representative shall have received evidence satisfactory to it and its
counsel that, on or before the Closing Date, UCC-1 financing statements have
been or are being filed in the office of the Secretary of State of the state of
(i) Florida reflecting the transfer of the interest of AutoNation Financial
Services in the Contracts and the proceeds thereof to the Company and the
transfer of the interest of the Company in the Contracts and the proceeds
thereof to the Trust and (ii) Delaware reflecting the grant of the security
interest by the Trust in the Contracts and the proceeds thereof to the Indenture
Trustee.
(a) The Representative shall have received an opinion of Weil, Gotshal & Manges
LLP, special counsel to the Company, dated the Closing Date and satisfactory in
form and substance to the Representative and the counsel for the Underwriters to
the effect that (i) the provisions of the Indenture are effective to create a
valid security interest in favor of the Indenture Trustee, to secure payment of
the Notes, in all "securities entitlements" (as defined in Section 8-102(a)(17)
of the UCC as in effect in the State of New York) with
<PAGE>
respect to "financial assets" (as defined in Section 8-102(a)(9) of the UCC as
in effect in the State of New York) now or hereafter credited to the Spread
Account (such securities entitlements, the "Securities Entitlements") and (ii)
no security interest of any other creditor of the Trust will be prior to the
security interest of the Indenture Trustee in such Securities Entitlements.
(a) Each Class of Notes shall have been rated in the highest rating category by
both Moody's or Standard & Poor's.
(a) The Representative shall have received a letter, dated the Closing Date, of
Arthur Andersen, LLP which meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection will be a
date not more than five days prior to such Closing Date for purposes of this
subsection.
(a) On or prior to the Closing Date, the Residual Interest Certificate shall
have been issued to the Company.
(a) The Representative shall either (i) be an addressee, together with the other
Underwriters, of each opinion rendered by Weil, Gotshal & Manges LLP and each
other counsel for the Company to the Insurer or either Standard & Poor's or
Moody's in connection with the rating of any Class of the Notes or (ii) have
received from Weil, Gotshal & Manges LLP and each other counsel for the Company,
a letter dated the Closing Date to the effect that the Underwriters may rely
upon each opinion rendered by such counsel to the Insurer or either Standard &
Poor's or Moody's in connection with the rating of any Class of the Notes, as if
each such opinion were addressed to the Underwriters.
(a) The Representative shall have received an opinion of Tripp Scott, P.A.,
special Florida counsel to the Company and AutoNation Financial Services, dated
the Closing Date, to the effect that:
(i) the financing statement on Form UCC-1 naming AutoNation Financial
Services as debtor is in appropriate form for filing in the relevant
filing office under the UCC as in effect in the State of Florida. Upon
the filing of such financing Statement in the relevant filing office,
the security interest in favor of the Company in the Contracts and
proceeds thereof will be perfected, and no other security interest
<PAGE>
of any other creditor of AutoNation Financial Services will be equal or
prior to such security interest;
(i) the financing statement on Form UCC-1 naming the Company as debtor
is in appropriate form for filing in the relevant filing office under
the UCC as in effect in the State of Florida. Upon the filing of such
financing statement in the relevant filing office, the security
interest in favor of the Owner Trustee in the Contracts and proceeds
thereof will be perfected, and no other security interest of any other
creditor of the Company will be equal or prior to such security
interest; and
(i) assuming that such is the case for Federal tax purposes, for
Florida state franchise and Florida state income tax purposes (A) the
Notes will be characterized as debt and (B) the Trust will not be
classified as an association (or publicly traded partnership) taxable
as a corporation.
(a) The Representative shall have received an opinion of Kutak Rock, counsel to
the Insurer, dated the Closing Date, to the effect that:
(i) the Insurer is a stock insurance corporation, duly incorporated and
validly existing under the laws of the State of New York. The Insurer
is validly licensed and authorized to issue the Insurance Policy and
perform its obligations under the Insurance Policy in accordance with
the terms thereof, under the laws of the State of New York;
(i) the execution and delivery by the Insurer of the Insurance Policy
are within the corporate power of the Insurer, and each has been
authorized by all necessary corporate action on the part of the
Insurer; the Insurance Policy has been duly executed and is the legal,
valid and binding obligation of the Insurer enforceable in accordance
with its terms, except that the enforcement of the Insurance Policy may
be limited by laws relating to bankruptcy, insolvency, reorganization,
moratorium, receivership and other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
<PAGE>
(i) the Insurer is authorized to deliver the Insurance Agreement and
the Indemnification Agreement and, assuming due execution by the other
parties thereto, the Insurance Agreement and the Indemnification
Agreement have been duly executed and are the valid and binding
obligations of the Insurer enforceable in accordance with their terms,
except that the enforcement of the Insurance Agreement and the
Indemnification Agreement may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium, receivership and
other similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law) and, in the
case of the Indemnification Agreement, also subject to principles of
public policy limiting the right to enforce the indemnification
provisions contained therein insofar as such provisions relate to
indemnification for liabilities arising under the securities laws;
(i) no consent, approval, authorization or order of any state or
Federal court or governmental agency or body is required on the part of
the Insurer, the lack of which would adversely affect the validity or
enforceability of either the Insurance Policy, the Insurance Agreement
or the Indemnification Agreement; to the extent failure to comply with
applicable legal requirements would adversely affect validity or
enforceability of the Insurance Policy, the Insurance Policy form has
been filed with, and approved by, all governmental authorities having
jurisdiction over the Insurer in connection with such Insurance Policy;
(i) to the extent the Insurance Policy constitutes a security within
the meaning of Section 2(1) of the Securities Act, it is a security
that is exempt from the registration requirements of the Securities
Act; and
(i) the information set forth under the headings "Description of the
Insurance Policy" in the Prospectus and "Form of Note Guaranty
Insurance Policy" in Exhibit A to the Prospectus insofar as such
information constitutes a description of the Insurance Policy,
accurately summarizes such Insurance Policy.
(a) Each of the Basic Documents (originals or copies thereof, as appropriate)
shall have been duly executed and delivered to the Representative by the parties
thereto.
<PAGE>
The Company will furnish the Representative with such conformed copies
of such opinions, certificates, letters and documents as the Representative
reasonably requests.
The Representative may, in its sole discretion, waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder.
1. Indemnification and Contribution.
2.
(a) The Company and AutoNation Financial Services will, jointly and
severally, indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any Preliminary Prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided
that neither the Company nor AutoNation Financial Services
will be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity
with written information furnished to the Company or AutoNation
Financial Services by any Underwriter through the Representative
specifically for use therein, it being understood and agreed that the
only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below, the information
furnished to the Company by the Insurer set forth under the heading
"The Insurer" in, or incorporated by reference in, the Prospectus and
the information furnished to the Company by the Insurer set forth under
the heading "The Insurance Policy" in the Prospectus; provided,
further, that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any Preliminary
Prospectus, the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any
<PAGE>
Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased the Notes, to the extent that the
untrue statement or omission or alleged untrue statement or omission
was eliminated or remedied in the Prospectus, which Prospectus was
required to be delivered by such Underwriter under the Securities Act
to such person and was not so delivered if the Company or AutoNation
Financial Services had previously furnished copies thereof to such
Underwriter; and provided, further, that any payments by the Company
pursuant to this Section 7(a) shall be payable solely from amounts
received pursuant to clause (xii) of Section 4.03(a) of the Sale and
Servicing Agreement.
(a) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company and AutoNation Financial Services against any
losses, claims, damages or liabilities to which the Company or
AutoNation Financial Services may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any Preliminary Prospectus, or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Company by such Underwriter through the Representative specifically
for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company or AutoNation Financial Services in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus
furnished on behalf of each Underwriter: (i) the statements in the
second to last paragraph of the cover page of the Prospectus concerning
the terms of the offering by the Underwriters; (ii) the concession and
reallowance figures appearing in the second paragraph under the heading
"Underwriting" in the Prospectus; (iii) the statements in the first
sentence of the fourth paragraph under the heading "Underwriting" in
the Prospectus; and (iv) the statements in the fifth paragraph
(concerning stabilizing and other activities) under the heading
"Underwriting" in the Prospectus.
<PAGE>
(a) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof and after acceptance by the indemnified party of such counsel,
the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party if
indemnity could have been sought hereunder by such indemnified party
unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject
matter of such action.
(a) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or
(b) above (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Notes or (ii) if
the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on
<PAGE>
the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Notes underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations and
not joint.
(a) The obligations of the Company or AutoNation Financial Services
under this Section shall be in addition to any liability which the
Company or AutoNation Financial Services may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Securities Act; and
the obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each director of the Company or AutoNation Financial Services, to each
officer of the Company and AutoNation Financial Services who has signed
the Registration Statement and to each person, if any, who controls the
Company or AutoNation Financial Services within the meaning of the
Securities Act.
<PAGE>
1. Default of Underwriters. If any Underwriter or Underwriters default in their
obligations to purchase Notes hereunder on the Closing Date and the aggregate
principal amount of Notes that such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the total principal amount
of Notes that the Underwriters are obligated to purchase on such Closing Date,
the Representative may make arrangements satisfactory to the Company for the
purchase of such Notes by other persons, including any of the Underwriters, but
if no such arrangements are made by such Closing Date, the nondefaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Notes that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate principal amount of Notes with respect
to which such default or defaults occur exceeds 10% of the total principal
amount of Notes that the Underwriters are obligated to purchase on such Closing
Date and arrangements satisfactory to the Representative and the Company for the
purchase of such Notes by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Section 9. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
2.
3. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or AutoNation Financial Services or their respective officers and of the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter or the Company or
AutoNation Financial Services or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Notes. If this Agreement is terminated pursuant to Section 8
or if for any reason the purchase of the Notes by the Underwriters is not
consummated, the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 5 and the respective obligations of the
Company, AutoNation Financial Services and the Underwriters pursuant to Section
7 shall remain in effect. If the purchase of the Notes by the Underwriters is
not consummated for any reason other than solely because of the termination of
this Agreement pursuant to Section 8 or the occurrence of any event specified in
clause (ii), (iii) or (iv) of Section 6(c), the Company and AutoNation Financial
Services, jointly and severally, will reimburse the Underwriters for all out-of
pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Notes.
<PAGE>
4.
5. Notices. All communications hereunder will be in writing and, if sent to the
Underwriters, will be mailed, delivered or sent by facsimile and confirmed to
the Representative at Chase Securities Inc., 270 Park Avenue, 7th Floor, New
York, New York 10017, Attention: Brad Dansker (facsimile: (212) 834-6562) or, if
sent to the Company, will be mailed, delivered or sent by facsimile transmission
and confirmed to it at 200 South Andrews Avenue, Fort Lauderdale, Florida 33301,
Attention: Attention: Kathleen W. Hyle, President (facsimile: (954) 769-7297),
and if to AutoNation Financial Services, will be mailed, delivered or sent by
facsimile transmission and confirmed to it at 200 South Andrews Avenue, Fort
Lauderdale, Florida 33301, Attention: Kathleen W. Hyle, Vice President--Finance
and Treasurer (facsimile: (954) 769-7297); provided that any notice to an
Underwriter pursuant to Section 7 will be mailed, delivered or telecopied and
confirmed to such Underwriter.
6.
7. No Bankruptcy Petition. Each Underwriter agrees that, prior to the date which
is one year and one day after the payment in full of all securities issued by
the Company or by a trust for which the Company was the depositor which
securities were rated by any nationally recognized statistical rating
organization, together with all amounts due and owing to the Insurer under the
Basic Documents or any other transaction documents relating to any such
securities, it will not institute against, or join or intentionally cooperate
with any other person in instituting against, the Company or the Trust any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other proceedings under any Federal or state bankruptcy or similar law.
8.
9. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
10.
11. Representation of Underwriters. The Representative will act for the several
Underwriters in connection with this financing, and any action under this
Agreement taken by the Representative will be binding upon all the Underwriters.
12.
13. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original but all such counterparts shall
together constitute one and the same Agreement.
14.
15. Applicable Law; Submission to Jurisdiction.
16.
<PAGE>
17. (a) This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
18.
19. (b) Each of the Company and AutoNation Financial Services hereby submits to
the nonexclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
20.
21.
<PAGE>
If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return to each of the Company
and AutoNation Financial Services one of the counterparts hereof, whereupon it
will become a binding agreement among the Company, AutoNation Financial Services
and the several Underwriters in accordance with its terms.
Very truly yours,
AUTONATION RECEIVABLES CORPORATION
By: /s/ Leland F. Wilson
-------------------------------
Name: Leland F. Wilson
Title: Treasurer
AUTONATION FINANCIAL
SERVICES CORP.
By: /s/ Kathleen W. Hyle
-------------------------------
Name: Kathleen W. Hyle
Title: Assistant Treasurer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written:
CHASE SECURITIES INC., acting on behalf of itself
and as the Representative of the several Underwriters
By: /s/ Brad Dansker
----------------
Name: Brad Dansker
Title: Vice President
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Underwriter Amount of Amount of Amount of Amount of
Class A-1 Class A-2 Class A-3 Class A-4
Notes Notes Notes Notes
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Chase Securities Inc. $35,937,500 $90,275,000 $56,350,000 $43,642,500
First Union Securities, Inc. $35,937,500 $90,275,000 $56,350,000 $43,642,500
Bank One Capital Markets, Inc. $18,750,000 $47,100,000 $29,400,000 $22,770,000
Credit Suisse First Boston $18,750,000 $47,100,000 $29,400,000 $22,770,000
Bear, Stearns & Co. Inc. $15,625,000 $39,250,000 $24,500,000 $18,975,000
Total: $125,000,000 $314,000,000 $196,000,000 $151,800,000
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
OWNER TRUST AGREEMENT
between
AUTONATION RECEIVABLES CORPORATION,
as Depositor
THE BANK OF NEW YORK (DELAWARE),
as Owner Trustee
Dated as of October 1, 1999
- --------------------------------------------------------------------------------
ANRC AUTO OWNER TRUST 1999-A
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS
SECTION 1.01. Capitalized Terms..........................................1
SECTION 1.02. Other Definitional Provisions..............................4
SECTION 1.03. Usage of Terms.............................................5
SECTION 1.04. Section References.........................................5
SECTION 1.05. Accounting Terms...........................................5
ARTICLE II ORGANIZATION
SECTION 2.01. Name.......................................................6
SECTION 2.02. Office.....................................................6
SECTION 2.03. Purposes and Powers........................................6
SECTION 2.04. Appointment of Owner Trustee...............................7
SECTION 2.05. Initial Capital Contribution of Trust Estate...............7
SECTION 2.06. Declaration of Trust.......................................7
SECTION 2.07. Title to Trust Property....................................8
SECTION 2.08. Situs of Trust.............................................8
SECTION 2.09. Representations and Warranties of the Depositor............9
SECTION 2.10. [RESERVED]................................................10
ARTICLE III CERTIFICATE
SECTION 3.01. Initial Ownership......................................... 11
SECTION 3.02. The Residual Interest Certificate and the Notes.......... .11
SECTION 3.03. Execution, Authentication and Delivery of the
Residual Interest Certificate and the Notes.... ....11
SECTION 3.04. Restrictions on Transfer............................... ...12
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Residual
Interest Certificate...............................12
SECTION 3.06. Maintenance of Office or Agency............................13
SECTION 3.07 Special Voting Provisions..................................13
ARTICLE IV ACTIONS BY OWNER TRUSTEE
SECTION 4.01. Prior Notice to Owners with Respect to Certain Matters.....14
SECTION 4.02. Action by the Depositor with Respect to Certain Matters....16
SECTION 4.03. Action by the Owners with Respect to Bankruptcy............16
SECTION 4.04. Restrictions on Power......................................17
SECTION 4.05 Majority Control...........................................17
i
<PAGE>
ARTICLE V APPLICATION OF TRUST FUNDS: CERTAIN DUTIES
SECTION 5.01. [RESERVED].................................................18
SECTION 5.02. Application of Trust Funds.................................18
SECTION 5.03. Method of Payment..........................................18
SECTION 5.04. No Segregation of Monies; No Interest......................18
SECTION 5.05. Accounting and Reports to the Noteholders, Owners,
the Internal Revenue Service and Others............19
SECTION 5.06. Signature on Returns; Tax Matters Partner..................19
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01. General Authority..........................................20
SECTION 6.02. General Duties.............................................20
SECTION 6.03. Action Upon Instruction....................................21
SECTION 6.04. No Duties Except as Specified in this Agreement
or in Instructions..................................22
SECTION 6.05. No Action Except Under Specified Documents or
Instructions........................................22
SECTION 6.06. Restrictions...............................................22
ARTICLE VII CONCERNING THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties............................23
SECTION 7.02. Furnishing of Documents....................................25
SECTION 7.03. Representations and Warranties.............................25
SECTION 7.04. Reliance; Advice of Counsel................................26
SECTION 7.05. Not Acting in Individual Capacity..........................27
SECTION 7.06. Owner Trustee Not Liable for Residual Interest
Certificate, Notes or Contracts.....................27
SECTION 7.07. Owner Trustee May Own Residual Interest
Certificates and Notes..............................28
ARTICLE VIII COMPENSATION AND INDEMNIFICATION OF OWNER
TRUSTEE
SECTION 8.01. Owner Trustee's Fees and Expenses..........................29
SECTION 8.02. Indemnification............................................29
SECTION 8.03. Payments to the Owner Trustee..............................30
ARTICLE IX TERMINATION OF TRUST AGREEMENT
ii
<PAGE>
SECTION 9.01. Termination of Trust Agreement.............................31
iii
<PAGE>
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER
TRUSTEE
SECTION 10.01. Eligibility Requirements for Owner Trustee................33
SECTION 10.02. Resignation or Removal of Owner Trustee...................33
SECTION 10.03. Successor Owner Trustee...................................34
SECTION 10.04. Merger or Consolidation of Owner Trustee..................35
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.............35
ARTICLE XI MISCELLANEOUS
SECTION 11.01. Supplements and Amendments................................38
SECTION 11.02. No Legal Title to Trust Estate in Owner...................39
SECTION 11.03. Limitations on Rights of Others...........................40
SECTION 11.04. Notices...................................................40
SECTION 11.05. Severability of Provisions................................40
SECTION 11.06. Counterparts..............................................40
SECTION 11.07. Successors and Assigns....................................41
SECTION 11.08. No Petition...............................................41
SECTION 11.09. No Recourse...............................................41
SECTION 11.10. Headings..................................................41
SECTION 11.11. Governing Law.............................................41
SECTION 11.12. Depositor Payment Obligation..............................41
SECTION 11.13. Certain Matters Regarding the Insurer.....................42
SECTION 11.14. Fiduciary Duties..........................................42
SECTION 11.15. Third Party Beneficiary...................................42
EXHIBIT A................................................................A-1
EXHIBIT B................................................................B-1
iv
<PAGE>
v
<PAGE>
vi
<PAGE>
vii
<PAGE>
This AMENDED AND RESTATED OWNER TRUST AGREEMENT, dated as of October
1, 1999 (as amended, supplemented or otherwise modified and in effect from time
to time, this "Agreement"), is between AUTONATION RECEIVABLES CORPORATION, a
Delaware corporation, as depositor (together with its successors and assigns in
such capacity, the "Depositor"), and The Bank of New York (Delaware) a Delaware
banking corporation, as owner trustee (together with its successors and assigns
in such capacity, the "Owner Trustee").
ARTICLE II
DEFINITIONS
SECTION 1.01. Capitalized Terms. Except as otherwise provided in
this Agreement, whenever used in this Agreement the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
"Administration Agreement" shall mean that certain Administration
Agreement, dated as of October 1, 1999, by and among the Trust, the Depositor,
the Indenture Trustee and AutoNation Financial Services, as administrator.
"Administrator" shall mean the Person acting as "Administrator"
under the Administration Agreement.
"Agreement" shall have the meaning specified in the recitals hereto.
"Applicants" shall have the meaning assigned to such term in Section
3.07.
"AutoNation Financial Services" shall mean AutoNation Financial
Services Corp. and its successors and assigns.
"Basic Documents" shall have the meaning set forth in the Indenture.
"Benefit Plan" shall mean (i) an employee benefit plan (as such term
is defined in Section 3(3) of ERISA) that is subject to the provisions of Title
I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity.
<PAGE>
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. ss. 3801, et seq., as the same may be amended from
time to time.
"Certificate of Trust" shall mean the Certificate of Trust filed for
the Trust pursuant to Section 3810(a) of the Business Trust Statute,
substantially in the form of Exhibit A hereto.
"Closing Date" shall mean October 22, 1999.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.
"Depositor" shall mean AutoNation Receivables Corporation, in its
capacity as depositor hereunder, and its successors.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Expenses" shall have the meaning assigned to such term in Section
8.02.
"Holder" or "Residual Interest Certificateholder" shall mean the
Person in whose name a Residual Interest Certificate is registered on the
Residual Interest Certificate Register.
"Indemnified Parties" shall have the meaning assigned to such term
in Section 8.02.
"Indenture" shall mean the indenture dated as of October 1, 1999,
between the Trust, as Issuer, and The Chase Manhattan Bank, as Indenture
Trustee.
"Insurer" shall mean MBIA Insurance Corporation, a New York stock
insurance company, and its permitted successors and assigns in such capacity.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes, in each case issued pursuant to the
Indenture.
2
<PAGE>
"Owner" shall mean each Holder of a Residual Interest Certificate.
"Owner Trustee" shall mean The Bank of New York (Delaware), a
Delaware banking corporation, not in its individual capacity but solely as owner
trustee under this Agreement, and any successor Owner Trustee hereunder.
"Owner Trustee Corporate Trust Office" shall mean the office of the
Owner Trustee at which its corporate trust business shall be principally
administered, which initially shall be White Clay Center, Route 273, Newark,
Delaware 19711, Attention: Corporate Trust Adminstration, or such other office
at such other address as the Owner Trustee may designate from time to time by
notice to the Servicer, the Depositor and the Insurer.
"Percentage Interest" shall mean, with respect to any single
Residual Interest Certificate, the percentage interest in the Trust such
Residual Interest Certificate represents.
"Person" shall mean a legal person, including any individual,
corporation, estate, partnership, limited liability company or limited liability
partnership, joint venture, association, joint stock company, business trust,
trust (including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"Record Date" shall mean, with respect to any Distribution Date, the
last day of the immediately preceding calendar month.
"Residual Interest Certificate" shall mean the certificate
evidencing a beneficial interest in the Trust, substantially in the form
attached hereto as Exhibit B.
"Residual Interest Certificate Balance" shall mean the aggregate
outstanding amount of the Residual Interest Certificate as of any date.
"Residual Interest Certificate Register" and "Residual Interest
Certificate Registrar" shall mean the register maintained and the registrar (or
any successor thereto) appointed pursuant to Section 3.04.
"Responsible Officer" shall mean any officer of the Owner Trustee
within the Owner Trustee Corporate Trust Office, including any vice president,
assistant vice president, assistant treasurer, assistant secretary or other
officer or
3
<PAGE>
assistant officer of the Owner Trustee, customarily performing functions similar
to those performed by the people who at such time shall be officers and has
direct responsibility for the administration of this Agreement.
"Sale and Servicing Agreement" shall mean that certain Sale and
Servicing Agreement, dated as of October 1, 1999, by and among the Trust, as
Issuer, the Depositor, as Seller, AutoNation Financial Services, as Servicer and
Custodian, and the Indenture Trustee, as the same may be amended, supplemented
or otherwise modified and in effect from time to time.
"Secretary of State" shall mean the Secretary of State of the State
of Delaware.
"Seller" shall mean AutoNation Receivables Corporation, a Delaware
corporation, in its capacity as seller under the Sale and Servicing Agreement,
and its permitted successors and assigns.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the owner trust established by this Agreement.
"Trust Estate" shall have the meaning set forth in the Sale and
Servicing Agreement.
"Trust Property" shall have the meaning set forth in the Sale and
Servicing Agreement.
SECTION 1.02. Other Definitional Provisions. Capitalized terms used
herein that are not otherwise defined herein shall have the meanings ascribed
thereto in, or incorporated by reference into, the Sale and Servicing Agreement
or, if not defined therein, in the Indenture.
SECTION 1.03. Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; 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
amendments, modifications and supplements thereto or any changes therein entered
into in
4
<PAGE>
accordance with their respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and assigns; and the
term "including" means "including without limitation".
SECTION 1.04. Section References. All section references, unless
otherwise indicated, shall be to Sections in this Agreement.
SECTION 1.05. Accounting Terms. All accounting terms used but not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States of America.
5
<PAGE>
ARTICLE II
ORGANIZATION
SECTION 2.01. Name. The Trust created hereby shall be known as ANRC
Auto Owner Trust 1999-A, in which name the Owner Trustee may conduct the
activities of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued, and in which name the Owner Trustee may
perform its duties hereunder.
SECTION 2.02. Office. The office of the Trust shall be in care of
the Owner Trustee at the Owner Trustee Corporate Trust Office or at such other
address in Delaware as the Owner Trustee may designate by written notice to the
Depositor, any Owners (other than the Depositor), the Servicer and the Insurer.
SECTION 2.03. Purposes and Powers. The sole purpose of the Trust is
to conserve the Trust Estate and collect and disburse the periodic income there
from for the use and benefit of the Owners, and in furtherance of such purpose
to engage in the following ministerial activities:
(i) to issue the Notes pursuant to the Indenture and the Residual
Interest Certificate[s] pursuant to this Agreement and to sell the Notes;
(ii) with the proceeds of the sale of the Notes, to purchase the
Contracts, to cause the Spread Account to be funded and to pay the
organizational, start-up and transactional expenses of the Trust;
(iii) to assign, grant, transfer, pledge, mortgage and convey
("Grant") the Trust Estate pursuant to the Indenture and to hold, manage
and distribute to the Depositor pursuant to the Sale and Servicing
Agreement any portion of the Trust Estate released from the lien of, and
remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation
of the Trust Estate and the making of distributions to the Noteholders and
the Owners; and
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(vi) to engage in those activities, including entering into
agreements, that are necessary to accomplish the foregoing or are
incidental thereto or connected therewith.
The Trust is hereby authorized to engage in the foregoing
activities. The Trust shall not engage in any activity other than in connection
with the foregoing or other than as required or authorized by the terms of this
Agreement or the Basic Documents.
SECTION 2.04. Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein and in the
Business Trust Statute, and the Owner Trustee hereby accepts such appointment.
The Owner Trustee is hereby authorized and directed to file the Certificate of
Trust with the Secretary of State.
SECTION 2.05. Initial Capital Contribution of Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, an amount equal to $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Trust Estate and
shall be held by the Owner Trustee. The Depositor shall pay organizational
expenses of the Trust as they may arise or shall, upon the request of the Owner
Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the
Owner Trustee.
SECTION 2.06. Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Trust Estate in trust upon and subject to the
conditions set forth herein for the sole purpose of conserving the Trust Estate
and collecting and disbursing the periodic income therefrom for the use and
benefit of the Owners, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that the Trust constitute a
business trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such business trust. It is also the
intention of the parties hereto that, solely for income and franchise tax
purposes, on and after the Closing Date, so long as the Trust has only one
holder of the Residual Interest Certificate, the Trust shall be disregarded as a
separate entity. At such time as the Trust has more than one holder of any
certificate issued by the Trust (including any holders of the Residual Interest
Certificate) the Trust will be treated as a partnership for income and franchise
tax purposes. The Depositor (and any future Owner by the purchase of an interest
in a residual Interest Certificate will be deemed to have agreed) and the Owner
Trustee agree to take no action inconsistent with such tax treatment. The Trust
shall not elect
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to be treated as an association under Section 301.7701-3(a) of the regulations
of the United States Department of the Treasury for federal income tax purposes.
The parties agree that, unless otherwise required by appropriate tax
authorities, the Trust will file or cause to be filed annual or other necessary
returns, reports and other forms consistent with the foregoing characterization
of the Trust for such tax purposes. Effective as of the date hereof, the Owner
Trustee shall have all rights, powers and duties set forth herein and in the
Business Trust Statute for the sole purpose and to the extent necessary to
accomplish the purposes of the Trust as set forth in Section 2.03.
SECTION 2.07. Title to Trust Property. Subject to the Indenture,
legal title to all the Trust Estate shall be vested at all times in the Trust as
a separate legal entity except where applicable law in any jurisdiction requires
title to any part of the Trust Estate to be vested in a trustee or trustees, in
which case title shall be deemed to be vested in the Owner Trustee and/or a
separate trustee, as the case may be.
The Owners shall not have legal title to any part of the Trust
Estate. The Owners shall be entitled to receive distributions with respect to
the undivided ownership interest therein only in accordance with Articles V and
IX herein. No transfer, by operation of law or otherwise, of any right, title or
interest of the Owners to and in their ownership interest in the Trust Estate
shall operate to terminate this Agreement or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Trust
Estate.
SECTION 2.08. Situs of Trust. The Trust will be located in the State
of Delaware and administered in the States of Delaware and New York. All bank
accounts maintained on behalf of the Trust shall be located in the State of
Delaware or the State of New York. The Trust shall not have any employees;
provided that nothing herein shall restrict or prohibit the Owner Trustee from
having employees within or without the State of Delaware. Payments will be
received by the Trust only in Delaware or New York and payments will be made by
the Trust only from Delaware or New York. The only office of the Trust will be
at the Owner Trustee Corporate Trust Office. The Owner Trustee Corporate Trust
Office shall not at any time be located in the State of Florida and no Owner
Trustee, present or future, may at any time relocate the Owner Trustee Corporate
Trust Office outside the state of Delaware.
SECTION 2.09. Representations and Warranties of the Depositor.
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(a) The Depositor hereby represents and warrants to the Owner
Trustee and the Insurer that:
(i) The Depositor is duly organized and validly existing as a
corporation organized and existing and in good standing under the laws of
the State of Delaware, with power and authority to own its properties and
to conduct its business and had at all relevant times, and has, power,
authority and legal right to acquire and own the Contracts.
(ii) The Depositor is duly qualified to do business as a foreign
corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualifications.
(iii) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Depositor has full
power and authority to sell and assign the property to be sold and
assigned to and deposited with the Owner Trustee on behalf of the Trust as
part of the Trust Estate and has duly authorized such sale and assignment
and deposit with the Owner Trustee on behalf of the Trust by all necessary
corporate action. The execution, delivery and performance of this
Agreement have been duly authorized by the Depositor by all necessary
corporate action. The Depositor has duly executed and delivered this
Agreement, and this Agreement constitutes the legal, valid and binding
obligation of the Depositor enforceable against the Depositor in
accordance with its terms.
(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in the breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time) a default under, the certificate
of incorporation or bylaws of the Depositor, or any indenture, agreement
or other instrument to which the Depositor is a party or by which it is
bound; nor result in the creation or imposition of any lien upon any of
the properties of the Depositor pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the Basic
Documents); nor violate any law or any order, rule or regulation
applicable to the Depositor of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties.
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(v) There are no proceedings or investigations pending, or to the
Depositor's best knowledge threatened, before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties: (A) asserting the
invalidity of this Agreement, any of the other Basic Documents or the
Residual Interest Certificate, (B) seeking to prevent the issuance of the
Residual Interest Certificate or the consummation of any of the
transactions contemplated by this Agreement or any of the other Basic
Documents, (C) seeking any determination or ruling that might materially
and adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement, any of the
other Basic Documents or the Residual Interest Certificate or (D)
involving the Depositor and which might materially and adversely affect
the federal income tax or other federal, state or local tax attributes of
the Residual Interest Certificate.
SECTION 2.10. [RESERVED]
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ARTICLE III
CERTIFICATE
SECTION 3.01. Initial Ownership. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.05, the Depositor shall
be the sole beneficiary of the Trust.
SECTION 3.02. The Residual Interest Certificate and the Notes.
(a) On the Closing Date, each Residual Interest Certificate shall be
executed by the Owner Trustee on behalf of the Trust by manual or facsimile
signature of an authorized officer of the Owner Trustee, and authenticated by
the Owner Trustee by the manual or facsimile signature of an authorized officer
of the Owner Trustee and shall be deemed to have been validly issued to the
Depositor when so executed and authenticated. The Residual Interest Certificate,
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Owner
Trustee shall be validly issued by the Trust, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
execution, authentication and delivery of the Residual Interest Certificate or
did not hold such offices at the date of the Residual Interest Certificate. The
Residual Interest Certificate shall be dated the date of its authentication.
(b) The Notes shall be executed by the Owner Trustee on behalf of
the Trust by manual or facsimile signature of an authorized officer of the Owner
Trustee, and shall be authenticated as provided in the Indenture. Notes bearing
the manual or facsimile signature of an individual who was, at the time when
such signature was affixed, authorized to sign on behalf of the Owner Trustee
shall be deemed to have been validly executed by the Trust, notwithstanding that
such individual has ceased to be so authorized prior to the execution and
delivery of such Notes or did not hold such office at the date of such Notes.
SECTION 3.03. Execution, Authentication and Delivery of the Residual
Interest Certificate and the Notes. The Owner Trustee shall cause to be
executed, authenticated and delivered upon the order of the Depositor, in
exchange for the Contracts and the other assets of the Trust, simultaneously
with the sale, assignment and transfer to the Trust of the Contracts, and such
other assets, (a) the Residual Interest Certificate evidencing the entire
ownership of the Owner Trust and (b) Notes executed by the Trust in aggregate
principal amount of, in the case of the (i) Class A-1 Notes, $125,000,000, (ii)
Class A-2 Notes, $314,000,000, (iii) Class A-
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3 Notes, $196,000,000, and (iv) Class A-4 Notes, $151,800,000. The Owner Trustee
is hereby authorized to direct, on behalf of the Trust the Indenture Trustee to
authenticate and deliver the Notes upon the written order of the Depositor. The
Residual Interest Certificate shall not be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Residual
Interest Certificate a certificate of authentication substantially in the form
set forth in the form of Certificate attached hereto as Exhibit B executed by
the Owner Trustee or another authenticating agent of the Owner Trustee, by
manual or facsimile signature, and such certificate upon the Residual Interest
Certificate shall be conclusive evidence, and the only evidence, that such
Residual Interest Certificate has been duly authenticated and delivered
hereunder. Upon issuance, authorization and delivery pursuant to the terms
hereof, the Residual Interest Certificate will be entitled to the benefits of
this Agreement. The Residual Interest Certificate shall be dated the date of its
authentication.
SECTION 3.04. Restrictions on Transfer. The Residual Interest
Certificate (or any interest therein) may not be sold, transferred, assigned,
participated, pledged or otherwise disposed of by the Depositor or by any other
Owner to any Person unless (i) the transfer is permitted under the applicable
federal and state securities law and (ii) prior to such transfer, (A) an Opinion
of Counsel in form and content acceptable to the Owner Trustee and to the
Indenture Trustee is delivered to the Owner Trustee, the Insurer and to the
Indenture Trustee stating, among other things, that such transfer shall not
cause the Trust to be classified as an association (or publicly traded
partnership) taxable as a corporation for federal income tax purposes, (B) prior
notice is given to each Rating Agency and (C) the Insurer has provided its prior
written consent.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Residual Interest
Certificate. If (a) any mutilated Residual Interest Certificate is surrendered
to the Owner Trustee, or the Owner Trustee receives evidence to its satisfaction
of the destruction, loss or theft of any Residual Interest Certificate, and (b)
there is delivered to the Owner Trustee such security or indemnity as may be
required by it to save it harmless, then, in the absence of notice that such
Residual Interest Certificate has been acquired by a bona fide purchaser, the
Owner Trustee on behalf of the Trust shall execute and the Owner Trustee or its
authenticating agent, shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Residual Interest Certificate,
a new Residual Interest Certificate. In connection with the issuance of a new
Residual Interest Certificate under this Section 3.05, the Owner Trustee may
require the payment by the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto. Any duplicate
Residual Interest Certificate issued pursuant to this Section 3.05 shall
constitute
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complete and indefeasible evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Residual Interest
Certificate shall be found at any time.
SECTION 3.06. Maintenance of Office or Agency. The Owner Trustee
shall maintain in The City of New York an office or offices or agency or
agencies where notices and demands to or upon the Owner Trustee in respect of
the Residual Interest Certificate and the Basic Documents may be served. The
Owner Trustee hereby designates the office of The Bank of New York, 101 Barclay
Street, Floor 12E, New York, NY 10286, Attention: Corporate Trust
Administration, as its office for such purposes. The Owner Trustee shall give
prompt written notice to the Depositor, the Servicer and the Insurer of any
change in location of such office or agency.
SECTION 3.07. Special Voting Provisions. So long as any Owner is
domiciled in the State of Florida, such Owner's Certificate or Residual Interest
Certificate shall not be counted in any vote of the Owners.
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.01. Prior Notice to Owners with Respect to Certain
Matters. Subject to the provisions and limitations of Section 4.04, with respect
to the following matters, the Owner Trustee shall not take any action unless at
least 30 days before the taking of such action, the Owner Trustee shall have
notified the Owners and the Insurer in writing of the proposed action and
neither the Owners nor the Insurer shall have notified the Owner Trustee in
writing prior to the thirtieth day after receipt of such notice that the Owners
or the Insurer have withheld consent or provided alternative direction (any
direction by the Depositor shall require the written consent of the Insurer):
(a) the initiation of any claim or lawsuit by the Trust (except
claims or lawsuits brought in connection with the collection of the Contracts)
and the compromise of any action, claim or lawsuit brought by or against the
Trust (except with respect to the aforementioned claims or lawsuits for
collection of the Contracts);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Business Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture or
any other change to this Agreement or any other Basic Document in circumstances
where the consent of any Noteholder or the Insurer is required;
(d) the amendment of the Indenture by a supplemental indenture or
any other change to this Agreement or any other Basic Document in circumstances
where the consent of any Noteholder or the Insurer is not required and such
amendment materially adversely affects the interest of the Owners;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any provision
in a manner or add any provision that would not materially adversely affect the
interests of the Owners;
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, paying agent for the Notes or Indenture Trustee, or the consent to
the assignment by the Note Registrar, Paying Agent for the Notes or the
Indenture Trustee of its obligations under the Indenture;
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(g) the consent to the calling or waiver of any default of any Basic
Document;
(h) the consent to the assignment by the Indenture Trustee or
Servicer of their respective obligations under any Basic Document, unless
permitted in the Basic Documents;
(i) cause the Trust to incur, assume or guaranty any indebtedness
other than as set forth in this Agreement or the Basic Documents;
(j) possess Trust assets, or assign the Trust's right to property,
for other than an Trust purpose;
(k) cause the Trust to lend any funds to any entity, unless
permitted in this Agreement or the Basic Documents;
(l) except as provided in Article IX hereof, dissolve, terminate or
liquidate the Trust in whole or in part;
(m) merge or consolidate the Trust with or into any other entity, or
convey or transfer all or substantially all of the Trust's assets to any other
entity;
(n) do any act that conflicts with any other Basic Document;
(o) do any act which would make it impossible to carry on the
ordinary business of the Trust as described in Section 2.03 hereof;
(p) confess a judgment against the Trust; or
(q) change the Trust's purpose and powers from those set forth in
this Agreement.
In addition, the Trust shall not commingle its assets with those of
any other entity. The Trust shall maintain its financial and accounting books
and records separately from those of any other entity. Except as expressly set
forth herein, the Trust shall not pay any indebtedness, operating expenses or
liabilities of any other entity. The Trust shall maintain appropriate minutes or
other records of all appropriate actions and shall maintain its offices separate
from the offices of the Depositor and the Servicer.
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SECTION 4.02. Action by the Depositor with Respect to Certain
Matters. Subject to the provisions and limitations of Section 4.04, the Owner
Trustee shall not have the power, except upon the direction of the Depositor and
with the prior written consent of the Insurer (so long as no Insurer Default
shall have occurred and be continuing), to (a) remove the Administrator pursuant
to Section 8 of the Administration Agreement, (b) appoint a successor
Administrator pursuant to Section 8 of the Administration Agreement, (c) remove
or replace the Servicer pursuant to Section 7.01 of the Sale and Servicing
Agreement or the Indenture Trustee pursuant to the Indenture, (d) except as
expressly provided in the Basic Documents, sell the Contracts after the
termination of the Indenture, (e) initiate any claim, suit or proceeding by the
Trust or compromise any claim, suit or proceeding brought by or against the
Trust, (f) authorize the merger or consolidation of the Trust with or into any
other business trust or entity (other than in accordance with Section 3.10 of
the Indenture) or (g) amend the Certificate of Trust. The Owner Trustee may only
take the actions referred to in the preceding sentence upon written instructions
signed by the Owners and, so long as no Insurer Default shall have occurred and
is continuing, with the prior written consent of the Insurer.
SECTION 4.03. Action by the Owners with Respect to Bankruptcy.
(a) The Trust shall not, without the prior written consent of the
Owner Trustee, (i) institute any proceedings to adjudicate the Trust as bankrupt
or insolvent, (ii) consent to the institution of bankruptcy or insolvency
proceedings against the Trust, (iii) file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy with respect to the Trust, (iv) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of its property, (v) make any
assignment for the benefit of the Trust's creditors; (vi) cause the Trust to
admit in writing its inability to pay its debts generally as they become due; or
(vii) take any action in furtherance of any of the foregoing (any of the above
foregoing actions, a "Bankruptcy Action"). In considering whether to give or
withhold written consent to the Bankruptcy Action by the Trust, the Owner
Trustee, with the consent of the Owners (hereby given, which consent the Owners
believe to be in the best interests of Owners and the Trust), shall consider the
interests of the Noteholders and the Insurer in addition to the interests of the
Trust and whether the Trust is insolvent. The Owner Trustee shall have no duty
to give such written consent to Bankruptcy Action by the Trust if the Owner
Trustee shall not have been furnished (at the expense of the Person that
requested that such letter be furnished to the Owner Trustee) a letter from an
independent accounting firm of national reputation stating that in the opinion
of such firm the Trust is then insolvent. The Owner Trustee shall
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not be personally liable to any Owner on account of the Owner Trustee's good
faith reliance on the provisions of this Section and no Owner shall have any
claim for breach of fiduciary duty or otherwise against the Owner Trustee for
withholding its consent to any such Bankruptcy Action.
(b) The parties hereto stipulate and agree that no Owner has power
to commence any Bankruptcy Action on the part of the Trust or to direct the
Owner Trustee to take any Bankruptcy Action on the part of the Trust. To the
extent permitted by applicable law, the consent of the Controlling Party and the
Indenture Trustee shall be obtained prior to taking any Bankruptcy Action by the
Trust.
(c) The provisions of this Section do not constitute an
acknowledgment or admission by the Trust, the Owner Trustee, any Owner or any
creditor of the Trust that the Trust is eligible to be a debtor under the United
States Bankruptcy Code, 11 U.S.C. ss.ss. 101 et seq., as amended.
SECTION 4.04. Restrictions on Power. The Owner Trustee shall not be
required to take or to refrain from taking any action if such action or inaction
would be contrary to any obligation of the Trust, or of the Owner Trustee under
this Agreement or any of the other Basic Documents or would be contrary to the
purpose of this Trust as set forth in Section 2.03, nor shall the Owner Trustee
be obligated to follow any such direction, if given.
SECTION 4.05. Majority Control. Except as expressly provided herein,
any action that may be taken by the Owners under this Agreement may be taken by
the Holders of Residual Interest Certificates aggregating more than 50% of the
Residual Interest Certificates by Percentage Interest. Except as expressly
provided herein, any written notice of the Owners delivered pursuant to this
Agreement shall be effective if signed by Holders of Residual Interest
Certificates aggregating more than 50% by the Percentage Interest.
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ARTICLE V
APPLICATION OF TRUST FUNDS: CERTAIN DUTIES
SECTION 5.01. [RESERVED]
SECTION 5.02. Application of Trust Funds.
(a) On each Distribution Date, the Owner Trustee shall direct the
Paying Agent to distribute to the Holders distributions as provided in Section
4.03(b) of the Sale and Servicing Agreement with respect to such Distribution
Date.
(b) On each Distribution Date, the Owner Trustee, shall cause the
Paying Agent to send to each Residual Interest Certificateholder the statement
or statements provided to the Owner Trustee by the Servicer pursuant to Section
4.05 of the Sale and Servicing Agreement with respect to such Distribution Date.
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to an Owner, such tax shall reduce the amount
otherwise distributable to such Owner in accordance with this Section 5.02. The
Owner Trustee is hereby authorized and directed to retain from amounts otherwise
distributable to the Owners sufficient funds for the payment of any tax that is
legally owed by the Trust (but such authorization shall not prevent the Owner
Trustee from contesting any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The amount of any withholding tax imposed with respect to an Owner
shall be treated as cash distributed to such Owner at the time it is withheld by
the Trust for remittance to the appropriate taxing authority.
SECTION 5.03. Method of Payment. Subject to Section 9.01 (c)
respecting the final payment upon retirement of the Residual Interest
Certificate, distributions required to be made to each Owner of record on the
related Record Date shall be made by wire transfer or check mailed to such
Owner.
SECTION 5.04. No Segregation of Monies; No Interest. Subject to
Section 5.02, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law or the Sale and
Servicing Agreement and may be deposited under such general conditions as may be
prescribed by law, and the Owner Trustee shall not be liable for any interest
thereon.
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SECTION 5.05. Accounting and Reports to the Noteholders, Owners, the
Internal Revenue Service and Others. Unless otherwise required under the Code,
the Owner Trustee shall (a) maintain (or cause to be maintained) the books of
the Trust on a calendar year basis and the accrual method of accounting, (b)
deliver to each Owner, as may be required by the Code and applicable Treasury
Regulations, such information as may be required (including, if applicable,
Schedule K-1) to enable each Owner to prepare its federal and state income tax
returns, (c) file such tax returns, if any, relating to the Trust (including, if
applicable, a partnership information return, IRS Form 1065) and make such
elections as from time to time may be requested by the Depositor (so long as
such request is not detrimental to the Noteholders or the Insurer) under any
applicable state or federal statute or any rule or regulation thereunder so as
to maintain the Trust's characterization solely for income and franchise tax
purposes, as a disregarded entity, (d) cause such tax returns to be signed in
the manner required by law and (e) collect or cause to be collected and paid
over to the applicable authorities any withholding tax as described in and in
accordance with Section 5.02(c) with respect to income or distributions to
Owners.
SECTION 5.06. Signature on Returns; Tax Matters Partner.
(a) The Owner Trustee shall sign on behalf of the Trust the tax
returns of the Trust, unless applicable law requires the Depositor or other
Owner, as holder of the Residual Interest Certificate to sign such documents, in
which case such documents shall be signed by the Depositor.
(b) At such time as the Trust is treated as a partnership solely for
income and franchise tax purposes, the Depositor shall be designated the "tax
matters partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code and
applicable Treasury Regulations.
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ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01. General Authority. Subject to the provisions and
limitations of Sections 2.03 and 2.06, the Owner Trustee is authorized and
directed to execute and deliver on behalf of the Trust the Basic Documents to
which the Trust is to be a party and each certificate or other document attached
as an exhibit to or contemplated by the Basic Documents to which the Trust is to
be a party and any amendment thereto or other agreement, as evidenced
conclusively by the Owner Trustee's execution thereof. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, to take
all actions required of the Trust pursuant to the Basic Documents. The Owner
Trustee is further authorized from time to time to take such action as the
Administrator directs in writing with respect to the Basic Documents.
SECTION 6.02. General Duties. Subject to the provisions and
limitations of Sections 2.03 and 2.06:
(a) it shall be the duty of the Owner Trustee to discharge (or cause
to be discharged through the Administrator or such agents as shall be appointed
with the consent of the Insurer) all of its responsibilities pursuant to the
terms of this Agreement and the other Basic Documents to which the Trust is a
party and to administer the Trust in the interest of the Owners, subject to the
Basic Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the other Basic
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee or
the Trust hereunder or under any Basic Document, and the Owner Trustee shall not
be held liable for the default or failure of the Administrator to carry out its
obligations under the Administration Agreement.
(b) it shall be the duty of the Owner Trustee to execute documents
provided to it to qualify and preserve the Trust's qualification to do business
in each jurisdiction, if any, in which such qualification is or shall be
necessary to protect the validity and enforceability of the Indenture, the
Notes, the Contracts and any other instrument and agreement included in the
Trust Estate; provided, that the Owner Trustee may rely on advice of counsel
with respect to such obligation.
SECTION 6.03. Action Upon Instruction.
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(a) The Owner Trustee shall not be required to take any action
hereunder or under any other Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is contrary
to the terms hereof or of any other Basic Document or is otherwise contrary to
law.
(b) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or under any other Basic Document, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Depositor and the Insurer requesting instruction as to the course of action
to be adopted, and to the extent the Owner Trustee acts in good faith in
accordance with any written instruction of the Depositor received and consented
to by the Insurer, the Owner Trustee shall not be liable on account of such
action to any Person. If the Owner Trustee shall not have received appropriate
instruction within ten days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Agreement and the other Basic
Documents, as it shall deem to be in the best interest of the Depositor, and
shall have no liability to any Person for such action or inaction.
(c) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any other Basic Document or
any such provision is ambiguous as to its application, or is, or appears to be,
in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Depositor
requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within ten days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Agreement or the other Basic
Documents, as it shall deem to be in the best interests of the Depositor, and
shall have no liability to any Person for such action or inaction.
SECTION 6.04. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or
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obligation to manage, make any payment with respect to, register, record, sell,
dispose of or otherwise deal with the Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Owner Trustee is a party, except as expressly
provided by the terms of this Agreement or in any document or written
instruction received by the Owner Trustee pursuant to Section 6.03; and no
implied duties or obligations shall be read into this Agreement or any other
Basic Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to prepare or file any
Commission filing for the Trust or to record this Agreement or any other Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any liens
on any part of the Trust Estate that result from actions by, or claims against,
the Owner Trustee that are not related to the ownership or the administration of
the Trust Estate or the Grant of any portion thereof to the Indenture Trustee
pursuant to the Indenture.
SECTION 6.05. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Trust Estate except in accordance with
(i) the powers granted to and the authority conferred upon the Owner Trustee
pursuant to this Agreement, (ii) the other Basic Documents and (iii) any
document or instruction delivered to the Owner Trustee pursuant to Section 6.03.
SECTION 6.06. Restrictions. The Owner Trustee shall not take any
action (i) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (ii) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for federal or state
income tax purposes. The Depositor shall not direct the Owner Trustee to take
action that would violate the provisions of this Section 6.06.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement and the
other Basic Documents. The Owner Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Owner
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Trustee and, in the absence of bad faith on the part of the Owner Trustee, the
Owner Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates, opinions
or documents (whether in their original or facsimile form) furnished to the
Owner Trustee and conforming to the requirements of this Agreement. The Owner
Trustee agrees to disburse all monies actually received by it constituting part
of the Trust Estate upon the terms of this Agreement and the other Basic
Documents. The Owner Trustee shall not be answerable or accountable hereunder or
under any other Basic Document under any circumstances, except (i) for its own
willful misconduct or negligence; (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 7.03 expressly made by the Owner
Trustee and (iii) for its failure to use ordinary care in the handling of funds.
In particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
made by a Responsible Officer of the Owner Trustee unless negligent in
ascertaining pertinent facts;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with this
Agreement;
(c) no provision of this Agreement or any other Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any other Basic Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
reasonably satisfactory to it against such risk or liability is not reasonably
assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution hereof by
the Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Trust Estate, or for or in respect of the validity or
sufficiency of the Basic Documents, other than the certificate of authentication
on the Residual Interest Certificate, and the Owner Trustee shall not assume or
incur any liability, duty or obligation to any Noteholder or to any Owner, other
than as expressly provided for herein or expressly agreed to by the Owner
Trustee in the other Basic Documents;
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(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Depositor, the Insurer, the Indenture
Trustee or the Servicer under any of the Basic Documents or otherwise and the
Owner Trustee shall have no obligation or liability to perform the obligations
of the Trust under this Agreement or the other Basic Documents that are required
to be performed by the Administrator under the Administration Agreement, the
Indenture Trustee under the Indenture or the Servicer or the Depositor under the
Sale and Servicing Agreement;
(g) the Owner Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation under this Agreement or otherwise or in relation to
this Agreement or any other Basic Document, at the request, order or direction
of the Owners, unless such Owners have offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities that
may be incurred by the Owner Trustee, therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Agreement or in any
other Basic Document shall not be construed as a duty, and the Owner Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of any such act;
(h) the Owner Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default, any Event of Default or
Servicer Default under any of the Basic Documents unless a Responsible Officer
of the Owner Trustee shall have received written notice thereof or shall have
knowledge thereof. In the absence of knowledge or receipt of such notice, the
Owner Trustee may conclusively assume that there is no default, Event of Default
or Servicer Default;
(i) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the
Administrator or Depositor; provided that if the payment within a reasonable
time to the Owner Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the
Owner Trustee not reasonably assured to it by the security afforded to them by
the terms of this Agreement, the Owner Trustee may require reasonable indemnity
reasonably satisfactory to it against such cost, expense or liability as a
condition to taking any such action; and
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(j) the Owner Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust created hereby or the powers
granted hereunder.
SECTION 7.02. Furnishing of Documents. The Owner Trustee shall
furnish to the Owners, promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.03. Representations and Warranties.
(a) The Owner Trustee hereby represents and warrants to the
Depositor, the Owners and the Insurer:
(i) It is a banking corporation duly organized and validly existing
in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement.
(ii) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(iii) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Delaware law, governmental rule or
regulation governing the banking or trust powers of the Owner Trustee or
any judgment or order binding on it, or constitute any default under its
charter documents or bylaws or to the best of its knowledge without
independent investigation, any indenture, mortgage, contract, agreement
or instrument to which it is a party or by which any of its properties may
be bound or result in the creation or imposition of any lien, charge or
encumbrance on the Trust Estate resulting from actions by or claims
against the Owner Trustee individually which are unrelated to this
Agreement or the other Basic Documents.
(iv) it has the power and authority to execute and deliver this
Agreement and the other Basic Documents to which it is a party and to
carry out their respective terms; and the execution, delivery, and
performance of
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this Agreement and the other Basic Documents to which it is a party have
been duly authorized by all necessary corporate action.
(v) This Agreement and the other Basic Documents to which it is a
party constitute the legal, valid, and binding obligations of the Owner
Trustee enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity,
regardless of whether such enforceability shall be considered in a
proceeding in equity or at law.
SECTION 7.04. Reliance; Advice of Counsel.
(a) The Owner Trustee shall not incur liability to anyone in acting
upon any signature, instrument notice, resolution, request, consent order,
certificate, report, opinion, bond or other document or paper (whether in its
original or facsimile form) believed by it to be genuine and believed by it to
be signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing body
of any corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof conclusively
rely on a certificate, signed by the president or any vice president or by the
treasurer or other authorized officers of the relevant party, as to such fact or
matter and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the other
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it at
the sole expense of the Owners solely from funds payable to the Owners pursuant
to clause (xiii) of Section 4.03(a) of the Sale and Servicing Agreement. The
Owner Trustee shall not be liable for anything done, suffered or omitted in good
faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and not contrary to this Agreement or
any other Basic Document.
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SECTION 7.05. Not Acting in Individual Capacity. Except as otherwise
provided in this Article VII, in accepting the trusts hereby created, The Bank
of New York (Delaware) acts solely as Owner Trustee hereunder and not in its
individual capacity, and all Persons having any claim against the Trust by
reason of the transactions contemplated by this Agreement or any other Basic
Document shall look only to the Trust Estate for payment or satisfaction
thereof.
SECTION 7.06. Owner Trustee Not Liable for Residual Interest
Certificate, Notes or Contracts. The recitals contained herein and in the Notes
(other than the signatures of the Owner Trustee and the statements made by the
Owner Trustee in Section 7.03) shall be taken as the statements of the
Depositor, and the Owner Trustee assumes no responsibility for the correctness
thereof. Except as set forth in Section 7.03, the Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement or any other
Basic Document (other than the signatures of the Owner Trustee) or the Notes, or
of any Contract or related documents. The Owner Trustee shall at no time have
any responsibility or liability for or with respect to the legality, validity
and enforceability of any Contract, or the perfection and priority of any
security interest created by any Contract in any Financed Vehicle or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to the Noteholders under the Indenture, including, without
limitation: the existence, condition and ownership of any Financed Vehicle; the
existence and enforceability of any insurance thereon; the existence and
contents of any Contract on any computer or other record thereof; the validity
of the assignment of any Contract to the Trust or of any intervening assignment;
the completeness of any Contract; the performance or enforcement of any
Contract; the compliance by the Depositor, the Insurer or the Servicer with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation; or any action
of the Administrator, the Indenture Trustee or the Servicer or any subservicer
taken in the name of the Owner Trustee.
SECTION 7.07. Owner Trustee May Own Residual Interest Certificates
and Notes. The Owner Trustee in its individual or any other capacity may become
the owner or pledgee of the Residual Interest Certificates or Notes and may deal
with the Depositor, any Owner, the Insurer, the Administrator, the Indenture
Trustee and the Servicer in banking transactions with the same rights as it
would have if it were not Owner Trustee.
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ARTICLE VIII
COMPENSATION AND INDEMNIFICATION OF OWNER TRUSTEE
SECTION 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Administrator and the
Owner Trustee and the Owner Trustee shall be entitled to be reimbursed by the
Administrator for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder.
SECTION 8.02. Indemnification. The Depositor shall be liable as
primary obligor for, and shall fully indemnify the Owner Trustee and its
respective officers, directors, employees, successors, assigns, agents and
servants (collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by or asserted against
the Owner Trustee or any Indemnified Party in any way relating to or arising out
of this Agreement, the other Basic Documents, the Trust Estate, the
administration of the Trust Estate or the action or inaction of the Owner
Trustee hereunder, except only that the Depositor shall not be liable for or
required to indemnify an Indemnified Party from and against Expenses arising or
resulting from any of the matters described in the fourth sentence of Section
7.01; provided, however, any amount payable by the Depositor under this Section
8.02 shall be paid solely from amounts payable to Owners pursuant to clause
(xiii) of Section 4.03(a) of the Sale and Servicing Agreement. The Depositor
will in no event be entitled to make any claim upon the Trust Property for the
payment or reimbursement of any Expenses. The indemnities contained in this
Section 8.02 shall survive the resignation or termination of the Owner Trustee
and the termination of this Agreement. In the event of any claim, action or
proceeding for which indemnity will be sought pursuant to this Section 8.02, the
choice of legal counsel by the Owner Trustee shall be subject to the approval of
the Depositor, which approval shall not be unreasonably withheld.
SECTION 8.03. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Trust Estate immediately after such payment.
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ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.01. Termination of Trust Agreement.
(a) The Trust shall dissolve and be wound up in accordance with
Section 3808 of the Act and shall terminate upon the earlier of 91 days after
the (i) final distribution by the Owner Trustee of all monies or other property
or proceeds of the Trust Estate in accordance with the terms of the Indenture,
the Sale and Servicing Agreement and Article V hereof, (ii) the expiration of 21
years from the death of the survivor of the descendants of George Herbert Walker
Bush, former President of the United States of America, living on the date
hereof and (iii) the Distribution Date next succeeding the month which is one
year after the maturity or other liquidation of the last Contract and the
disposition of any amount received upon liquidation of any property remaining in
the Trust Estate. The bankruptcy, liquidation, dissolution, death or incapacity
of any Owner (other than the Depositor) shall not (i) operate to terminate this
Agreement or the Trust, (ii) entitle such's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Trust Estate or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), neither the Depositor nor
the Insurer shall be entitled to dissolve, revoke or terminate the Trust.
(c) Notice of any dissolution of the Trust, specifying the
Distribution Date upon which Residual Interest Certificateholders shall
surrender their Residual Interest Certificates to the Paying Agent for payment
of the final distribution and cancellation, shall be given by the Owner Trustee
by letter to Residual Interest Certificateholders mailed within five Business
Days of receipt of notice of such termination from the Servicer given pursuant
to Section 8.01(b) of the Sale and Servicing Agreement, stating (i) the
Distribution Date upon or with respect to which final payment of the Residual
Interest Certificates shall be made upon presentation and surrender of the
Residual Interest Certificates at the office of the Paying Agent in the City of
New York therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Residual Interest Certificates at the office of the Paying Agent therein
specified. The Owner Trustee shall give such notice to the Residual Interest
Certificate Registrar (if other than the Owner Trustee) and the Paying Agent (if
other than the Owner Trustee) at the time such notice is given to Residual
Interest
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Certificateholders. Upon presentation and surrender of the Residual Interest
Certificates, the Paying Agent shall cause to be distributed to Residual
Interest Certificateholders amounts distributable on such Distribution Date
pursuant to Section 5.02. In addition, the Owner Trustee shall notify the Rating
Agencies upon the final payment of the Residual Interest Certificates.
(d) Upon completion of the winding up of the Trust and after paying
or making reasonable provisions for the payment of all Indebtedness of the
Trust, the Owner Trustee shall, upon receipt of a written request from a
majority of the Owners, cause the Certificate of Trust to be canceled by filing
a certificate of cancellation with the Secretary of State in accordance with the
provisions of the Business Trust Statute and the Trust shall terminate. Upon
termination of the Trust, this Agreement (except for Articles V and VIII) shall
terminate.
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ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEE
SECTION 10.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute; authorized to exercise corporate trust
powers; (iii) have a combined capital and surplus of at least $50,000,000 and
shall be subject to supervision or examination by federal or state authorities;
and (iv) have (or have a parent that has) a rating of at least Baa3 by Moody's
and BBB- by Standard & Poor's. If such corporation shall publish reports of
condition at least annually pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 10.01, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Owner Trustee shall
cease to be eligible in accordance with the provisions of this Section 10.01,
the Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.02.
SECTION 10.02. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Administrator and the Insurer. Upon
receiving such notice of resignation, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee; provided that the Depositor and the Insurer shall have
received written confirmation from each Rating Agency that the proposed
appointment will not result in an increased capital charge to the Insurer by
either Rating Agency. If no successor Owner Trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Insurer may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.
If, at any time, the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Administrator or the Insurer, or if at any time
the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt
or insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator or the Insurer may remove
the Owner Trustee. If the Owner Trustee shall be removed
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under the authority of the immediately preceding sentence, the Administrator
shall promptly appoint a successor Owner Trustee acceptable to the Insurer by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed and one copy to the successor
Owner Trustee, and shall pay all fees owed to the outgoing Owner Trustee. If no
successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee or the Insurer may petition, at the expense of the
Depositor, any court of competent jurisdiction for the appointment of a
successor Owner Trustee acceptable to the Insurer.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Administrator shall provide notice of such
resignation or removal of the Owner Trustee to the Depositor, the Indenture
Trustee, the Insurer, the Noteholders and to each Rating Agency.
SECTION 10.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Sections 10.01 or 10.02 shall execute, acknowledge and
deliver to the Administrator, the Insurer and to its predecessor Owner Trustee
an instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective,
and such successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall upon payment of its
reasonable fees and expenses (and the reasonable fees and expenses of its agents
and counsel) deliver to the successor Owner Trustee all documents and statements
and monies held by it under this Agreement; and the Administrator and the
predecessor Owner Trustee shall execute and deliver such instruments and do such
other things as may reason ably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties and
obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section 10.03 unless at the time of such acceptance such successor Owner
Trustee shall be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section 10.03, the Administrator shall mail notice thereof to the
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Insurer, the Depositor, the Servicer, the Indenture Trustee, the Noteholders and
each Rating Agency. If the Administrator shall fail to mail such notice within
10 days after acceptance of such appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Administrator.
Any successor Owner Trustee appointed pursuant to this Section 10.03
shall promptly file an amendment to the Certificate of Trust with the Secretary
of State identifying the name and principal place of business of such successor
Owner Trustee in the State of Delaware.
SECTION 10.04. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, without the execution or filing of any instrument or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that such corporation shall be eligible pursuant to
Section 10.01 and, provided, further, that (a) the Owner Trustee shall mail
notice of such merger or consolidation to each Rating Agency and the Insurer and
(b) the Owner Trustee shall file any necessary amendments to the Certificate of
Trust with the Delaware Secretary of State.
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Estate or any Financed Vehicle may at the time be located, the
Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Administrator, the Insurer and Owner Trustee to act as
co-trustee, jointly with the Owner Trustee, or as separate trustee or separate
trustees, of all or any part of the Trust Estate, and to vest in such Person, in
such capacity, such title to the Trust or any part thereof and, subject to the
other provisions of this Section, such powers, duties, obligations, rights and
trusts as the Administrator, the Insurer and the Owner Trustee may consider
necessary or desirable. If the Administrator shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Owner Trustee and the Insurer shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor Owner Trustee, provided that such
co-trustee or successor trustee must be acceptable to the Rating Agencies and no
notice of the
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appointment of any co-trustee or separate trustee shall be required pursuant to
Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Estate or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Owner
Trustee;
(b) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(c) the Administrator, the Insurer and the Owner Trustee acting
jointly may at any time accept the resignation of or remove any separate trustee
or co-trustee.
Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Administrator and the Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapa-
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ble of acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Owner Trustee, to the
extent permitted by law, without the appointment of a new or successor
co-trustee or separate trustee.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Supplements and Amendments.
(a) This Agreement may be amended by the Depositor and the Owner
Trustee with the prior written consent of the Insurer so long as the Notes are
out standing or any amounts due to the Insurer under the Insurance Agreement or
the other Basic Documents remains unpaid or a claim could be made under the
Insurance Policy, but without the consent of any of the Noteholders or any
Owner, to cure any ambiguity, to correct or supplement any provisions herein
which may be inconsistent with any of the provisions herein or make any other
provisions with respect to matters or questions arising hereunder; provided that
(i) as evidenced by an Officer's Certificate of the Depositor addressed and
delivered to the Owner Trustee any such action shall not materially and
adversely affect the interests of any Noteholder or any Owner (unless the prior
written consent of each Noteholder and the Depositor affected thereby is
obtained) and (ii) any such action shall be deemed not to materially and
adversely affect the interest of any Noteholder or any Owner if the Person
requesting the amendment obtains (A) a letter from each Rating Agency to the
effect that the amendment would not result in a downgrading or withdrawal of the
ratings then assigned to the Notes by such Rating Agency (without regard to the
Insurance Policy) and (B) an Opinion of Counsel satisfactory to the Owner
Trustee, the Insurer and the Indenture Trustee to such effect; provided,
further, that so long as the Depositor is domiciled in the State of Florida, the
vote of the Depositor shall not be required for any amendment to Articles IX and
XI of this Agreement.
(b) Subject to Section 11.14, this Agreement may also be amended
from time to time with the prior written consent of the Insurer by the Depositor
and the Owner Trustee, with prior written notice to the Rating Agencies, with
the consent of for so long as the Notes are Outstanding, Noteholders
representing not less than 51% of the Outstanding Principal Amount acting
together as a single class, and (ii) if no Notes are Outstanding, the Holders of
the Residual Interest Certificates aggregating more than 50% of the Residual
Interest Certificates by Percentage Interest (which consent of any Holder of a
Note or Residual Interest Certificate given pursuant to this Section 11.01 or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder and on all future Holders of such Note, as the case may
be, issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made thereon) provided that no such
amendment may (i) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, collections of payments on
36
<PAGE>
Contracts or distributions that shall be required to be made for the benefit of
the Noteholders, the Depositor or the Insurer, (ii) reduce the aforesaid
percentage of the Outstanding Principal Amount of the Notes required to consent
to any such amendment, without the consent of the Holders of all outstanding
Notes affected thereby or (iii) result in a taxable event to the holder of the
Residual Interest Certificate for federal income tax purposes or result in the
trust being taxable as a corporation for federal income tax purposes.
(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, together with a copy thereof, to the Indenture Trustee,
the Insurer, the Administrator and 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 Owner. It shall not be necessary for the consent of
the Holders of the Notes, the Owners or the Indenture Trustee pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.
(e) Promptly after the execution of any amendment to the Certificate
of Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
(f) In connection with the execution of any amendment to this
Agreement or any other Basic Document to which the Issuer is a party and for
which amendment the Owner Trustee's consent is sought, the Owner Trustee shall
be entitled to receive and conclusively rely upon an Opinion of Counsel to the
effect that such amendment is authorized or permitted by the Basic Documents and
that all conditions precedent in the Basic Documents for the execution and
delivery thereof by the Issuer or the Owner Trustee as the case may be, have
been satisfied. The Owner Trustee may, but shall not be obligated to, enter into
any such amendment that affects the Owner Trustee's own rights, duties or
immunities under this Agreement or otherwise.
SECTION 11.02. No Legal Title to Trust Estate in Owner. The Owner
shall not have legal title to any part of the Trust Estate. No transfer, by
operation of law or otherwise, of any right, title, and interest of the Owner to
and in its ownership interest in the Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Trust
Estate.
37
<PAGE>
SECTION 11.03. Limitations on Rights of Others. Except for Section
2.07, the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Insurer, the Owners, the Administrator and, to the
extent expressly provided herein, the Indenture Trustee and the Noteholders, and
nothing in this Agreement (other than Section 2.07), whether express or implied,
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Trust Estate or under or in respect of this Agreement or
any covenants, conditions or provisions contained herein.
SECTION 11.04. Notices. All demands, notices and communications
under this Agreement shall be in writing personally delivered, sent by facsimile
or mailed by certified mail, return receipt requested, and shall be deemed to
have been duly given upon receipt in the case of (a) the Owner Trustee, at the
Owner Trustee Corporate Trust Office; (b) the Depositor, at AutoNation
Receivables Corporation, 110 S.E. 6th Street, Fort Lauderdale, Florida 33301;
(c) the Insurer, at MBIA Insurance Corporation, 113 King Street, Armonk, New
York 10504; or (d) as to each party, at such other address as shall be
designated by such party in a written notice to each other party. Any notice
required or permitted to be mailed to an Owner shall be given by first-class
mail, postage prepaid, at the address of such Owner as shown in the Residual
Interest Certificate Register. Any notice so mailed within the time prescribed
in this Agreement shall be conclusively presumed to have been duly given,
whether or not the Owner receives such notice.
SECTION 11.05. 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 Residual
Interest Certificate.
SECTION 11.06. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which
together shall constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of the
Depositor, the Insurer, the Owner Trustee, and their respective successors and
permitted assigns and the Depositor and its successors and permitted assigns,
all as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a Depositor shall bind the successors and assigns of the
Depositor.
38
<PAGE>
SECTION 11.08. No Petition.
(a) The Depositor will not at any time institute against the Trust
any bankruptcy proceedings under any United States federal or state bankruptcy
or similar law.
(b) The Owner Trustee, by entering into this Agreement, each Owner
by accepting the Residual Interest Certificate, and the Indenture Trustee and
each Noteholder, by accepting the benefits of this Agreement, hereby covenant
and agree that they will not at any time institute against the Seller or the
Trust, or join in any institution against the Seller or the Trust of, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law.
SECTION 11.09. No Recourse. The Depositor by accepting the Residual
Interest Certificate acknowledges that the Residual Interest Certificate does
not represent an interest in or obligation of the Servicer, the Seller, the
Administrator, the Owner Trustee, the Indenture Trustee or any of their
respective Affiliates and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this Agreement
or the other Basic Documents.
SECTION 11.10. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.11. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, without
reference to its conflict of law provisions.
SECTION 11.12. Depositor Payment Obligation. The Depositor shall be
responsible for payment of the Administrator's compensation pursuant to Section
3 of the Administration Agreement and shall reimburse the Administrator for all
expenses and liabilities of the Administrator incurred thereunder; provided,
however, that such amounts shall not be payable from the Trust Estate or the
Trust Property, except for amounts payable to the Depositor pursuant to Section
4.03(a) of the Sale and Servicing Agreement.
SECTION 11.13. Certain Matters Regarding the Insurer. So long as an
Insurer Default shall not have occurred and be continuing, the Insurer shall
have the right to exercise all rights, including voting rights, which the
Noteholders are entitled to exercise pursuant to this Agreement, without any
consent of such
39
<PAGE>
Noteholders; provided that without the consent of each Noteholder affected
thereby, the Insurer shall not exercise such rights to amend this Agreement in
any manner that would (i) reduce the amount of, or delay the timing of,
collections of payments on the Contracts or distributions which are required to
be made on any Note, (ii) adversely affect in any material respect the interests
of the Holders of any Notes, or (iii) alter the rights of any such Holder to
consent to such amendment.
Notwithstanding any provision in this Agreement to the contrary, in
the event an Insurer Default shall have occurred and be continuing, the Insurer
shall not have the right to take any action under this Agreement or to control
or direct the actions of the Trust, the Depositor or the Owner Trustee pursuant
to the terms of this Agreement, nor shall the consent of the Insurer be required
with respect to any action (or waiver of a right to take action) to be taken by
the Trust, the Depositor, the Owner Trustee or the Holders of the Notes;
provided, that the consent of the Insurer shall be required at all times during
which (i) the Notes are Outstanding or any amounts owed to the Insurer under the
Insurance Agreement or any of the Basic Documents remains unpaid or a claim
could be made under the Insurance Policy.
SECTION 11.14. Fiduciary Duties. The duties and responsibilities of
the Owner Trustee shall be limited to those expressly provided for in this
Agreement. The parties hereto agree that except for the purpose of the foregoing
sentence, the Owner Trustee shall not have management responsibilities or owe
any fiduciary duties to the Insurer.
SECTION 11.15. Third Party Beneficiary. The parties hereto intend
for the Insurer to be, and the Insurer hereby is, an express third party
beneficiary of this Agreement, entitled to enforce all provisions hereof to the
same extent as if it were a party to this Agreement.
40
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Owner Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
AUTONATION RECEIVABLES
CORPORATION, as Depositor
By: /s/ Kathleen W. Hyle
------------------------------------
Name: Kathleen W. Hyle
Title: President
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity, but solely as
Owner Trustee
By: /s/ Reyne A. Macadaeg
------------------------------------
Name: Reyne A. Macadaeg
Title: Assistant Vice President
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST OF
ANRC AUTO OWNER TRUST________
This Certificate of Trust of ANRC Auto Owner Trust _____(the
"Trust") is being duly executed and filed by the undersigned, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. Code,
Section 3 801 et seq. (the "Act")).
1. Name. The name of the business trust formed hereby is ANRC Auto
Owner Trust _____.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is _______________, Attention:Corporate Trust
Administration.
3. Effective Date. This Certificate of Trust shall be effective ____
___________, _____,
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate of Trust in accordance with Section 3811(a)(1) of the Act.
__________________________________________
not in its individual capacity, but solely
as Owner Trustee
By:__________________________________________
Name:
Title:
A-1
<PAGE>
EXHIBIT B
FORM OF RESIDUAL INTEREST CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES TO
THE EXTENT DESCRIBED IN THE SALE AND SERVICING AGREEMENT REFERRED TO HEREIN.
EACH HOLDER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST THEREIN
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT SUCH PERSON (1) IS NOT A
PERSON WHICH IS AN EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR
SECTION 4975 OF THE CODE OR A GOVERNMENTAL PLAN, DEFINED IN SECTION 3(32) OF
ERISA SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (ANY SUCH PERSON BEING
A "PLAN") AND (II) IS NOT AN ENTITY, INCLUDING AN INSURANCE COMPANY SEPARATE
ACCOUNT OR GENERAL ACCOUNT, WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY
REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
AUTONATION RECEIVABLES CORPORATION, AUTONATION FINANCIAL SERVICES CORP. OR ANY
OF THEIR RESPECTIVE AFFILIATES (PROVIDED THAT THIS CERTIFICATE DOES REPRESENT AN
INTEREST IN THE TRUST, AS DEFINED BE LOW), AND IS NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION.
B-1
<PAGE>
ANRC AUTO OWNER TRUST 1999-A
RESIDUAL INTEREST CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes, among other things, a pool of retail installment
sale contracts secured by new and used automobiles and light duty trucks sold to
the Trust by AutoNation Receivables Corporation.
NUMBER C-1 100% Interest
THIS CERTIFIES THAT _________ is the registered owner of a 100%
nonassessable, fully-paid, fractional undivided residual interest in the ANRC
Auto Owner Trust 1999-A (the "Trust") formed by AutoNation Receivables
Corporation, a Delaware corporation (together with its permitted successors and
assigns in such capacity, the "Depositor").
The Trust was created pursuant to a Trust Agreement, dated as of
October 1, 1999 (as amended, supplemented or otherwise modified and in effect
from time to time, the "Owner Trust Agreement"), between AutoNation Receivables
Corporation (the "Depositor") and The Bank of New York (Delaware) as owner
trustee (together with its permitted successors and assigns in such capacity,
the "Owner Trustee"), a summary of certain of the pertinent provisions of which
is set forth below. Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in, or incorporated by reference into,
the Owner Trust Agreement.
This Residual Interest Certificate is the duly authorized
Certificate evidencing a beneficial interest in the Trust (the "Residual
Interest Certificate"). Also issued by the Trust under that certain Indenture,
dated as of October 1, 1999 (as amended, supplemented, amended and restated or
otherwise modified and in effect from time to time, the "Indenture"), between
the Trust and The Chase Manhattan Bank, as Indenture Trustee, are four classes
of Notes designated as "Class A-1 Notes", Class A-2 Notes", "Class A-3 Notes",
and "Class A-4 Notes" (collectively, the "Notes"). This Residual Interest
Certificate is issued under and is subject to the terms, provisions and
conditions of the Owner Trust Agreement, to which Owner Trust Agreement the
Owner by virtue of its acceptance hereof assents and by which such Owner is
bound. The property of the Trust includes, among other things, a pool
B-2
<PAGE>
of retail installment sale contracts (the "Contracts") for new and used
automobiles and light duty trucks (the "Financed Vehicles").
The holder of this Residual Interest Certificate acknowledges that
its rights to receive distributions in respect of this Residual Interest
Certificate are subordinated to the rights of the Noteholders to the extent
described in the Sale and Servicing Agreement and the Indenture.
Distributions will be made as provided in the Sale and Servicing
Agreement and only after the Notes have been paid in full.
It is the intention of the Servicer and the Depositor that, solely
for income and franchise tax purposes, so long as the Trust has only one holder
of the Residual Interest Certificate, the Trust will be disregarded as a
separate entity. At such time as the Trust has more than one holder of any
Certificate issued by the Trust (including holders of the Residual Interest
Certificate), the Trust will be treated as a partnership for income and
franchise tax purposes. Neither the Servicer or the Depositor will take any
action to the contrary.
The holder of the Residual Interest Certificate, by its acceptance
of this Residual Interest Certificate, covenants and agrees that it will not at
any time institute against the Trust or the Depositor, or join in any
institution against the Trust or the Depositor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.
Reference is hereby made to the further provisions of this Residual
Interest Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Residual Interest Certificate shall not entitle the holder hereof to any
benefit under the Owner Trust Agreement or any other Basic Document or be valid
for any purpose.
This Residual Interest Certificate shall be governed by, and
construed in accordance with, the laws of the State of Delaware without
reference to its conflict of laws provisions.
B-3
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Residual Interest Certificate to
be duly executed.
Dated: October 22, 1999 ANRC AUTO OWNER TRUST 1999-A
By: THE BANK OF NEW YORK (DELAWARE), not in its
not in its individual capacity but solely
as Owner Trustee
By:________________________________________
Authorized Signatory
B-4
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Residual Interest Certificate referred to in the
within-mentioned Owner Trust Agreement.
THE BANK OF NEW YORK (DELAWARE), not in
its individual capacity but solely as
Owner Trustee
By:______________________________________
Authorized Signatory
B-5
<PAGE>
[REVERSE OF CERTIFICATE]
The Residual Interest Certificate does not represent an obligation
of, or an interest in, the Seller, the Depositor, the Servicer, the Owner
Trustee or any of their respective Affiliates and no recourse may be had against
such parties or their assets, except as expressly set forth or contemplated
herein or in the Owner Trust Agreement or the other Basic Documents. In
addition, this Residual Interest Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections and recoveries with respect to the Contracts (and certain
other amounts), in each case as more specifically set forth herein and in the
Sale and Servicing Agreement. Copies of the Sale and Servicing Agreement and the
Owner Trust Agreement may be examined upon written request during normal
business hours at the principal office of the Depositor and at such other
places, if any, designated by the Depositor.
The Owner Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the parties thereto and the rights of the Owner under the Owner
Trust Agreement at any time by the parties thereto with the consent of the
Insurer and, for so long as the Notes are outstanding, Noteholders representing
not less than 51% of the Outstanding Principal Amount acting together as a
single class. The Owner Trust Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Notes.
The Residual Interest Certificate (or any interest therein) may not
be sold, transferred, assigned, participated, pledged or otherwise disposed of
by the Depositor or any other Owner to any Person unless (i) the transfer is
permitted under the applicable federal and state securities law and (ii) prior
to such transfer, (A) an Opinion of Counsel in form and content acceptable to
the Owner Trustee and to the Indenture Trustee is delivered to the Owner
Trustee, the Insurer and to the Indenture Trustee stating, among other things,
that such transfer shall not cause the Trust to be classified as an association
(or publicly traded partnership) taxable as a corporation for federal income tax
purposes and (B) and prior notice is given to each Rating Agency and (C) the
Insurer has provided its prior written consent.
The Owner Trustee, the Paying Agent and any of their respective
agents may treat the Person in whose name this Residual Interest Certificate is
registered as the owner hereof for all purposes, and none of the Owner Trustee,
the Paying Agent or any such agent shall be affected by any notice to the
contrary.
B-6
<PAGE>
The obligations and responsibilities created by the Owner Trust
Agreement and the Trust created thereby shall terminate upon the disposition of
all property held as part of the Trust Estate. The Servicer may at its option
purchase the Trust Property at a price specified in the Sale and Servicing
Agreement, and such purchase of the Contracts and other property of the Trust
will effect early retirement of the Notes; provided such right of purchase is
exercisable only as of any Distribution Date as of which the Pool Balance as of
such Distribution Date is less than or equal to 10% of the Original Pool
Balance.
B-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Residual Interest Certificate, and all rights thereunder, hereby
irrevocably constituting and
appointing _________________________________________________________________ to
transfer said Residual Interest Certificate with full power of substitution in
the premises.
Dated:_______________
Signature Guaranteed:
NOTICE: Signature(s) must be NOTICE: The signature to this assignment
guaranteed by an eligible guarantor must correspond with the name of the
institution. registered owner as it appears on the
face of the within Residual Interest
Certificate in every particular, without
alteration or enlargement or any change
whatever.
B-8
<PAGE>
- ------------------------------------------------------------------------------
INDENTURE
between
ANRC AUTO OWNER TRUST 1999-A,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
- ------------------------------------------------------------------------------
Dated as of October 1, 1999
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions..................................................2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act............9
SECTION 1.03. Rules of Construction.......................................10
ARTICLE II
THE NOTES
SECTION 2.01. Form........................................................12
SECTION 2.02. Execution, Authentication and Delivery......................12
SECTION 2.03. Temporary Notes.............................................13
SECTION 2.04. Registration; Registration of Transfer and Exchange.........13
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes..................15
SECTION 2.06. Persons Deemed Owner........................................16
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.......17
SECTION 2.08. Cancellation................................................18
SECTION 2.09. Book-Entry Notes............................................19
SECTION 2.10. Notices to Clearing Agency..................................20
SECTION 2.11. Definitive Notes............................................20
SECTION 2.12. Release of Collateral.......................................20
SECTION 2.13. Tax Treatment...............................................21
SECTION 2.14. ERISA.......................................................21
SECTION 2.15. CUSIP Numbers...............................................21
SECTION 2.16. Issuer's Obligations Absolute...............................21
SECTION 2.17. Authenticating Agent........................................21
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal and Interest...........................23
SECTION 3.02. Maintenance of Office or Agency.............................23
SECTION 3.03. Money for Payments to be Held in Trust......................23
SECTION 3.04. Existence...................................................25
SECTION 3.05. Protection of Collateral....................................25
SECTION 3.06. Opinions as to Collateral...................................26
SECTION 3.07. Performance of Obligations; Servicing of Contracts..........27
SECTION 3.08. Negative Covenants..........................................28
SECTION 3.09. Annual Statement as to Compliance...........................29
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Terms..........30
SECTION 3.11. Successor Transferee........................................32
i
<PAGE>
SECTION 3.12. No Other Business...........................................33
SECTION 3.13. Servicer's Obligations......................................33
SECTION 3.14. Restricted Payments.........................................33
SECTION 3.15. Notice of Events of Default.................................33
SECTION 3.16. Further Instruments and Acts................................34
SECTION 3.17. No Borrowing................................................34
SECTION 3.18. Compliance with Laws........................................34
SECTION 3.19. Amendments of Sale and Servicing Agreement and Owner
Trust Agreement ..........................................34
SECTION 3.20. Maintenance of Books and Records............................34
SECTION 3.21. Guarantees, Loans, Advances and Other Liabilities...........34
SECTION 3.22. Critical Expenditures.......................................35
SECTION 3.23. Removal of Administrator....................................35
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture.....................36
SECTION 4.02. Application of Trust Money..................................37
SECTION 4.03. Repayment of Monies Held by Paying Agent....................38
SECTION 4.04. Effect of Payments by the Insurer; Subrogation..............38
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
SECTION 5.01. Events of Default...........................................39
SECTION 5.02. Rights Upon Event of Default................................40
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee ........................................42
SECTION 5.04. Remedies....................................................44
SECTION 5.05. Optional Preservation of the Contracts......................46
SECTION 5.06. Priorities..................................................46
SECTION 5.07. Limitation of Suits.........................................48
SECTION 5.08. Unconditional Rights of Noteholders to Receive Principal
and Interest .............................................49
SECTION 5.09. Restoration of Rights and Remedies..........................49
SECTION 5.10. Rights and Remedies Cumulative..............................49
SECTION 5.11. Delay or Omission Not a Waiver..............................49
SECTION 5.12. Control by Noteholders......................................50
SECTION 5.13. Waiver of Past Defaults.....................................50
SECTION 5.14. Undertaking for Costs.......................................51
SECTION 5.15. Waiver of Stay or Extension Laws............................51
SECTION 5.16. Action on Notes.............................................51
SECTION 5.17. Performance and Enforcement of Certain Obligations..........52
ARTICLE VI
THE INDENTURE TRUSTEE
ii
<PAGE>
SECTION 6.01. Duties of Indenture Trustee.................................53
SECTION 6.02. Rights of Indenture Trustee.................................56
SECTION 6.03. Individual Rights of Indenture Trustee......................57
SECTION 6.04. Indenture Trustee's Disclaimer..............................58
SECTION 6.05. Notice of Defaults..........................................58
SECTION 6.06. Reports by Indenture Trustee to Holders.....................58
SECTION 6.07. Compensation and Indemnity..................................58
SECTION 6.08. Replacement of Indenture Trustee............................59
SECTION 6.09. Successor Indenture Trustee by Merger.......................61
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee....................................................61
SECTION 6.11. Eligibility; Disqualification...............................63
SECTION 6.12. Preferential Collection of Claims Against Issue.............63
SECTION 6.13. Representations and Warranties of Indenture Trustee.........63
SECTION 6.14. Waiver of Setoffs...........................................64
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Indenture Trustee to Furnish Issuer Names and Addresses of
Noteholders...............................................65
SECTION 7.02. Preservation of Information; Communications to Noteholders..65
SECTION 7.03. Reports by Issuer...........................................65
SECTION 7.04. Fiscal Year.................................................66
SECTION 7.05. Reports by Indenture Trustee................................66
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money.........................................67
SECTION 8.02. Trust Accounts..............................................67
SECTION 8.03. Release of Collateral.......................................69
SECTION 8.04. Opinion of Counsel..........................................69
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders......70
SECTION 9.02. Supplemental Indentures With Consent of Noteholders.........71
SECTION 9.03. Execution of Supplemental Indentures........................73
SECTION 9.04. Effect of Supplemental Indenture............................73
SECTION 9.05. Conformity With Trust Indenture Act.........................73
SECTION 9.06. Reference in Notes to Supplemental Indentures...............74
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption.................................................75
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SECTION 10.02. Form of Redemption Notice..................................75
SECTION 10.03. Notes Payable on Redemption Date...........................76
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions, etc..................77
SECTION 11.02. Form of Documents Delivered to Indenture Trustee...........79
SECTION 11.03. Acts of Noteholders........................................80
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer, Insurer and
Rating Agencies..........................................80
SECTION 11.05. Notices to Noteholders; Waiver.............................81
SECTION 11.06. Alternate Payment and Notice Provisions....................82
SECTION 11.07. Conflict With Trust Indenture Act..........................82
SECTION 11.08. Effect of Headings and Table of Contents...................82
SECTION 11.09. Successors and Assigns.....................................82
SECTION 11.10. Separability...............................................83
SECTION 11.11. Benefits of Indenture......................................83
SECTION 11.12. Legal Holidays.............................................83
SECTION 11.13. Governing Law..............................................83
SECTION 11.14. Counterparts...............................................83
SECTION 11.15. Recording of Indenture.....................................83
SECTION 11.16. Trust Obligation...........................................84
SECTION 11.17. No Petition................................................84
SECTION 11.18. Inspection.................................................84
SECTION 11.19. Limitation of Liability of Owner Trustee..................85
SECTION 11.20. Certain Matters Regarding the Insurer......................85
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EXHIBITS
Schedule A -- Schedule of Contracts
Exhibit A -- Form of Depository Agreement
Exhibit B -- Form of Class A-1 Note
Exhibit C -- Form of Class A-2 Note
Exhibit D -- Form of Class A-3 Note
Exhibit E -- Form of Class A-4 Note
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THIS INDENTURE, dated as of October 1, 1999 (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Agreement"), is between ANRC Auto Owner Trust 1999-A, a Delaware business
trust, as the Issuer, and The Chase Manhattan Bank, a New York banking
corporation, as the Indenture Trustee.
Each party agrees as follows for the benefit of the other parties
and the Insurer and for the equal and ratable benefit of the holders of the
Issuer's 6.16625% Asset-Backed Notes, Class A-1 (the "Class A-1 Notes"), 6.54%
Asset-Backed Notes, Class A-2 (the "Class A-2 Notes"), 6.75% Asset-Backed Notes,
Class A-3 (the "Class A-3 Notes") and 6.94% Asset-Backed Notes, Class A-4 (the
"Class A-4 Notes" and, together with the Class A-1 Notes, the Class A-2 Notes
and the Class A-3 Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee on the Closing
Date, on behalf of and for the benefit of the Holders of the Notes and the
Insurer, without recourse, all of the Issuer's right, title and interest in, to
and under the Collateral.
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture and the Insurance
Agreement, all as provided in this Indenture and the Insurance Agreement.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders
of the Notes and the Insurer, acknowledges such Grant, accepts the trusts under
this Indenture in accordance with the provisions of this Indenture and agrees
to perform its duties required in this Indenture to the best of its ability to
the end that the interests of the Holders of the Notes and the Insurer may be
adequately and effectively protected.
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
(a) Except as otherwise specified herein or as the context may
otherwise require, (i) capitalized terms that are used herein that are not
otherwise defined herein shall have the meanings assigned to them in the Sale
and Servicing Agreement (as defined below) and (ii) the following terms have
the respective meanings set forth below for all purposes of this Indenture.
"Act" shall have the meaning specified in Section 11.03(a).
"Administration Agreement" shall mean the Administration Agreement,
dated as of October 1, 1999, by and among the Administrator, the Issuer, the
Seller and the Indenture Trustee, as the same may from time to time be amended,
supplemented or otherwise modified and in effect.
"Administrator" shall mean AutoNation Financial Services Corp., or
any successor Administrator under the Administration Agreement.
"Authorized Officer" shall mean, with respect to the Issuer, any
officer of the Owner Trustee who is authorized to act for the Owner Trustee in
matters relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee and the Insurer
on the Closing Date (as such list may be modified or supplemented from time to
time thereafter) and, so long as the Administration Agreement is in effect, any
officer of the Administrator who is authorized to act for the Administrator in
matters relating to the Issuer and to be acted upon by the Administrator
pursuant to the Administration Agreement and who is identified on a list of
Authorized Officers delivered by the Administrator to the Indenture Trustee and
the Insurer on the Closing Date (as such list may be modified or supplemented
from time to time thereafter).
"Basic Documents" shall mean the Certificate of Trust, the Owner
Trust Agreement, the Sale and Servicing Agreement, the Administration Agreement,
the Receivables Purchase Agreement, the Depository Agreement, the Insurance
Agreement, the Insurance Policy, the Indemnification Agreement (as defined in
the Insurance Agreement), the Securities Account Control Agreement, the
Custodial Agreement and this Indenture and other documents and certificates
delivered in connection therewith.
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"Book-Entry Notes" shall mean a beneficial interest in the Notes,
owner ship and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.09.
"Certificate of Trust" shall mean the Certificate of Trust of the
Issuer substantially in the form of Exhibit A to the Owner Trust Agreement.
"Class" shall mean a class of Notes whose form is identical except
for variation in denomination, principal amount or owner.
"Class A-1 Notes" shall mean the Class A-1 Notes, substantially in
the form of Exhibit B.
"Class A-2 Notes" shall mean the Class A-2 Notes, substantially in
the form of Exhibit C.
"Class A-3 Notes" shall mean the Class A-3 Notes, substantially in
the form of Exhibit D.
"Class A-4 Notes" shall mean the Class A-4 Notes, substantially in
the form of Exhibit E.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Collateral" shall mean the Trust Property.
"Controlling Party" shall mean the Insurer, so long as no Insurer
Default shall have occurred and be continuing, and the Indenture Trustee, for
the benefit of the Noteholders, for so long as an Insurer Default shall have
occurred and be continuing.
"Default" shall mean any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Definitive Notes" shall have the meaning specified in Section 2.09.
"Depository Agreement" shall mean the agreement dated as of October
1, 1999, by and among the Issuer, the Indenture Trustee, the Owner Trustee and
DTC, as the initial Clearing Agency substantially in the form of Exhibit A
hereto, as the same may be amended, supplemented or otherwise modified and in
effect from time to time.
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"DTC" shall mean The Depository Trust Company.
"Event of Default" shall have the meaning specified in Section 5.01.
"Executive Officer" shall mean, with respect to any corporation or
bank, the Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, President, Executive Vice President, any Vice President, the
Secretary, the Treasurer or Assistant Treasurer of such corporation or bank;
and with respect to any partnership, any general partner thereof.
"Fees" shall mean amounts due to be paid to the Owner Trustee in
connection with its performance as Owner Trustee in connection with ANRC Auto
Owner Trust 1999-A.
"Grant" shall mean to mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create and grant a lien
upon and a security interest in and right of set-off against, deposit, set over
and confirm pursuant to this Indenture. A Grant of the Collateral or of any
other agreement or instrument shall include all rights, powers and options (but
none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Collateral and all other
monies payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the granting party or otherwise and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Indebtedness" shall mean, with respect to any Person at any time,
(i) indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (ii)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (iii) current liabilities of such Person in respect of
unfunded vested benefits under plans covered by Title IV of ERISA; (iv)
obligations issued for or liabilities incurred on the account of such Person;
(v) obligations or liabilities of such Person arising under acceptance
facilities; (vi) obligations of such Person under any guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds to invest in any Person or otherwise to assure a creditor against
loss; (vii) obligations of such Person secured by any lien on
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property or assets of such Person, whether or not the obligations have been
assumed by such Person; or (viii) obligations of such Person under any interest
rate or currency exchange agreement.
"Indenture" shall mean this Agreement, as amended, supplemented or
otherwise modified and in effect from time to time.
"Indenture Trustee" shall mean The Chase Manhattan Bank, a New York
banking corporation, as Indenture Trustee under this Indenture, or any successor
Indenture Trustee under this Indenture.
"Independent" when used with respect to any specified Person, shall
mean such a Person who (i) is in fact independent of the Issuer, the Seller and
any of their respective Affiliates, (ii) is not a director, officer or employee
of the Issuer, the Seller or any of their respective Affiliates, (iii) is not a
person related to any officer or director of the Issuer, the Seller or any of
their respective Affiliates, (iv) is not a holder (directly or indirectly) of
more than 10% of any voting securities of the Issuer, the Seller or any of their
respective Affiliates, and (v) is not connected with the Issuer, the Seller or
any of their respective Affiliates as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
"Independent Certificate" shall mean a certificate or opinion to be
delivered to the Indenture Trustee and the Insurer under the circumstances
described in, and otherwise complying with, the applicable requirements of
Section 11.01, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee and the Insurer, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Insurer Default" shall have the meaning set forth in the Sale and
Servicing Agreement.
"Issuer" shall mean ANRC Auto Owner Trust 1999-A or any successor
pursuant to the terms of this Indenture as Issuer under this Indenture.
"Issuer Order" and "Issuer Request" shall mean a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
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"Noteholder" or "Holder" shall mean (a) the Person in whose name a
Note is registered on the Note Register or (b) if the Insurer has made a payment
under the Insurance Policy, the Insurer to the extent provided in Section 2.07
or 4.04 of this Indenture, the proviso to the definition of Outstanding herein
and Section 4.06 of the Sale and Servicing Agreement.
"Note Owner" shall mean, with respect to a Book-Entry Note, the
Person who is the owner of the beneficial interest of such Book-Entry Note, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.04.
"Officer's Certificate" shall mean a certificate signed by any
Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01, and
delivered to, the Indenture Trustee and the Insurer.
"Opinion of Counsel" shall mean a written opinion of counsel (who
may, except as otherwise expressly provided in this Indenture, be an employee of
or counsel to the Depositor or the Issuer or any of their respective Affiliates)
acceptable to the Indenture Trustee and the Insurer, and which opinion shall
comply with any applicable requirements of Section 11.01, and shall be in form
and substance satisfactory to and shall be addressed to the Indenture Trustee,
and the Insurer.
"Outstanding" shall mean, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision for such
notice has been made, satisfactory to the Indenture Trustee, has been
made); and
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(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes
are held by a bona fide purchaser;
provided, however, that Notes that have been paid with proceeds of the Insurance
Policy shall continue to remain Outstanding for purposes of this Indenture until
the Insurer has been paid as subrogee hereunder or reimbursed pursuant to the
Insurance Agreement, as evidenced by a written notice from the Insurer delivered
to the Indenture Trustee, and the Insurer shall be deemed to be the Holder of
such Notes to the extent of any unreimbursed payments made thereon by the
Insurer; provided further, that in determining whether the Holders of the
requisite Outstanding Principal Amount have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any other
Basic Document, Notes owned by the Issuer, the Seller or any of their respective
Affiliates shall be disregarded and deemed not to be Outstanding, except that,
in determining whether the Indenture Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Notes that a Responsible Officer of the Indenture Trustee has actual
knowledge are so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Indenture Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Issuer, the Seller or any
of their respective Affiliates.
"Outstanding Principal Amount" shall mean the aggregate principal
amount of all Notes of one Class or of all Classes, as the case may be,
Outstanding at the date of determination.
"Owner Trust Agreement" shall mean the Amended and Restated Owner
Trust Agreement, dated as of October 1, 1999, between the Seller and the Owner
Trustee, as the same may be amended, supplemented or otherwise modified and in
effect from time to time.
"Paying Agent" shall mean the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11, is acceptable to the Insurer and is authorized by the Issuer to
make the distributions from the Note Distribution Account, including payment of
principal of or interest on the Notes on behalf of the Issuer.
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"Payment Date" shall mean the 15th day of each calendar month, or,
if any such date is not a Business Day, the next succeeding Business Day,
commencing on November 15, 1999.
"Predecessor Note" shall mean, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under Section 2.05 in lieu of a mutilated,
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" shall mean any suit in equity, action at law or other
judicial or administrative proceeding.
"Rating Agency Condition" shall mean, for so long as any Notes
remain Outstanding and are rated by a Rating Agency, with respect to any action,
that (i) each such Rating Agency shall have been given ten Business Days (or
such shorter period as is acceptable to each such Rating Agency) prior notice
thereof and that each Rating Agency shall have notified the Seller, the
Servicer, the Insurer and the Issuer in writing that such action will not result
in a qualification, reduction or withdrawal of its then-current rating of any
Class of Notes, and (ii) each Rating Agency shall have confirmed to the Insurer
that the shadow rating of the Notes to the Insurer will not be lowered.
"Rating Event" shall mean the qualification, reduction or withdrawal
by either Rating Agency of its then-current rating of any Class of Notes,
without regard to the Insurance Policy.
"Record Date" shall mean, with respect to a Distribution Date or the
Redemption Date, the close of business on the Business Day immediately prior to
such Distribution Date or Redemption Date, or, in the event that Definitive
Notes are issued, the close of business on the last day of the calendar month
immediately preceding the month in which such Distribution Date or Redemption
Date occurs.
"Redemption Date" shall mean the Distribution Date specified by the
Servicer or the Issuer pursuant to Section 10.01.
"Redemption Price" shall mean in the case of a redemption of the
Notes pursuant to Section 10.01, an amount equal to the unpaid principal amount
of the Notes redeemed plus accrued and unpaid interest thereon at the respective
Note Rates of each Class of Notes being so redeemed to but excluding the
Redemption Date.
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"Registered Holder" shall mean the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of October 1, 1999, by and among the Issuer, the Seller, the
Indenture Trustee, the Servicer and the Custodian, as the same may from time to
time be amended, supplemented or otherwise modified and in effect.
"Securities Account Control Agreement" shall mean the Securities
Account Control Agreement, dated as of October 1, 1999, among the Issuer, the
Seller and the Indenture Trustee, as the same may from time to time be amended,
supplemented or otherwise modified and in effect.
"State" shall mean any one of the 50 states of the United States of
America or the District of Columbia.
"Termination Date" shall mean the latest of (i) the date on which
the Notes have been paid in full and the Indenture Trustee has returned the
Insurance Policy to the Insurer for cancellation, (ii) the date on which the
Insurer shall have received payment and performance of all amounts and
obligations owed to or on behalf of the Insurer under this Indenture or the
other Basic Documents and (iii) the date on which the Indenture Trustee shall
have received payment and performance of all amounts and obligations which the
Issuer and the Administrator may owe to or on behalf of the In denture Trustee
for the benefit of the Noteholders under the Basic Documents or the Notes.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of
1939, as amended, as in force on the date hereof, unless otherwise specifically
provided.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" shall mean the Securities and Exchange Commission.
"Indenture Securities" shall mean the Notes.
"Indenture Security Holder" shall mean a Noteholder.
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"Indenture to be Qualified" shall mean this Indenture.
"Indenture Trustee" or "Institutional Trustee" shall mean the
Indenture Trustee.
"Obligor" on the indenture securities shall mean the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term shall have the meaning assigned to it;
(ii) as used in this Indenture and in any certificate or other
document made or delivered pursuant hereto or thereto, an accounting term
not other wise defined shall have the meaning assigned to it in accordance
with generally accepted accounting principles as in effect from time to
time. To the extent that the definitions of accounting terms in this
Indenture or in any such certificate or other document are inconsistent
with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Indenture or in any such
certificate or other document shall control;
(iii) "or" is not exclusive;
(iv) "including" shall mean including without limitation;
(v) words in the singular include the plural and words in the plural
include the singular;
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith shall mean such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns; and
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(vii) the words "hereof," "herein" and "hereunder" and words of
similar import when used in this Indenture shall refer to this Indenture
as a whole and not to any particular provision of this Indenture; Section,
subsection and Exhibit references contained in this Indenture are
references to Sections, subsections and Exhibits in or to this Indenture
unless otherwise specified.
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ARTICLE II
THE NOTES
SECTION 2.01. Form. The Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes, in each case together with the
Indenture Trustee's certificate of authentication, shall be in substantially the
forms set forth as Exhibits B, C, D and E to this Indenture with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in Exhibits B, C, D and E hereto are part of the terms of
this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes
shall be executed on behalf of the Issuer by the Owner Trustee, as provided in
the Owner Trust Agreement by any of the Owner Trustee's Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Owner Trustee shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall, upon receipt of an Issuer Order,
authenticate and deliver for original issue the following aggregate principal
amount of Notes: (i) $125,000,000 of Class A-1 Notes, (ii) $314,000,000 of
Class A-2 Notes, (iii) $196,000,000 of Class A-3 Notes and (iv) $151,800,000 of
Class A-4 Notes. The aggregate principal amount of Class A-1 Notes, Class A-2
Notes, Class A-3 Notes and Class A-4 Notes outstanding at any time may not
exceed such respective amounts, except as otherwise provided in Section 2.05.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral
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multiples of $1,000 in excess thereof, except that one Note of each Class may be
issued in a different denomination.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for in the
forms of Notes attached as exhibits to this Indenture executed by the Indenture
Trustee by the manual signature of one of its authorized signatories, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes that are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive Notes
upon surrender of the temporary Notes at the office or agency of the Issuer to
be maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like tenor and principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.04. Registration; Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee shall be "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties of
Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee and the
Insurer prompt written
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notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee and the
Insurer shall have the right to inspect the Note Register at all reasonable
times and to obtain copies thereof, and the Indenture Trustee and the Insurer
shall have the right to rely upon a certificate executed on behalf of the Note
Registrar by an Executive Officer thereof as to the names and addresses of the
Holders of the Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.02, the
Issuer shall execute, and the Indenture Trustee shall authenticate and the
Noteholder shall obtain from the Indenture Trustee, in the name of the
designated transferee or transferees, one or more new Notes of the same Class in
any authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes
of the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
ex change shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by a commercial bank or trust company located, or having a
correspondent located, in the city of New York or the city in which the
Corporate Trust Office is located, or by a member firm of a national securities
exchange, and such other documents as the Indenture Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in
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connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.03, 2.07(c) or 9.06 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes selected for redemption or of any Note (i) for a period of
15 days preceding the due date for any payment with respect to the Note or (ii)
after the Indenture Trustee sends a notice of redemption with respect to such
Note in accordance with Section 10.01.
The provisions of this Section 2.04 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
transfer of Notes.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee and the Insurer such
security or indemnity as may be required by them to hold the Issuer, the
Indenture Trustee and the Insurer harmless, then, in the absence of notice to
the Issuer, the Note Registrar or a Responsible Officer of the Indenture Trustee
that such Note has been acquired by a bona fide purchaser, and provided that the
requirements of Section 8-405 of the UCC are met, the Issuer shall execute and
upon its request the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note of the same Class; provided that if any such destroyed, lost
or stolen Note, but not a mutilated Note, shall have become or within 15 days
shall be due and payable, or shall have been called for redemption, instead of
issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such re
placement Note was issued presents for payment such original Note, the Issuer,
the Insurer and the Indenture Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred
by the Issuer, the Insurer or the Indenture Trustee in connection therewith.
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Upon the issuance of any replacement Note under this Section 2.05,
the Issuer or the Indenture Trustee may require the payment by the Holder of
such Note of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other reasonable expenses (including
the fees and expenses of the Indenture Trustee or the Note Registrar and/or
counsel) in connection therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee, the
Insurer and any of their respective agents may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Insurer, the Indenture Trustee nor any of
their respective agents shall be affected by notice to the contrary.
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SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.
(a) Each Class of Notes shall accrue interest during each Interest
Accrual Period at the related Note Rate, and such interest shall be payable
monthly on each Distribution Date as specified therein, subject to Section 3.01.
Interest accrued on any Note but not paid on any Distribution Date will be due
on the immediately succeeding Distribution Date, together with, to the extent
permitted by applicable law, interest on such shortfall at the related Note
Rate. Interest on the Class A-1 Notes shall be calculated on the basis of the
actual number of days in the related Interest Accrual Period and a 360-day year.
Interest on the Class A-2 Notes, Class A-3 Notes and the Class A-4 Notes will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
Any installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one or
more Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.11, with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a
Distribution Date, a Redemption Date or on the related Final Scheduled
Distribution Date, as the case may be (and except for the Redemption Price for
any Note called for redemption pursuant to Section 10.01), which shall be
payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable on each Distribution
Date to the extent provided in the form of the related Note set forth as an
Exhibit hereto. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes of a Class of Notes shall be due and payable, if not
previously paid, on the earlier of:
(i) the Final Scheduled Distribution Date of such Class;
(ii) the Redemption Date;
(iii) if an Event of Default shall have occurred and be continuing,
so long as an Insurer Default shall not have occurred and be continuing,
the
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date on which the Insurer shall have declared the Notes to be immediately
due and payable in the manner provided in Section 5.02; or
(iv) if an Event of Default shall have occurred and be continuing,
and an Insurer Default has occurred and is continuing, the date on which
the Holders of Notes representing not less than 66 2/3% of the Outstanding
Principal Amount have declared the Notes to be immediately due and payable
in the manner provided in Section 5.02.
All principal payments on each Class of Notes shall be made pro rata to the
Noteholders of such Class entitled thereto. The Indenture Trustee shall notify
the Person in whose name a Note is registered at the close of business on the
Record Date preceding the Distribution Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed within five Business Days of such Distribution Date (or,
in the case of Notes registered in the name of Cede & Co., as nominee of DTC,
such notice shall be provided within one Business Day of such Distribution Date)
or receipt of notice of termination of the Trust pursuant to Section 9.01(c) of
the Owner Trust Agreement and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.02.
(c) Promptly following the date on which all principal of and
interest on the Notes has been paid in full and the Notes have been surrendered
to the Indenture Trustee, the Indenture Trustee shall, if the Insurer has paid
any amount in respect of the Notes under the Insurance Policy that has not been
reimbursed to the Insurer, deliver such surrendered Notes to the Insurer.
SECTION 2.08. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by
the Indenture Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they
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be destroyed or returned to it; provided that such Issuer Order is timely and
the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.09. Book-Entry Notes. The Notes, upon original issuance,
will be issued in the form of a typewritten Note or Notes representing the
Book-Entry Notes, to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Issuer. Such Notes shall initially be registered on the Note
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no Note Owner will receive a Definitive Note representing such Note Owner's
interest in such Note, except as provided in Section 2.11. Unless and until
definitive, fully registered Notes (the "Definitive Notes") have been issued to
Note Owners pursuant to Section 2.11:
(i) the provisions of this Section 2.09 shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the sole holder of the
Notes, and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants. Pursuant to the Depository Agreement, unless
and until Definitive Notes are issued pursuant to Section 2.11, the
Clearing Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit payments of principal of and
interest on the Notes to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Outstanding Principal Amount, the Clearing
Agency shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Note Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of
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the beneficial interest in the Notes and has delivered such instructions
to the Indenture Trustee.
SECTION 2.10. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.11, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Clearing Agency, and
shall have no obligation to the Note Owners.
SECTION 2.11. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities as described in the Depository
Agreement, and the Administrator or the Indenture Trustee is unable to locate a
qualified successor, or (ii) after the occurrence of an Event of Default or a
Servicer Default, Note Owners representing in the aggregate more than 50% of
the Outstanding Principal Amount of all Classes of Notes advise the Indenture
Trustee through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the related Note Owners, then the Indenture Trustee shall
notify all Note Owners, through the Clearing Agency, of the availability of
Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the Note or Notes evidencing the Book Entry Notes by the
Clearing Agency, accompanied by registration instructions from the Clearing
Agency, the Issuer shall execute and the Indenture Trustee shall authenticate
the Definitive Notes and deliver such Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Note Registrar or
the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes of a Class, the
Indenture Trustee shall recognize the Holders of the Definitive Notes as
Noteholders hereunder.
The Indenture Trustee shall not be liable if the Indenture Trustee
or the Administrator is unable to locate a qualified successor Clearing Agency.
The Definitive Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.12. Release of Collateral. Subject to Section 11.01 and
except as otherwise provided by the terms of the Basic Documents, the Indenture
Trustee shall release property from the lien of this Indenture only upon receipt
of an
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Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel
(not at the expense of the Indenture Trustee) and Independent Certificates in
accordance with Sections 314(c) and 314(d)(1) of the TIA or an Opinion of
Counsel in lieu of such Independent Certificates to the effect that the TIA
does not require any such Independent Certificates. The Indenture Trustee shall
surrender the Insurance Policy to the Insurer for cancellation upon satisfaction
of the conditions in Section 4.01 hereof.
SECTION 2.13. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes
will qualify as indebtedness. The Issuer, by entering into this Indenture, and
each Noteholder, by its acceptance of its Note (and each Note Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness.
SECTION 2.14. ERISA. Each purchaser or transferee of a Note that is
a Benefit Plan shall be deemed to have represented that the relevant conditions
for exemptive relief under Prohibited Transaction Class Exemption ("PTCE")
84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 or PTCE 96-23 or other applicable
exemption providing substantially similar relief have been satisfied.
SECTION 2.15. CUSIP Numbers. The Issuer in issuing the Notes may use
"CUSIP numbers" (if they are generally in use), and, if so, the Indenture
Trustee shall use CUSIP numbers in notices of redemption as a convenience to
Noteholders; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Issuer
will promptly notify the Indenture Trustee of any change in the CUSIP numbers.
SECTION 2.16. Issuer's Obligations Absolute. Nothing contained in
this Indenture shall impair, as between the Issuer and the Indenture Trustee,
the obligation of the Issuer to pay to the Indenture Trustee all amounts
payable in respect of the Notes as and when the same shall become due and
payable in accordance with the terms hereof, or prevent the Indenture Trustee
from exercising all rights, powers and remedies otherwise permitted by this
Indenture and by applicable law upon an Event of Default under this Indenture.
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SECTION 2.17. Authenticating Agent. (a) The Indenture Trustee may
appoint one or more authenticating agents with respect to the Notes which shall
be authorized to act on behalf of the Indenture Trustee in authenticating the
Notes in connection with the issuance, delivery, registration of transfer,
exchange or repayment of the Notes. Whenever reference is made in this Agreement
to the authentication of Notes by the Indenture Trustee or the Indenture
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Indenture Trustee by an authenticating
agent and a certificate of authentication executed on behalf of the Indenture
Trustee by an authenticating agent. Each authenticating agent must be acceptable
to the Seller and the Insurer.
(b) Any institution succeeding to the corporate agency business of
an authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Indenture
Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Indenture Trustee, the Insurer and the Seller. The
Indenture Trustee may at any time terminate the agency of an authenticating
agent by giving notice of termination to such authenticating agent, the Insurer
and the Seller. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to be
acceptable to the Indenture Trustee or the Seller, the Indenture Trustee
promptly may appoint a successor authenticating agent. Any successor
authenticating agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an authenticating agent. No successor
authenticating agent shall be appointed unless acceptable to the Indenture
Trustee, the Insurer and the Seller.
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ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal and Interest. The Issuer will
duly and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, subject to Section 8.02(c), the Issuer will cause to be distributed
all amounts on deposit in the Note Distribution Account on a Distribution Date
deposited therein pursuant to the Sale and Servicing Agreement for the benefit
of (i) the Class A-1 Notes, to the Class A-1 Noteholders, (ii) the Class A-2
Notes, to the Class A-2 Noteholders, (iii) the Class A-3 Notes, to the Class A-3
Noteholders and (iv) the Class A-4 Notes, to the Class A-4 Noteholders. Amounts
properly withheld under the Code by any Person from a payment to any Noteholder
of interest and/or principal shall be considered as having been paid by the
Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will
maintain or will cause the Administrator or the Indenture Trustee to maintain in
the City of New York, an office or agency where Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Indenture
Trustee of the location, and of any change in the location, of any such office
or agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
SECTION 3.03. Money for Payments to be Held in Trust.
(a) As provided in Section 8.02, all payments of amounts due and pay
able with respect to any Notes that are to be made from amounts withdrawn from
the Collection Account, the Payment Account and the Note Distribution Account
shall be made on behalf of the Issuer by the Indenture Trustee or by another
Paying Agent, and no amounts so withdrawn from the Collection Account, the
Payment Account and the Note Distribution Account for payments of Notes shall be
paid over to the Issuer except as provided in this Section.
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The Notes shall be non-recourse obligations of the Issuer and shall
be limited in right of payment to amounts available from the Collateral and the
Insurance Policy as provided in this Indenture and the Issuer shall not
otherwise be liable for payments on the Notes. No Person shall be personally
liable for any amounts payable under the Notes. If any other provision of this
Indenture conflicts or is deemed to conflict with the provisions of this
paragraph, the provisions of this paragraph shall control.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee and the Insurer (so long
as the Insurer is the Controlling Party) an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts
as Paying Agent, it hereby so agrees), subject to the provisions of this
Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Indenture Trustee and the Insurer notice of any
default by the Issuer (or any other obligor upon the Notes) in the making
of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
with holding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct any
Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums
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were held by such Paying Agent; and upon such payment by any Paying Agent to the
Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid either (i) to the Issuer upon receipt of an Issuer Request and with
the consent of the Insurer or (ii) to the Insurer to the extent such money or
any portion thereof was paid by the Insurer to the Indenture Trustee; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts so
paid to the Issuer), and all liability of the Indenture Trustee, the Insurer or
such Paying Agent with respect to such trust money shall thereupon cease;
provided that the Indenture Trustee or such Paying Agent, before being required
to make any such repayment, shall at the expense and direction of the Issuer
cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to or for the account of the Issuer or the Insurer, as applicable. The
Indenture Trustee may also adopt and employ, at the expense of the Issuer, any
other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in monies due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless, subject to the prior written consent of the Insurer,
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other State, in which case the Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity
and enforceability of this Indenture, the Notes, and the Collateral and each
other instrument included in the Collateral.
SECTION 3.05. Protection of Collateral. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Indenture
Trustee on
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behalf of the Noteholders and the Insurer to be prior to all other liens in
respect of the Collateral, and the Issuer shall take all actions necessary to
obtain and maintain, for the benefit of the Indenture Trustee on behalf of the
Noteholders and the Insurer, a first lien on and a first priority, perfected
security interest in the Collateral. The Issuer will from time to time take all
actions necessary, including without limitation preparing, executing,
delivering and filing all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, if applicable, all as prepared by the Servicer and
delivered to the Issuer, and will take such other action necessary or advisable
to:
(i) Grant more effectively all or any portion of the Collateral;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) created by this Indenture or carry out more effectively
the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Collateral and the rights of
the Indenture Trustee, the Insurer and the Noteholders in such Collateral
against the claims of all persons and parties; or
(vi) pay all taxes or assessments levied or assessed upon the
Collateral when due.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute all financing statements, continuation statements or
other instruments required to be executed pursuant to this Section.
SECTION 3.06. Opinions as to Collateral.
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee and the Insurer an Opinion of Counsel to the effect that, in the opinion
of such counsel, either (i) all financing statements and continuation statements
have been executed and filed that are necessary to create and continue the
Indenture Trustee's first priority perfected security interest in the Collateral
for the benefit of the Noteholders and the Insurer, and reciting the details of
such filings or referring to prior Opinions of
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Counsel in which such details are given, or (ii) no such action shall be
necessary to perfect such security interest.
(b) Within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months after
the Cut Off Date, the Issuer shall furnish to the Indenture Trustee and the
Insurer an Opinion of Counsel (which may be the same Opinion of Counsel
delivered pursuant to Section 9.02(i) of the Sale and Servicing Agreement),
dated as of a date during such 90-day period, to the effect that, in the opinion
of such counsel, either (i) all financing statements and continuation
statements have been executed and filed that are necessary to create and
continue the Indenture Trustee's first priority perfected security interest in
the Collateral for the benefit of the Noteholders and the Insurer, and reciting
the details of such filings or referring to prior Opinions of Counsel in which
such details are given, or (ii) no such action shall be necessary to perfect
such security interest. Such Opinion of Counsel shall also describe the
recording, filing, re-recording and refliling of this Indenture, any indentures
supplemental hereto and any other requisite documents and the execution and
filing of any financing statements and continuation statements that will, in the
opinion of such counsel, be required to maintain the lien and security interest
of this Indenture until December 31 in the following calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Contracts.
(a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Collateral or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the other Basic Documents or such other
instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the assistance
of other Persons acceptable to the Insurer so long as the Insurer is the
Controlling Party to assist it in performing its duties and obligations under
this Indenture, and any performance of such duties by a Person identified to
the Indenture Trustee and the Insurer in an Officer's Certificate shall be
deemed to be action taken by the Issuer. Initially, the Issuer has contracted
with the Servicer and the Administrator to assist the Issuer in performing its
duties under this Indenture. The Indenture Trustee shall not be responsible for
the action or inaction of the Servicer or the Administrator.
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(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Collateral,
including but not limited to filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of
this Indenture and the Sale and Servicing Agreement in accordance with and
within the time periods provided for herein and therein.
(d) If the Issuer shall have actual knowledge of the occurrence of a
Servicer Default, the Issuer shall promptly notify the Indenture Trustee, the
Insurer and each Rating Agency thereof, and shall specify in such notice the
action, if any, the Issuer is taking with respect of such default. If a
Servicer Default shall arise from the failure of the Servicer to perform any of
its duties or obligations under the Sale and Servicing Agreement with respect to
the Contracts, the Issuer shall take all reasonable steps available to it to
remedy such failure.
(e) Without limiting the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees (i) that it will not, without the prior
written consent of the Insurer and either the Indenture Trustee or the Holders
of at least a majority in Outstanding Principal Amount of the Notes, amend,
modify, waive, supplement, terminate or surrender, or agree to any amendment,
modification, supplement, termination, waiver or surrender of, the terms of any
Collateral (except to the extent permitted pursuant to the Sale and Servicing
Agreement) or waive timely performance or observance by the Servicer or the
Seller under the Sale and Servicing Agreement or any of the other Basic
Documents, and (ii) that any such amendment shall not (A) increase or reduce in
any manner the amount of, or accelerate or delay the timing of, distributions
that are required to be made for the benefit of the Noteholders or (B) reduce
the aforesaid percentage of the Notes that is required to consent to any such
amendment, without the consent of the Holders of all of the Notes. If the
Insurer and the Indenture Trustee or such Holders, as applicable, agree to any
such amendment, modification, supplement or waiver, the Issuer agrees, promptly
following a request by the Indenture Trustee or the Insurer to do so, to execute
and deliver, in its own name and at its own expense, such agreements,
instruments, consents and other documents as the Indenture Trustee or the
Insurer may deem necessary or appropriate in the circumstances.
SECTION 3.08. Negative Covenants. Until the Termination Date, the
Issuer shall not:
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(i) except as expressly permitted by this Indenture or the other
Basic Documents, sell, transfer, exchange or otherwise dispose of any of
the properties or assets of the Issuer, including those included in the
Collateral, unless directed to do so by the Indenture Trustee with the
prior written consent of the Insurer;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of the Notes (other than amounts properly
with held from such payments under the Code or applicable state law) or
assert any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon the Trust or any of its
assets;
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien created by this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be re leased from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the
Collateral or any part thereof or any interest therein or the proceeds
thereof (other than tax liens, mechanics' liens and other liens that arise
by operation of law, in each case on a Financed Vehicle and arising solely
as a result of an action or omission of the related Obligor), or (C)
permit the lien created by this Indenture not to constitute a valid first
priority (other than with respect to any such tax, mechanics' or other
lien) security interest in the Collateral; or
(iv) voluntarily dissolve or liquidate in whole or in part.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee and the Insurer, on or before 120 days after
the end of each fiscal year of the Issuer (commencing with the fiscal year ended
December 21, 2000), an Officer's Certificate stating, as to the Authorized
Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officer's supervision; and
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(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a default
in the compliance of any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status
thereof.
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger (A) shall be a Person organized and existing
under the laws of the United States of America or any State or the
District of Columbia, (B) shall not be an "investment company" as defined
in the Investment Company Act and (C) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture
Trustee and the Insurer, in form and substance satisfactory to the
Indenture Trustee and the Insurer, the due and punctual payment of the
principal of and interest on all Notes and the performance or observance
of every agreement and covenant of this Indenture and each other Basic
Document on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such consolidation or
merger, no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such consolidation or merger;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Indenture Trustee
and the Insurer to the effect that such consolidation or merger will not
have any material adverse tax consequence to the Trust or any Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Insurer an Officer's Certificate and an Opinion of Counsel (which
shall
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describe the actions taken as required by clause (v) above or that no such
actions will be taken) each stating that such consolidation or merger and
such supple mental indenture comply with this Article III and that all
conditions precedent herein provided for relating to such transaction have
been compiled with (including any filings required by the Exchange Act);
and
(vii) the Issuer shall have given the Insurer written notice of such
consolidation or merger at least 20 Business Days prior to the
consummation of such action and, so long as the Insurer is the Controlling
Party, shall have received the prior written approval of the Insurer of
such consolidation or merger and the Issuer or the Person (if other than
the Issuer) formed by or surviving such consolidation or merger has a net
worth, immediately after such consolidation or merger, that is (A)
greater than zero and (B) not less than the net worth of the Issuer
immediately prior to giving effect to such consolidation or merger.
(b) The Issuer shall not convey or transfer all or substantially all
of its properties or assets, including those included in the Collateral, to any
Person (except to the Indenture Trustee as expressly permitted by the Basic
Documents), unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer shall (A) be a United States citizen
or a Person organized and existing under the laws of the United States or
any State or the District of Columbia, (B) not be an "investment company"
as defined in the Investment Company Act, (C) expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture
Trustee and the Insurer, in form and substance satisfactory to the
Indenture Trustee and the Insurer (so long as the Insurer is the
Controlling Party), the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every agreement
and covenant of this Indenture and each other Basic Document on the part
of the Issuer to be performed or observed, all as provided herein, (D)
expressly agree by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject and
subordinate to the rights of Holders of the Notes and the Insurer, (E)
unless otherwise provided in such supplemental indenture, expressly agree
to indemnify, defend and hold harmless the Issuer, the Insurer and the
Indenture Trustee against and from any loss, liability or expense arising
under or related to this Indenture and the Notes and (F) expressly agree
by means of such supplemental indenture that such Person (or if a group of
Persons, then one specified Person) shall make all filings with the
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Commission (and any other appropriate Person) required by the Exchange Act
in connection with the Notes;
(ii) immediately after giving effect to such conveyance or transfer,
no Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such conveyance or transfer;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Indenture Trustee
and the Insurer to the effect that such conveyance or transfer will not
have any material adverse tax consequence to the Trust or any Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Insurer an Officer's Certificate and an Opinion of Counsel (which
shall describe the actions taken as required by clause (v) above or that
no such actions will be taken) each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filings required by the
Exchange Act); and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Insurer written notice of such
conveyance or transfer of properties or assets at least 20 Business Days
prior to the consummation of such action and shall have received the prior
written approval of the Insurer of such conveyance or transfer and the
Person acquiring by conveyance or transfer the properties or assets of
the Issuer has a net worth, immediately after such conveyance or
transfer, that is (A) greater than zero and (B) not less than the net
worth of the Issuer immediately prior to giving effect to such conveyance
or transfer.
SECTION 3.11. Successor Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance
with Section 3.10(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted for, and
may exercise every
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right and power of, the Issuer under this Indenture with the same effect as if
such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets or properties of
the Issuer pursuant to Section 3.10(b), ANRC Auto Owner Trust 1999-A will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery of written notice to the Indenture Trustee and the Insurer stating
that the Issuer is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Contracts in the manner contemplated by this Indenture and the other Basic
Documents and activities incidental thereto.
SECTION 3.13. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with the Servicer's obligations under the Sale and Servicing
Agreement.
SECTION 3.14. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Depositor or any owner of a beneficial interest in the Issuer
or otherwise with respect to any ownership or equity interest or security in or
of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; provided that
the Issuer may make, or cause to be made, distributions to the Servicer, the
Indenture Trustee, the Owner Trustee, the Insurer and the Noteholders as
contemplated by, and to the extent funds are available for such purpose under,
the Sale and Servicing Agreement, this Indenture or the Owner Trust Agreement.
The Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account, the Payment Account, the Note Distribution Account
or the Spread Account except in accordance with this Indenture and the other
Basic Documents.
SECTION 3.15. Notice of Events of Default. The Issuer agrees to give
the Indenture Trustee, the Owner Trustee, the Insurer and each Rating Agency
prompt written notice of each Event of Default hereunder and each default on the
part of the Servicer or the Seller of their respective obligations under the
Sale and Servicing Agreement.
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The Issuer shall deliver to the Indenture Trustee and the Insurer,
within three days after obtaining knowledge of the occurrence thereof, written
notice in the form of an Officer's Certificate of any event which with the
giving of notice or the lapse of time would become an Event of Default, its
status and what action the Issuer is taking or proposes to take with respect
thereto.
SECTION 3.16. Further Instruments and Acts. Upon request of the
Indenture Trustee or the Insurer (so long as the Insurer is the Controlling
Party), the Issuer will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.17. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.18. Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability
of the Issuer to per form its obligations under the Notes, this Indenture or any
other Basic Document or have a material adverse effect on the Insurer, the
Noteholders, the Issuer or the Collateral.
SECTION 3.19. Amendments of Sale and Servicing Agreement and Owner
Trust Agreement. The Issuer shall not agree to any amendment to Section 9.01 of
the Sale and Servicing Agreement or Section 9.01 of the Owner Trust Agreement to
eliminate the requirements thereunder that the Holders of the Notes consent to
amendments thereto as provided therein.
SECTION 3.20. Maintenance of Books and Records. The Issuer shall
maintain and implement, or shall cause to be maintained or implemented,
administrative and operating procedures reasonably necessary for the performance
of its obligations hereunder and the Issuer shall keep and maintain at all
times, or cause to be kept or maintained at all times in its office in The City
of New York, or the office of one of its agents in The City of New York, all
documents, books, records, accounts and other information reasonably necessary
or advisable for the performance of its obligations hereunder.
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SECTION 3.21. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale and Servicing Agreement, the Owner Trust
Agreement or this Indenture, the Issuer shall not make any loan or advance or
credit to, or guarantee (directly or indirectly or by an instrument having the
effect of assuring an other payment or performance on any obligation or
capability of so doing or otherwise), endorse or otherwise become contingently
liable, directly or indirectly, in connection with the obligations, stocks or
dividends of, or own, purchase, repurchase or acquire (or agree contingently to
do so) any stock, obligations, assets or securities of, or any other interest
in, or make any capital contribution to, any other Person.
SECTION 3.22. Critical Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.23. Removal of Administrator. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator unless the Rating
Agency Condition shall have been satisfied in connection with such removal and
the Indenture Trustee receives written notice of the foregoing and the Insurer
and the Indenture Trustee shall have given their prior written consent.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes (except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon (including any such
right of the Insurer pursuant to Section 2.07(c) or the definition of
"Outstanding"), (iv) Sections 3.03, 3.04, 3.05, 3.07, 3.08, 3.10, 3.11, 3.12,
3.14, 3.17, 3.18, 3.20, 3.21, 3.22, 3.23 and 6.06, (v) the rights, obligations
and immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.07 and the obligations of the Indenture
Trustee under Section 4.02), (vi) the rights of Noteholders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them and (vii) the obligation of the Indenture Trustee
to make claims under the Insurance Policy, which shall survive the Final
Scheduled Distribution Date of the Class A-4 Notes and extend through any
preference period applicable with respect to the Notes or any payments made in
respect of the Notes), and the Indenture Trustee, on demand of and at the
expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes, when:
(A) either:
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been re
placed or paid as provided in Section 2.05 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation and the Insurance
Policy has been returned to the insurer for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation:
(i) have become due and payable,
(ii) will become due and payable at the Final Scheduled
Distribution Date of the Class A-4 Notes within one
year, or
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(iii) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for
the giving of notice of redemption by the Indenture
Trustee in the name, and at the expense, of the Issuer,
and the Issuer, in the case of clauses (i), (ii) or (iii) above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture Trustee cash
or direct obligations of or obligations guaranteed by the United States of
America (which will mature prior to the date such amounts are payable), in trust
in an Eligible Account for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore delivered to the
Indenture Trustee for cancellation when due on the Final Scheduled Distribution
Date of the Class A-4 Notes or Redemption Date (if Notes shall have been called
for redemption pursuant to Section 10.01), as the case may be;
(B) the Issuer has paid or performed or caused to be paid or per
formed all amounts and obligations which the Issuer may owe to or on behalf of
(1) the Indenture Trustee on behalf of itself and for the benefit of the
Noteholders under this Indenture, the Basic Documents or the Notes and (2) the
Insurer under this Indenture and the Basic Documents, and as subrogee of the
rights of the Holders of the Notes; and
(C) the Issuer has delivered to the Indenture Trustee and the
Insurer an Officer's Certificate, an Opinion of Counsel and (if required by the
TIA, of the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements of
Section 11.01(a) and, subject to Section 11.02, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with and the Rating Agency Condition has been
satisfied.
SECTION 4.02. Application of Trust Money. All monies deposited with
the Indenture Trustee pursuant to Section 4.01 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Insurer and the Holders of the
particular Notes for the payment or redemption of which such monies have been
deposited with the Indenture Trustee, of all sums due and to become due thereon
for principal and interest; provided such monies need not be segregated from
other funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.
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SECTION 4.03. Repayment of Monies Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all monies then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes shall,
upon demand of the Issuer, be paid to the Indenture Trustee to be held and
applied according to Section 3.03 and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
SECTION 4.04. Effect of Payments by the Insurer; Subrogation.
(a) Anything herein to the contrary notwithstanding, any
distribution of principal of or interest on the Notes that is made with moneys
received pursuant to the terms of the Insurance Policy shall not be considered
payment of the Notes by the Issuer and shall not discharge the Trust Estate in
respect of such distribution. The Indenture Trustee acknowledges that, without
the need for any further action on the part of the Insurer, the Indenture
Trustee or the Note Registrar, (i) to the extent the Insurer makes payments,
directly or indirectly, on account of principal of or interest on the Notes to
the Noteholders thereof, the Insurer will be fully subrogated to the rights of
such Noteholders to receive such principal and interest from distributions of
the assets of the Trust and will be deemed to the extent of the payments so made
to be a Noteholder and (ii) the Insurer shall be paid principal and interest in
its capacity as a Noteholder until all such payments by the Insurer have been
fully reimbursed, but only from the sources and in the manner provided herein
for the distribution of such principal and interest and in each case only after
the Noteholders have received all payments of principal and interest due to them
under this Agreement on the related Distribution Date.
(b) Without limiting the rights or interests of the Noteholders as
other wise set forth herein, so long as no Insurer Default exists or is
continuing, the Indenture Trustee shall cooperate in all respects with any
reasonable request by the Insurer for action to preserve or enforce the
Insurer's rights or interests under this Agreement, including, upon the
occurrence of an Event of Default or a Non-Servicer Default, a request to take
any one or more of the following actions:
(i) institute proceedings for the collection of all amounts then
payable on the Notes or under this Agreement, enforce any judgment
obtained and collect moneys adjudged due; and
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(ii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and
remedies of the Insurer hereunder or under the other Basic Documents.
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ARTICLE V
EVENTS OF DEFAULT; REMEDIES
SECTION 5.01. Events of Default. "Event of Default," shall mean any
one of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) the delivery to the Insurer of a claim for payment under the
Insurance Policy;
(b) default in the payment of the interest on any Note when the same
becomes due and payable, and such default shall continue for a period of five
days or more;
(c) default in the payment of any principal due and payable on the
applicable Final Scheduled Distribution Date for such Class of Notes;
(d) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere in
this Section specifically dealt with), and such default shall continue or not be
cured for a period of 30 days after notice thereof shall have been given, by
registered or certified mail, to the Issuer by the Indenture Trustee or the
Insurer or to the Issuer, the Insurer and the Indenture Trustee by the Holders
of at least 25% of the Outstanding Principal Amount of the Notes, acting
together as a single class, in each case specifying such default and requiring
it to be reme died and stating that such notice is a notice of Default
hereunder;
(e) any representation or warranty made by the Issuer in this
Indenture or in any certificate delivered pursuant hereto or in connection
herewith having been incorrect in a material respect as of the time made, and
such breach not having been cured within 30 days after notice thereof is given
to the Issuer by the Indenture Trustee or the Insurer, or to the Issuer, the
Insurer and the Indenture Trustee by the holders of at least 25% of the
Outstanding Principal Amount of the Notes acting together as a single class, in
each case specifying such breach and requiring it to be remedied and stating
that such notice is a notice of Default hereunder;
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(f) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Collateral 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 of the Issuer or for any substantial part of the Collateral, or
ordering the winding-up or liquidation of the Issuer's affairs;
(g) the commencement by the Issuer 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 the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the consent by the Issuer
to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Collateral, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer generally
to pay its debts as such debts become due, or the taking of action by the Issuer
in furtherance of any of the foregoing;
(h) the failure of the Indenture Trustee to have a valid perfected
first priority security interest in the Trust Property; or
(i) The failure of any of the Basic Documents to be in full force
and effect at any time; provided that so long as no Insurer Default shall have
occurred and be continuing, neither the Indenture Trustee nor the Noteholders
may declare an Indenture Event of Default under the Indenture. So long as an
Insurer Default shall not have occurred and be continuing, an Event of Default
shall occur only upon delivery by the Insurer to the Indenture Trustee of notice
of the occurrence of an Event of Default. The failure to pay principal on a
Class of Notes shall not result in the occurrence of an Event of Default until
the Final Scheduled Distribution Date for such class of Notes.
SECTION 5.02. Rights Upon Event of Default.
(a) So long as no Insurer Default has occurred and is continuing, if
an Event of Default shall have occurred and be continuing, then the Insurer
shall have the right, but not the obligation, upon prior written notice to each
Rating Agency, to declare by written notice to the Issuer and the Indenture
Trustee that all, but not less than all of the Notes become immediately due and
payable, and upon any such declaration the unpaid principal amount of the Notes,
together with accrued and unpaid interest thereon, shall become immediately due
and payable. The failure to pay principal on a Class of Notes will not result in
the occurrence of an Event of Default
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until the Final Scheduled Distribution Date of such Class of Notes. The Insurer
may not, however, cause the Indenture Trustee to liquidate the Collateral, in
whole or in part, if the proceeds of such liquidation would not be sufficient to
pay the Outstanding Principal Amount, together with accrued interest thereon,
unless the Event of Default arose from a claim made on the Insurance Policy or
from an Event of Default specified in Section 5.01(f) or (g). The Indenture
Trustee will have no discretion with respect to the acceleration of the Notes
under the foregoing circumstances. In the event of any such acceleration of the
Notes, the Indenture Trustee shall continue to make claims under the Insurance
Policy with respect to the Notes.
(b) If an Insurer Default shall have occurred and be continuing and
an Event of Default specified in Section 5.01(b), (c), (d), (e), (f) or (g)
shall have occurred and be continuing, the Indenture Trustee may, and shall, if
so requested in writing by the Holders of Notes representing at least 66 2/3% of
the aggregate Outstanding Principal Amount of the Notes, declare that the Notes
become immediately due and payable, and upon any such declaration the unpaid
Outstanding Principal Amount of the Notes, together with accrued and unpaid
interest thereon, shall become immediately due and payable.
(c) Following any Event of Default, the Insurer, at its sole option,
may elect to pay all or any portion of the Outstanding Principal Amount of the
Notes, plus accrued interest thereon to the date of payment.
(d) At any time after such declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as provided in this Article V, either the
Insurer (so long as an Insurer Default has not occurred and is continuing) or
the Holders of the Notes representing a majority of the Outstanding Principal
Amount of the Notes (if an Insurer Default has occurred and is continuing), by
written notice to the Issuer and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on all Notes and all
other amounts that would then be due hereunder or upon such Notes if the Event
of Default giving rise to such acceleration had not occurred; and
(B) all sums advanced by the Insurer, together with interest
thereon, and remitted by the Indenture Trustee or the Insurer hereunder or by
the Insurer under
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the Insurance Policy, plus all amounts due to the Insurer under the Basic
Documents and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee, the Owner Trustee and the Insurer and their
respective agents and counsel; and
(ii) All Events of Default have been cured or waived as provided in
Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee.
(a) The Issuer covenants that, if the Notes are accelerated in
accordance with Section 5.02 the Issuer will, upon demand of the Indenture
Trustee, to the extent there are funds available in the Trust Accounts, pay to
the Indenture Trustee, for the benefit of the Holders of the Notes, the whole
amount then due and payable on such Notes for principal and interest (including,
without limitation, the amounts due on account of the Notes being accelerated),
with interest upon the overdue principal, and, to the extent payment at such
rate of interest shall be legally enforceable, upon overdue installments of
interest, at the applicable Note Rate and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses and disbursements of the
Indenture Trustee and its agents and counsel.
(b) If an Event of Default shall have occurred and be continuing,
the Indenture Trustee may, and shall (i) if no Insurer Default shall have
occurred and be continuing, at the direction of the Insurer, or (ii) if an
Insurer Default shall have occurred and be continuing, at the direction of the
Holders of Notes representing at least 66 2/3% of the Outstanding Principal
Amount of the Notes, as more particularly provided in Section 5.04, institute a
Proceeding for the collection of the amounts so due and unpaid, and shall
prosecute such Proceeding to judgment or final decree, and shall, at the
direction of the Controlling Party enforce the same against the Issuer or other
obligor upon such Notes and collect in the manner provided by law out of the
Collateral or the property of the Issuer or other obligor upon such Notes,
wherever situated, the moneys adjudged or decreed payable. At any time when (i)
the Insurer is the Controlling Party or (ii) (A) the Insurer is the Holder of
the Notes pursuant to Section 2.08 or 4.04 hereof or Section 4.06 of the Sale
and Servicing Agreement and (B) all amounts due to all other Holders of the
Notes pursuant to the Notes and this Indenture have been paid in full, the
Insurer may, in its own name, institute any Proceeding or take any other action
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permitted under this section to collect amounts due hereunder from the Issuer or
any other obligor on the Notes.
(c) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Collateral, Proceedings under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section 5.03, shall be entitled and empowered (but only at
the written direction of the Insurer so long as it is the Controlling Party), by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred by the
Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
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Trustee or the Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the In denture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or bad faith on the part of the
Indenture Trustee.
(d) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or Proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Notes and the Insurer.
(f) In any Proceedings brought by the Indenture Trustee (including
any Proceedings involving the interpretation of any provision of this
Indenture), the Indenture Trustee shall be held to represent all the
Noteholders, and it shall not be necessary to make any Noteholder a party to any
such Proceedings.
SECTION 5.04. Remedies.
(a) If (i) an Event of Default shall have occurred and be
continuing, the Indenture Trustee shall (subject to Section 5.04(b) and Section
5.05), if no Insurer Default shall have occurred and be continuing, at the
direction of the Insurer, or (ii) if an Event of Default specified in Section
5.01 (b), (c), (d), (e), (f) or (g) shall have occurred
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and be continuing, the Indenture Trustee shall (subject to Section 5.04(b) and
Section 5.05), if an Insurer Default shall have occurred and be continuing, at
the direction of the Holders of Notes representing at least 66 2/3% of the
Outstanding Principal Amount of the Notes, take one or more of the following
actions as so directed:
(i) institute Proceedings in its own name and as or on behalf of a
trustee of an express trust for the collection of all amounts then payable
on the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained and collect from
the Issuer and any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Collateral;
(iii) exercise any remedies of a secured party under the UCC and any
other remedy available to the Indenture Trustee and take any other
appropriate action to protect and enforce the rights and remedies of the
Indenture Trustee on behalf of the Noteholders and the Insurer under this
Indenture or the Notes;
(iv) sell or cause the Servicer to otherwise liquidate the
Collateral or any portion thereof or rights or interests therein, at one
or more public or private sales called and conducted in any manner
permitted by law and deliver the proceeds of such sale or liquidation to
the Indenture Trustee for distribution in accordance with the terms of
this Indenture; and
(v) maintain possession of the Collateral.
(b) Notwithstanding the foregoing,
(i) in the event that the Indenture Trustee is acting at the
direction of the Insurer, so long as no Insurer Default shall have
occurred and be continuing, if an Event of Default specified in Section
5.01 (b), (c), (d) or (e) shall have occurred and be continuing, the
Insurer shall not have the right to cause the Indenture Trustee or the
Servicer to, and neither the Indenture Trustee nor the Servicer shall,
liquidate the Collateral in whole or in part if the proceeds of such sale
or liquidation would not be sufficient to pay all outstanding principal of
and accrued interest on the Notes unless the Insurer has paid the Notes in
full under the Insurance Policy; and
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(ii) in the event that the Indenture Trustee is acting at the
direction of the Holders of Notes representing at least 66 2/3% of the
Outstanding Principal Amount of the Notes, the Noteholders shall not have
the right to direct the Indenture Trustee or the Servicer to, and neither
the Indenture Trustee nor the Servicer shall, liquidate the Collateral in
whole or in part unless (A) an Event of Default as specified in Section
5.01 (b), (c), (f) or (g) shall have occurred and be continuing and in any
case the Insurer shall have failed to make a payment required under the
Insurance Policy in accordance with its terms or (B) (1) an In denture
Event of Default as specified in Section 5.01(d) or (e) shall have
occurred and be continuing, (2) the Insurer shall not have failed to make
a payment required under the Insurance Policy in accordance with its terms
and (3) the proceeds of such sale or liquidation would be sufficient to
pay all outstanding principal of and accrued interest on the Notes and all
amounts owing to the In surer pursuant to the terms of the Insurance
Agreement or the other Basic Documents. In the event of a liquidation of
the Collateral pursuant to clause (ii), the Insurance Policy will not be
available to cover losses to Noteholders resulting from such liquidation,
and the Insurance Policy shall be terminated and the In surer shall have
no further obligation to make any payment thereunder.
(c) In determining the sufficiency or insufficiency of the proceeds
of a sale or liquidation of the Collateral to pay all amounts required pursuant
to Section 5.04(b)(i) or (ii) above, the Indenture Trustee may, but need not, at
the sole expense of the Issuer obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Collateral
for such purpose.
SECTION 5.05. Optional Preservation of the Contracts. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee, absent direction to the contrary from the
Insurer or the Noteholders pursuant to Section 5.04, shall maintain possession
of the Collateral.
SECTION 5.06. Priorities.
(a) If the Notes have been declared to be due and payable under
Section 5.02 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, any money collected by the
Indenture Trustee with respect to the Collateral or the Notes pursuant to this
Article or otherwise and any money that may then be held or thereafter received
by the Indenture Trustee with respect
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to the Collateral or the Notes (excluding any payments made under the Insurance
Policy), shall be applied in the following order and priority:
first, to the Servicer, to pay any unpaid Servicing Fee;
second, to pay any accrued and unpaid Owner Trustee Fees and
Indenture Trustee Fees and reasonable out-of-pocket expenses without
preference or priority of any kind;
third, to the Noteholders, to pay accrued interest on each Class of
Notes on a pro rata basis, without preference or priority of any kind,
based on the interest accrued (including, to the extent permitted by
applicable law, interest accrued on any interest accrued but not timely
paid) on each Class of Notes at the related Note Rate for such Class;
fourth, to the Noteholders, to pay principal on each Class of Notes
on a pro rata basis, without preference or priority of any kind, based on
the Outstanding Principal Amount of each Class of Notes, until the
Outstanding Principal Amount of each Class of Notes is reduced to zero;
fifth, to the Insurer, to pay amounts owing to the Insurer under the
Insurance Agreement or any of the Basic Documents (including, without
limitation, the Insurance Premium); and
sixth, to the Holder of the Residual Interest Certificate.
(b) The Indenture Trustee may, upon notification to the Issuer and
the Insurer, fix a record date and payment date for any payment to Noteholders
pursuant to this Section. At least 15 days before such record date, the
Indenture Trustee shall mail or send by facsimile to each Noteholder and the
Insurer a notice that states the record date, the payment date and the amount to
be paid.
(c) Payments under the Insurance Policy following acceleration of
the Notes pursuant to Section 5.02 shall be applied by the Indenture Trustee as
follows:
first, to the payment of amounts due and unpaid on the Notes
in respect of interest, ratably, without preference or priority of any kind; and
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second, to the payment of amounts due and unpaid on the Notes
in respect of principal, ratably, without preference or priority of any kind,
until the Notes are paid in full.
SECTION 5.07. Limitation of Suits. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Principal
Amount of the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own
name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings;
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of
a majority of the Outstanding Principal Amount of the Notes, voting
together as a single class; and
(vi) the Insurer has given its prior written consent or an Insurer
Default shall have occurred and be continuing.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing
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less than a majority of the Outstanding Principal Amount of the Notes, the In
denture Trustee shall act at the direction of the group of Holders of Notes with
the greater amount of Outstanding Principal Amount of Notes; however, if the
Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Notes with an equal Outstanding
Principal Amount of Notes, the Indenture Trustee in its sole discretion may
determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture and any such action shall be binding on all
parties.
SECTION 5.08. Unconditional Rights of Noteholders to Receive
Principal and Interest. Notwithstanding any other provisions in this Indenture,
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such Note
on or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Indenture
Trustee, the Insurer or any Noteholder has instituted any Proceeding to enforce
any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to
the Indenture Trustee, the Insurer or such Noteholder, then and in every such
case the Issuer, the Indenture Trustee, the Insurer and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee, the Insurer and the Noteholders shall
continue as though no such Proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee, the Insurer or to
the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or other wise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not a Waiver. No delay or omission
of the Indenture Trustee, the Insurer or any Holder of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such
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right or remedy or constitute a waiver of any such Default or Event of Default
or an acquiescence therein. Every right and remedy given by this Article V or by
law to the Indenture Trustee, the Insurer or to the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Indenture
Trustee, the Insurer or by the Noteholders, as the case may be.
SECTION 5.12. Control by Noteholders. If the Insurer is not the
Controlling Party, the Holders of a majority of the Outstanding Principal Amount
of the Notes shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee
with respect to the Notes or exercising any trust or power conferred on the
Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) any direction to the Indenture Trustee to sell or liquidate the
Collateral shall be subject to the terms of Section 5.04; and
(iii) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines,
in its sole discretion, might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
SECTION 5.13. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Notes as provided in Section 5.02, the
Insurer or the Holders of Notes representing more than 50% of the Outstanding
Principal Amount of the Notes with the consent of the Insurer may waive any past
Default or Event of Default and its consequences except a Default (a) in the
payment of principal of or interest on any of the Notes or (b) in respect of a
covenant or provision hereof that cannot be modified or amended without the
consent of the Holder of each Note, as applicable. In the case of any such
waiver, the Issuer, the Indenture Trustee, the Insurer and the Holders of the
Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom
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shall be deemed to have been cured and not to have occurred, for every purpose
of this Indenture, unless otherwise specified in such waiver; but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the In denture Trustee for any action taken, suffered or omitted by it
as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (i) any suit instituted by the
Indenture Trustee or the Insurer, (ii) any suit instituted by any Noteholder, or
group of Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Principal Amount of the Notes or (iii) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.15. Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in and manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantages of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee or the Insurer, but will suffer and permit the execution
of every such power as though no such law had been enacted.
SECTION 5.16. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee, the Insurer or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee or the
Insurer against the Issuer or by the levy of any execution under such judgment
upon any portion of the Collateral or upon any of the
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assets of the Issuer. Any money or property collected by the Indenture Trustee
shall be applied in accordance with Section 5.06.
SECTION 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee or the
In surer to do so and at the Administrator's expense, the Issuer shall take all
such lawful action as the Indenture Trustee or the Insurer may request to compel
or secure the performance and observance by the Seller, the Originator, the
Custodian, the Administrator and the Servicer as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement or the other Basic Documents, as applicable, in accordance with the
terms thereof, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the Sale
and Servicing Agreement or the other Basic Documents, as applicable, to the ex
tent and in the manner directed by the Indenture Trustee or the Insurer,
including the transmission of notices of default on the part of the Seller, the
Originator, the Custodian, the Administrator or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller, the Originator, the Custodian, the
Administrator or the Servicer of each of their obligations under the Sale and
Servicing Agreement or the other Basic Documents, as applicable.
(b) If the Indenture Trustee is the Controlling Party and if an
Event of Default has occurred and is continuing, the Indenture Trustee may, and
at the direction (which direction shall be given in writing and may include a
facsimile) of the Holders of 66 2/3% of the Outstanding Principal Amount of the
Notes shall, exercise all rights, remedies, powers, privileges and claims of
the Issuer against the Seller or the Servicer under or in connection with the
Sale and Servicing Agreement, including the right or power to take any action to
compel or secure performance or observance by the Seller or the Servicer of each
of their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Sale and Servicing
Agreement, and any right of the Issuer to take such action shall be suspended.
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, and of
which the Indenture Trustee shall have actual knowledge or has received notice,
the Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and with the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs; provided that if the Indenture Trustee shall assume
the duties of the Servicer pursuant to Section 3.07(e), the Indenture Trustee in
performing such duties shall use the degree of care and skill customarily
exercised by a prudent institutional servicer with respect to automobile retail
installment sales contracts that it services for itself or others.
(b) Except during the continuance of an Event of Default of which a
Responsible Officer of the Indenture Trustee shall have actual knowledge or
written notice:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations (including, without limitation, to exercise any
discretionary powers granted by this Indenture) shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith or negligence on its part, the In
denture Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture and the other Basic
Documents to which the Indenture Trustee is a party; provided, further,
that the Indenture Trustee shall not be responsible for the accuracy or
content of any of the aforementioned documents and the Indenture Trustee
shall have no obligation to verify, re-compute or recalculate any
numerical information provided to it pursuant to the Basic Documents.
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(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this paragraph does not limit the effect of Section 6.01(b);
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with the
direction received by the Indenture Trustee pursuant to Section 5.12 of
this Indenture.
(d) Every provision of this Indenture that in any way relates to the
In denture Trustee is subject to paragraphs (a), (b) and (c) of this Section
6.01.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayments of such funds or indemnity satisfactory to the Indenture Trustee in
its reasonable discretion against such risk or liability is not assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
(i) The Indenture Trustee shall, and hereby agrees that it will (i)
perform all of the obligations and duties required of it under the Sale and
Servicing Agreement and (ii) hold the Insurance Policy in trust, and will hold
any proceeds of any
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claim on the Insurance Policy in trust solely for application to the Notes as
provided in the Sale and Servicing Agreement.
(j) Except as otherwise required or permitted by the TIA, nothing
contained herein shall be deemed to authorize the Indenture Trustee to engage
in any business operations or any activities other than those set forth in this
Indenture. Specifically, the Indenture Trustee shall have no authority to
engage in any business operations, acquire any assets other than those
specifically included in the Collateral under this Indenture or otherwise vary
the assets held by the Trust. Similarly, the Indenture Trustee shall have no
discretionary duties other than performing those ministerial acts set forth
above necessary to accomplish the purpose of this Trust as set forth in this
Indenture.
(k) The Indenture Trustee shall not be liable in its individual
capacity with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with this Indenture or the Basic Documents or at the
direction of the Insurer or a majority of the Outstanding Principal Amount of
Notes or the Insurer, relating to the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee, or exercising or
omitting to exercise any trust or power conferred upon the Indenture Trustee,
under this Indenture.
(l) The Indenture Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any Default or Event of Default unless a
Responsible Officer of the Indenture Trustee shall have actual knowledge
thereof or shall have received written notice thereof. In the absence of actual
knowledge or receipt of such notice, the Indenture Trustee may conclusively
assume that there is no Default or Event of Default.
(m) Subject to the other provisions of this Indenture and the Basic
Documents, the Indenture Trustee shall have no duty (i) to see to any
recording, filing, or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing of any thereof,
(ii) to see to any insurance, (iii) to see to the payment or discharge of any
tax, assessment, or other governmental charge or any lien or encumbrance of any
kind owing with respect to, assessed or levied against, any part of the
Collateral, or (iv) to confirm or verify the contents of any reports or
certificates delivered to the Indenture Trustee pursuant to this Indenture
believed by the Indenture Trustee to be genuine and to have been signed or
presented by the proper party or parties.
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(n) In no event shall the Indenture Trustee be liable for lost
profits, even if the Indenture Trustee has been advised of the likelihood of
such loss or damage regardless of the form of action.
SECTION 6.02. Rights of Indenture Trustee.
(a) Except as otherwise provided in the second succeeding sentence,
the Indenture Trustee may conclusively rely and shall be protected in acting
upon or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, note, direction,
demand, election or other paper or document believed by it to be genuine and to
have been signed or presented by the proper person. The Indenture Trustee need
not investigate any fact or matter stated in the document. Notwithstanding the
foregoing, the Indenture Trustee, subject to Section 6.01(b)(ii) upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to the Indenture Trustee that shall be
specifically required to be furnished pursuant to any provision of this
Indenture or any of the other Basic Documents, as applicable, shall examine them
to determine whether they comply as to form to the requirements of this
Indenture or any of the other Basic Documents, as applicable.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate (with respect to factual matters) or an
Opinion of Counsel, as applicable. The Indenture Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
here under or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee appointed by the Indenture
Trustee with due care, provided, however, the Indenture Trustee shall not be
responsible for the negligence or misconduct of any custodian, subservicer or
any other agent not expressly appointed by the Indenture Trustee.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the
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other Basic Documents and the Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder or there under in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Noteholders, pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Indenture Trustee
security or indemnity satisfactory to the Indenture Trustee in its reasonable
discretion against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve the In
denture Trustee of the obligation, during the continuance of an Event of Default
of which a Responsible Officer of the Indenture Trustee shall have actual
knowledge, to exercise such of the rights and powers vested in it by this
Indenture, and to use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(g) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by a majority of Noteholders; provided that if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the
Indenture Trustee, not reasonably assured to the Indenture Trustee by the
security afforded to it by the terms of this Agreement, the Indenture Trustee
may require indemnity satisfactory to the Indenture Trustee in its reasonable
discretion against such cost, expense or liability as a condition to taking any
such action.
(h) The right of the Indenture Trustee to perform any discretionary
act enumerated in this Indenture shall not be construed as a duty, and the
Indenture Trustee shall not be answerable for other than its willful misconduct,
negligence or bad faith in the performance of such act.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
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rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee is required to comply with Sections 6.11 and
6.12.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the other Basic Documents, the Collateral or the
Notes, it shall not be accountable for the Issuer's use of the proceeds from the
Notes, and it shall not be responsible for any statement of the Issuer in this
Indenture or in any document issued in connection with the sale of the Notes or
in the Notes other than the Indenture Trustee's certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is
continuing and a Responsible Officer of the Indenture Trustee has actual
knowledge or has received written notice thereof, the Indenture Trustee shall
mail to each Noteholder and the Insurer notice of the Default within 90 days
after it occurs and to the Insurer, notice of such Default promptly after it
occurs. Except in the case of a Default in payment of principal of or interest
on any Note (including payments pursuant to the redemption of Notes), the
Indenture Trustee may withhold the notice to the Noteholders if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Holders. The
Indenture Trustee shall deliver to each Noteholder such information as may be
required to enable such holder to prepare its federal and state income tax
returns.
SECTION 6.07. Compensation and Indemnity. The Issuer shall pay or
cause the Administrator to pay to the Indenture Trustee from time to time
reasonable compensation for its services; provided, however, the amounts payable
by the Issuer hereunder shall be in amounts and in accordance with Section 4.03
of the Sale and Servicing Agreement. The Indenture Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Issuer shall reimburse or cause the Administrator to reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services;
provided, however, the amounts payable by the Issuer hereunder shall be in
amounts and in accordance with Section 4.03 of the Sale and Servicing
Agreement. Such expenses shall include the reasonable compensation and expenses
and disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Indenture Trustee hereby agrees to act
notwithstanding any failure of the Servicer or the Administrator to pay any
costs or expenses to the Indenture
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Trustee. The Issuer shall, or shall cause the Administrator to, indemnify the
Indenture Trustee against any and all loss, liability or expense (including
attorneys' fees) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder, except that neither the
Issuer nor the Administrator shall be liable for or required to indemnify the
Indenture Trustee from and against expenses arising or resulting from
negligence, bad faith or wilful misconduct on the part of the Indenture Trustee;
provided, however, any obligation of the Issuer in respect of such indemnity
under this Section 6.07 shall not be payable from the Collateral or Trust
Property. The Indenture Trustee shall notify the Issuer and the Administrator
promptly in writing of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer and the Administrator shall not
relieve the Issuer or the Administrator of its obligations hereunder, except as
provided in the last sentence of this paragraph. The Issuer shall, or shall
cause the Administrator to, defend any such claim, and the Indenture Trustee may
have separate counsel and the Issuer shall, or shall cause the Administrator to,
pay the fees and expenses of such counsel. Neither the Issuer nor the
Administrator need reimburse any expense or indemnify against any loss,
liability or expense incurred by the Indenture Trustee through the Indenture
Trustee's own willful misconduct, negligence or bad faith.
The Issuer's obligations to the Indenture Trustee pursuant to this
Section shall survive the resignation or removal of the Indenture Trustee and
the discharge of this Indenture. When the Indenture Trustee incurs expenses
after the occurrence of a Default specified in Section 5.01 (f) or (g) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
SECTION 6.08. Replacement of Indenture Trustee. The Indenture
Trustee may resign at any time by so notifying the Issuer, the Servicer and the
Insurer. The Issuer may, with the consent of the Insurer, and, at the request of
the Insurer unless an Insurer Default shall have occurred and be continuing,
shall, remove the Indenture Trustee, if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of the
Indenture Trustee in an involuntary case or proceeding under federal or
state banking or bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar
law, shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the
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Indenture Trustee or for any substantial part of the Indenture Trustee's
property, or ordering the winding-up or liquidation of the Indenture
Trustee's affairs, provided any such decree or order shall have continued
unstayed and in effect for a period of 30 consecutive days;
(iii) the Indenture Trustee commences a voluntary case under any
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian,
trustee, conservator, sequestrator or other similar official for the
Indenture Trustee or for any substantial part of the Indenture Trustee's
property, or makes any assignment for the benefit of creditors or fails
generally to pay its debts as such debts become due or takes any corporate
action in furtherance of any of the foregoing;
(iv) the Indenture Trustee otherwise becomes incapable of acting;
or
(v) the Indenture Trustee breaches any representation, warranty or
covenant made by it under any Basic Document.
If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee acceptable to the
Insurer.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee, the Insurer and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
Issuer or the successor Indenture Trustee shall mail a notice of its succession
to Noteholders. The retiring Indenture Trustee shall promptly transfer all
property held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer, the Insurer or the Holders of a majority of the
Outstanding Principal Amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee acceptable to
the Insurer.
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If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder, with the prior written consent of the Insurer, may petition any
court of competent jurisdiction for the removal of the Indenture Trustee and
the appointment of a successor Indenture Trustee acceptable to the Insurer.
Any resignation or removal of the Indenture Trustee and appointment
of a successor Indenture Trustee pursuant to the provisions of this Section
shall not be come effective until acceptance of appointment by the successor
Indenture Trustee pursuant to this Section. Notwithstanding the replacement of
the Indenture Trustee pursuant to this Section, the retiring Indenture Trustee
shall be entitled to payment or reimbursement of such amounts as such Person is
entitled pursuant to Section 6.07.
SECTION 6.09. Successor Indenture Trustee by Merger. If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be acceptable to
the Insurer and otherwise qualified and eligible under Section 6.11. The
Indenture Trustee shall provide the Insurer and each Rating Agency prompt notice
of any such transaction.
In case at the time such successor by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture while any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which, anywhere in the Notes or anywhere in this
Indenture, it is provided that the certificate of the Indenture Trustee shall
have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.
(a) Notwithstanding any other provision of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Collateral may at the time be located, the Indenture
Trustee, with the consent of the Insurer (so long as it is the Controlling
Party) shall have the power and may
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execute and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, jointly with the Indenture Trustee, or separate
trustee or separate trustees, of all or any part of the Trust Property, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Noteholders and the Insurer, such title to the Collateral, or any part hereof,
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee or the Insurer (so long
as it is the Controlling Party) may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor Indenture Trustee under Section 6.11 and no notice
to Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Property or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of co-
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appointment, either jointly with the Indenture Trustee or separately, as may be
provided therein, subject to all the provisions of this Indenture, specifically
including every provision relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee. Notwithstanding any thing to the
contrary in this Indenture, the appointment of any separate trustee or
co-trustee shall not relieve the Indenture Trustee of its obligations and duties
under this Indenture.
SECTION 6.11. Eligibility; Disqualification.
(a) The Indenture Trustee shall be acceptable to the Insurer and
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most re cent published annual report of condition. The Indenture Trustee
shall provide copies of such reports to the Insurer upon request. The Indenture
Trustee shall comply with TIA Section 310(b); provided that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA Section 310(b)(1) are met.
(b) If the long term debt rating of the Indenture Trustee shall not
be at least Baa3 from Moody's and BBB from Standard & Poor's, the Rating
Agencies and the Insurer shall be given notice of such lower long-term debt
rating.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
SECTION 6.13. Representations and Warranties of Indenture Trustee.
The Indenture Trustee hereby makes the following representations and warranties
on which the Issuer and Noteholders shall rely:
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(a) the Indenture Trustee is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation; and
(b) the Indenture Trustee has full power, authority and legal right
to execute, deliver, and perform this Indenture and shall have taken all
necessary action to authorize the execution, delivery and performance by it of
this Indenture.
SECTION 6.14. Waiver of Setoffs. The Indenture Trustee hereby
expressly waives any and all rights of setoff that the Indenture Trustee may
otherwise at any time have under applicable law with respect to the Trust
Property or the Trust Account Property and agrees that the amounts in the Trust
Accounts shall at all times be held and applied solely in accordance with the
provisions hereof and of the Sale and Servicing Agreement.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Indenture Trustee to Furnish Issuer Names and Ad
dresses of Noteholders. The Indenture Trustee will furnish or cause to be
furnished to the Issuer and the Administrator (i) not more than five days after
the earlier of (a) each Record Date and (b) three months after the last Record
Date, a list, in such form as the Issuer may reasonably require, of the names
and addresses of the Holders of Notes as of such Record Date and (ii) at such
other times as the Issuer may request in writing, within 30 days after receipt
by the Indenture Trustee of any such request, a list of similar form and
content as of a date not more than ten days prior to the time such list is
furnished; provided that so long as the Indenture Trustee is the Note Registrar,
no such list shall be required to be furnished. The Indenture Trustee or, if the
Indenture Trustee is not the Note Registrar, the Issuer shall furnish to the
Insurer in writing at such times as the Insurer may reasonably request a copy of
the list.
SECTION 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished. The Indenture Trustee shall make such list available
to the Insurer.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA Section 312(c).
SECTION 7.03. Reports by Issuer.
(a) The Issuer shall:
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(i) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Issuer may be required
to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section 313(c))
such summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) as may be required by rules and regulations prescribed from time
to time by the Commission.
SECTION 7.04. Fiscal Year. Unless the Issuer otherwise determines,
the fiscal year of the Issuer shall end on December 31 of each calendar year.
SECTION 7.05. Reports by Indenture Trustee. To the extent that any
of the events described in TIA Section 313(a) shall have occurred, the Indenture
Trustee shall, within 60 days after each December 15 beginning with December 15,
2000, mail to the Issuer, the Insurer and each Noteholder as required by TIA
Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA Section 313(b).
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money.
(a) General. Except as otherwise expressly provided herein, the
Indenture Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply
all such money received by it as provided in this Indenture. Except as
otherwise expressly provided in this Indenture, if any default occurs in the
making of any payment or performance under any agreement or instrument that is
part of the Collateral, the Indenture Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
(b) Claims Under Insurance Policy. The Notes will be insured by the
Insurance Policy pursuant to the terms set forth therein, notwithstanding any
provisions to the contrary contained in this Indenture or the Sale and Servicing
Agreement. All amounts received under the Insurance Policy shall be used solely
for the payment to Noteholders of principal of and interest on the Notes.
SECTION 8.02. Trust Accounts.
(a) On or prior to the Closing Date, the Indenture Trustee shall
establish and maintain in the name of the Indenture Trustee, for the benefit of
the Noteholders and the Insurer, the Trust Accounts as provided in Section 4.01
of the Sale and Servicing Agreement.
(b) On the Business Day immediately preceding each Distribution
Date, based solely on the Distribution Date Statement, the Indenture Trustee
shall withdraw from the Collection Account an amount equal to the amount of
Available Funds avail able with respect to such Distribution Date and deposit
such amount into the Payment Account, as provided in Section 4.03(a) of the Sale
and Servicing Agreement. On each Distribution Date, the Indenture Trustee will
apply the Available Funds available with respect to the related Collection
Period, together with amounts, if any, withdrawn from the Spread Account or
representing payment of the Insured Payment, to
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make the deposits to the Note Distribution Account required pursuant to Section
4.03(a) of the Sale and Servicing Agreement.
(c) On each Distribution Date and the Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the Note Distribution Account
in respect of such Distribution Date to Noteholders in the following order of
priority:
(i) to the Holders of each Class of Notes, on a pro rata basis, the
Note Interest Distributable Amount for such Distribution Date;
(ii) if such Distribution Date is the Final Scheduled Distribution
Date with respect to a Class of Notes, to the Holders of such Class of
Notes, the Note Principal Distributable Amount to the extent of the
remaining Outstanding Principal Amount of such Class of Notes;
(iii) to the Holders of the Class A-1 Notes, the remaining Note
Principal Distributable Amount (after giving effect to the payment, if
any, described in clause (ii) above), until the Outstanding Principal
Amount of the Class A-1 Notes is reduced to zero;
(iv) to the Holders of the Class A-2 Notes, the remaining Note
Principal Distributable Amount (after giving effect to the payments, if
any, described in clauses (ii) and (iii) above), until the Outstanding
Principal Amount of the Class A-2 Notes is reduced to zero;
(v) to the Holders of the Class A-3 Notes, the remaining Note
Principal Distributable Amount (after giving effect to the payments, if
any, described in clauses (ii), (iii) and (iv) above), until the
Outstanding Principal Amount of the Class A-3 Notes is reduced to zero;
and
(vi) to the Holders of the Class A-4 Notes, the remaining Note
Principal Distributable Amount (after giving effect to the payments, if
any, described in clauses (ii), (iii), (iv) and (v) above), until the
Outstanding Principal Amount of the Class A-4 Notes is reduced to zero.
(d) The Indenture Trustee shall make claims under the Insurance
Policy pursuant to Section 4.02(c) of the Sale and Servicing Agreement and in
accordance with the Insurance Policy. In making any such claim, the Indenture
Trustee shall comply with all the terms and conditions of the Insurance Policy.
Upon receipt of
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the Insured Payment, the Indenture Trustee shall distribute such Insured Payment
as part of the Note Distributable Amount under this Indenture.
SECTION 8.03. Release of Collateral.
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.07, the Indenture Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property from the lien of
this Indenture, or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances that are not inconsistent with the provisions of
this Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
Out standing and all sums due the Indenture Trustee pursuant to Section 6.07
have been paid in full and all due to the Insurer under the Basic Documents have
been paid, release any remaining portion of the Collateral that secured the
Notes from the lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Trust Accounts. The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.03(b) only upon receipt by it and the Insurer of an
Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel
and (if required by the TIA) Independent Certificates in accordance with TIA
Sections 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.01.
SECTION 8.04. Opinion of Counsel. The Indenture Trustee and the
Insurer, shall receive at least seven days prior written notice when requested
by the Issuer to take any action pursuant to Section 8.03(a), accompanied by
copies of any instruments involved, and the Indenture Trustee and the Insurer,
shall also require, as a condition to such action, an Opinion of Counsel, in
form and substance satisfactory to the Indenture Trustee and the Insurer (and
not at the expense of the Indenture Trustee or the Insurer), stating the legal
effect of any such action, outlining the steps required to complete the same,
and concluding that all conditions precedent to the taking of such action have
been complied with and such action will not materially and adversely impair the
security for the Notes or the rights of the Noteholders in contravention of the
provisions of this Indenture; provided that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Collateral. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Notes but with the
consent of the Insurer and with prior notice to each Rating Agency, the Issuer
and the Indenture Trustee, when authorized by an Issuer Order, and the other
parties hereto at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required to
be subjected to the lien created by this Indenture, or to subject to the
lien created by this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes and the Insurer, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or the Basic
Documents or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided that such action shall not adversely affect the interests of the
Holders of the Notes or the Insurer;
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(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as
may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Notes
but with the consent of the Insurer and with prior notice to each Rating Agency,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided that (1) such action shall
not (A) materially and adversely affect the interests of any Noteholder, as
evidenced by an Opinion of Counsel to be delivered upon the request of the
Indenture Trustee or (B) as confirmed by each Rating Agency rating the Notes of
the related series, cause the then current rating assigned to any class of such
Notes to be withdrawn or reduced without regard to the Insurance Policy and (2)
an opinion of counsel as to applicable tax matters is delivered.
SECTION 9.02. Supplemental Indentures With Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to each Rating Agency, with the consent of the Insurer
and with the consent of the Holders of not less than a majority of the
Outstanding Principal Amount of the Notes, acting as a single class, by Act of
such Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided that, subject to the express rights of
the Insurer under the Basic Documents, no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby:
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(a) change the date of payment of any installment of principal of,
or interest on, any Note or reduce the principal amount thereof, the note rate
thereon or the Redemption Price with respect thereto, or change any place of
payment where, or the coin or currency in which, any Note or the interest
thereon is payable;
(b) impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due on the
Notes on or after the respective due dates thereof (or, in the case of
redemption, on or after the Redemption Date);
(c) reduce the percentage of the Outstanding Principal Amount of the
Notes, the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture;
(d) modify or alter the provisions of the second proviso to the
definition of the term "Outstanding";
(e) reduce the percentage of the Outstanding Principal Amount of the
Notes, the consent of the Holders of which is required to direct the Indenture
Trustee to sell or liquidate the Collateral pursuant to Section 5.04;
(f) decrease the percentage of the Outstanding Principal Amount of
the Notes required to amend this Indenture or the other Basic Documents;
(g) permit the creation of any lien ranking prior to or on a parity
with the lien created by this Indenture with respect to any part of the
Collateral for such Notes or, except as otherwise permitted or contemplated
herein, terminate the lien created by this Indenture on any property at any
time subject hereto or deprive the Holder of any Note of the security provided
by the lien created by this Indenture; or
(h) result in a taxable event to any Noteholder for federal income
tax purposes.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter
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authenticated and delivered hereunder. The Indenture Trustee shall not be liable
for any such determination made in good faith.
It shall not be necessary for any act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such act shall approve the substance thereof.
Promptly after the execution by the parties hereto of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the In denture Trustee shall be entitled to receive, and subject
to Sections 6.01 and 6.02 shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise. The Indenture Trustee shall provide a fully executed
copy of any supplemental indenture to this Indenture to the Insurer and each
Rating Agency.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the parties hereto and the Holders of the Notes shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 9.05. Conformity With Trust Indenture Act. Every amendment
of this Indenture and every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act as then in
effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
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SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee and the Insurer as to
any matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption. In the event that the Servicer pursuant
to Section 8.01(a) of the Sale and Servicing Agreement purchases the corpus of
the Trust, the Notes are subject to redemption in whole, but not in part, on the
Distribution Date on which such repurchase occurs, for a purchase price equal to
the Redemption Price; provided that the Issuer has available funds sufficient to
pay the Redemption Price plus all amounts owed to the Insurer, the Servicer, the
Indenture Trustee and the Owner Trustee under the Basic Documents. The Seller,
the Servicer or the Issuer shall furnish the Insurer and each Rating Agency 20
days prior notice of such redemption and the Redemption Date. If the Notes are
to be redeemed pursuant to this Section 10.01, the Servicer or the Issuer shall
furnish notice of such election to the Indenture Trustee not later than 20 days
prior to the Redemption Date and shall deposit, one Business Day prior to the
Redemption Date, with the Indenture Trustee in the Note Distribution Account
the Redemption Price of the Notes to be redeemed and shall pay to the Insurer
all amounts due to it under the Basic Documents, whereupon all such Notes shall
be due and payable on the Redemption Date upon the furnishing of a notice
complying with Section 10.02 to each Holder of the Notes.
SECTION 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 shall be given by the Administrator by first-class mail, postage
prepaid or by facsimile, mailed or transmitted not less than five days prior to
the applicable Redemption Date to each Holder of Notes, as of the close of
business on the Re cord Date preceding the applicable Redemption Date, at such
Holder's address appearing in the Note Register. In addition, the Administrator
shall notify the Insurer and the Rating Agencies upon the redemption of any
Class of Notes, pursuant to Section l(a)(i) of the Administration Agreement.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the Issuer
to be maintained as provided in Section 3.02).
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Notice of redemption of the Notes shall be given by the
Administrator in the name and at the expense of the Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note shall not
impair or affect the validity of the redemption of any other Note.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall, following notice of redemption (if any)
as required by Section 10.02, on the Redemption Date become due and payable at
the Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee and the Insurer (i) an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with, (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and (iii) (if required by
the TIA) an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section 11.01. Notwithstanding the
foregoing, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property subject to the lien created by this Indenture, the
Issuer shall, in addition to any
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obligation imposed in Section 11.01(a) or elsewhere in this Indenture, furnish
to the Indenture Trustee and the Insurer an Officer's Certificate certifying or
stating the opinion of the signer thereof as to the fair value (within 90 days
of such deposit) to the Issuer of the Collateral or other property or securities
to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee and the Insurer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee and the
Insurer an Independent Certificate as to the named matters, if the fair
value to the Issuer of the property to be so deposited and of all other
such property made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth
in the Officer's Certificates delivered pursuant to clause (i) above and
this clause (ii), is 10% or more of the Outstanding Principal Amount of
the Notes, but such Officer's Certificate need not be furnished with
respect to any property so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent (1%) of the Outstanding Principal Amount
of the Notes.
(iii) Whenever any property or securities are to be released from
the lien created by this Indenture, the Issuer shall also furnish to the
Indenture Trustee and the Insurer an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the fair
value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person the
proposed release will not impair the security created by this Indenture
in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee and the Insurer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee and the
Insurer an Independent Certificate as to the same matters if the fair
value of the property or securities and of all other property or
securities released from the lien created by this Indenture since the
commencement of the then current fiscal year, as set forth in the
Officer's Certificate required by clause (iii) above and this clause (iv),
equals 10% or more of the Outstanding Principal Amount of the Notes, but
such Officer's Certificate need not be furnished in the case of any
release of property or securities if the fair value thereof as set forth
in the related Officer's Certificate is less than $25,000 or less than one
percent of the then Outstanding Principal Amount of the Notes.
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SECTION 11.02. Form of Documents Delivered to Indenture Trustee. In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such officer or counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.03. Acts of Noteholders.
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(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided
in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer, Insurer
and Rating Agencies.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders is to be made upon,
given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder, the Insurer or by the
Issuer shall be sufficient for every purpose hereunder if in writing,
personally delivered, sent by facsimile transmission and confirmed or
mailed by overnight service, to or with the Indenture Trustee at its
Corporate Trust Office;
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(ii) the Issuer by the Indenture Trustee, the Insurer or by any
Noteholder shall be sufficient for every purpose hereunder if in writing,
person ally delivered, sent by facsimile transmission and confirmed or
mailed by overnight service, to the Issuer addressed to: ANRC Auto Owner
Trust 1999-A, in care of The Bank of New York (Delaware), as Owner
Trustee, White Clay Center, Route 273, Newark, Delaware 19711, Attention:
Corporate Trust Administration, or at any other address furnished in
writing to the Indenture Trustee by the Issuer; or
(iii) the Insurer by the Issuer or the Indenture Trustee shall be
sufficient for any purpose hereunder if in writing, personally delivered,
sent by facsimile transmission and confirmed or mailed by overnight
service, to the Insurer addressed to: MBIA Insurance Corporation, 113
King Street Armonk, New York 10504.
(b) Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, sent by facsimile transmission and confirmed or mailed by
overnight service, to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York 10007 and (ii) in the case of Standard & Poor's, at the
following address: Standard & Poor's Ratings Services, 55 Water Street, New
York, New York 10041, Attention: Asset Backed Surveillance Department; or as to
each of the foregoing, at such other address as shall be designated by written
notice to the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by
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Noteholders shall be filed with the Indenture Trustee but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default
SECTION 11.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for in
this Indenture for such payments or notices. The Issuer will furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee will
cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.07. Conflict With Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
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SECTION 11.10. Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. The Insurer and its successors
and assigns shall be a third-party beneficiary to the provisions of this
Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture so long as no Insurer Default shall have occurred
and be continuing. Nothing in this In denture or in the Notes, express or
implied, shall give to any Person, other than the par ties hereto and the
Insurer and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Collateral, any benefit or any legal or equitable right, remedy or claim
under this Indenture. The Insurer may disclaim any of its rights and powers
under this Indenture, but not its duties and obligations under the Insurance
Policy, upon delivery of a written notice to the Indenture Trustee.
SECTION 11.12. Legal Holidays. In any case where the date on which
any payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest shall
accrue on the amount of such payment for the period from and after any such
nominal date.
SECTION 11.13. Governing Law. This Indenture shall, in accordance
with Section 5-1401 of the General Obligations Law of the State of New York, be
governed by, and construed in accordance with, the laws of the State of New
York without regard to conflict of law provisions thereof.
SECTION 11.14. Counterparts. This Indenture may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the In denture Trustee and the Insurer) to the effect
that such recording is necessary either for the protection of the Noteholders or
any other Person secured hereunder or for
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the enforcement of any right or remedy granted to the Indenture Trustee under
this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the Owner Trust
Agreement.
SECTION 11.17. No Petition. The parties hereto, by entering into
this Indenture, and each Noteholder, by accepting a Note or a beneficial
interest in a Note, hereby covenant and agree that they will not at any time
institute against the Seller or the Issuer, or join in any institution against
the Seller or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee or of
the Insurer, during the Issuer's normal business hours, to examine all the books
of account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees and independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee and the Insurer shall and shall cause their
respective representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee and the Insurer
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<PAGE>
may reasonably determine that such disclosure is consistent with its obligations
hereunder.
SECTION 11.19. Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary, this instrument has
been counter signed by The Bank of New York (Delaware) not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall The Bank of New York (Delaware) in its individual capacity or any
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder,
as to all of which recourse shall be had solely to the assets of the Issuer. For
all purposes of this Agreement, in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Articles VI, VII and VIII of the
Owner Trust Agreement. Notwithstanding anything herein to the contrary, Section
2.07 of the Owner Trust Agreement shall remain in full force and effect.
SECTION 11.20. Certain Matters Regarding the Insurer. So long as an
Insurer Default shall not have occurred and be continuing, the Insurer shall
have the right to exercise all rights, including voting rights, which the
Noteholders are entitled to exercise pursuant to this Indenture, without any
consent of such Noteholders; provided that without the consent of each
Noteholder affected thereby, the Insurer shall not exercise such rights to
amend this Indenture in any manner that would (i) reduce the amount of, or delay
the timing of, collections of payments on the Contracts or distributions which
are required to be made on any Note, (ii) adversely affect in any material
respect the interests of any of the Noteholders, (iii) alter the rights of any
such Noteholder to consent to such amendment or (iv) not be permitted under
Section 9.02 herein.
Notwithstanding any provision in this Indenture to the contrary, in
the event an Insurer Default shall have occurred and be continuing, the Insurer
shall not have the right to take any action under this Agreement or to control
or direct the actions of the Trust, the Seller, the Indenture Trustee or the
Owner Trustee pursuant to the terms of this Indenture, nor shall the consent of
the Insurer be required with respect to any action (or waiver of a right to take
action) to be taken by the Trust, the Seller, the Indenture Trustee, the Owner
Trustee or the Noteholders; provided that the consent of the Insurer shall be
required at all times with respect to any amendment of this Indenture.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and delivered as of the day and year first above written.
ANRC AUTO OWNER TRUST
1999-A, as Issuer
By: THE BANK OF NEW YORK
(DELAWARE), not in its individual
capacity but solely as Owner
Trustee
By: /s/ Reyne A. Macadaeg
--------------------------------
Name: Reyne A. Macadaeg
Title: Assistant Vice President
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By: /s/ Jennifer Richardson
--------------------------------
Name: Jennifer Richardson
Title: Assistant Vice President
87
<PAGE>
SCHEDULE A
SCHEDULE OF CONTRACTS
[Schedules of Contracts are on file at the offices of the Seller, the Servicer,
the Indenture Trustee and the Insurer]
88
<PAGE>
EXHIBIT A
FORM OF NOTE DEPOSITORY AGREEMENT
[Begins on Next Page]
A-1
<PAGE>
EXHIBIT B
FORM OF CLASS A-1 NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT
INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ANRC AUTO OWNER TRUST ______
____% ASSET-BACKED NOTE, CLASS A-1
REGISTERED $__________________
No. 1 CUSIP NO. __________________
ANRC Auto Owner Trust _______, a business trust organized and
existing under the laws of the State of Delaware (the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of _________ ($_____________), payable to the extent described in
the Indenture and the Sale and Servicing Agreement referred to on the reverse
hereof on each Distribution Date; provided that the entire unpaid principal
amount of this Note shall be payable on the earlier of the Distribution Date
occurring in ________ (the "Class A-1 Final Scheduled Distribution Date") and
the Redemption Date, if any, selected pursuant to the Indenture.
B-1
<PAGE>
The Issuer will pay interest on this Note at the Class A-1 Note Rate
shown above on each Distribution Date until the principal of this Note is paid
or made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), or on the Closing Date in
the case of the first Distribution Date, subject to certain limitations
contained in the Indenture. Interest on this Note will accrue for each
Distribution Date during the period (the "Interest Accrual Period" with respect
to such Distribution Date) from and including the Distribution Date immediately
preceding such Distribution Date (or, in the case of the first Distribution
Date, from and including the Closing Date) to but excluding such Distribution
Date. The Issuer shall pay interest on overdue installments of interest at the
Class A-1 Note Rate to the extent lawful. Interest will be computed on the basis
of a 360-day year and the actual number of days in the related Interest Accrual
Period. Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Insurance Policy") issued by MBIA Insurance Corporation
(the "Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payment of the Note Interest Distributable Amount on each Distribution Date and
the Guaranteed Note Principal Amount of the Notes, all as more fully set forth
in the Insurance Policy.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
B-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by an Authorized Officer, as set forth below.
Date:______________, _____ ANRC AUTO OWNER TRUST
By:____________________________________,
not in its individual capacity, but
solely as Owner Trustee
By:_____________________________________
Name:
Title:
B-3
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
_______________________________________,
as Indenture Trustee
By:
Authorized Signatory
B-4
<PAGE>
[REVERSE OF CLASS A-1 NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its "____% Asset-Backed Notes, Class A-1" (the "Class A-1 Notes"),
all issued under the Indenture _______, dated as of _________, ____ (as amended,
supplemented or other wise modified and in effect from time to time, the
"Indenture"), between the Issuer and, as indenture trustee (the "Indenture
Trustee"), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Insurer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended, and if not defined therein, in the Sale and Servicing
Agreement (as defined in the Indenture).
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes (collectively, the "Notes") are and will be equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture.
Principal payable on the Class A-1 Notes will be paid on each
Distribution Date in the amount specified in the Indenture and the Sale and
Servicing Agreement. As described above, the entire unpaid principal amount of
this Note will be pay able on the earlier of the Class A-1 Final Scheduled
Distribution Date and the Redemption Date, if any, selected pursuant to the
Indenture. Notwithstanding the foregoing, under certain circumstances, the
entire unpaid principal amount of the Class A-1 Notes shall be due and payable
following the occurrence and continuance of an Event of Default, as described
in the Indenture. All principal payments on the Class A-1 Notes shall be made
pro rata to the Class A-1 Noteholders entitled thereto.
Payments of principal and interest on this Note due and payable on
each Distribution Date or Redemption Date shall be made by check mailed to the
Person whose name appears as the registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on the
related Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee. Such checks shall be
mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date with out requiring
that this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) affected by
any payments made on any Distribution Date or Redemption Date shall be binding
upon all
B-5
<PAGE>
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the remaining unpaid principal amount of this Note on a
Distribution Date or Redemption Date, then the Indenture Trustee, in the name of
and on behalf of the Issuer, will notify the Person who was the registered
Holder hereof as of the Record Date preceding such Distribution Date or
Redemption Date by notice mailed within five days of such Distribution Date or
Redemption Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Corporate Trust Office of the
Indenture Trustee or at the office of the Indenture Trustee's agent appointed
for such purposes located in The City of New York.
As provided in the Indenture, the Notes are subject to redemption in
whole, but not in part, on any Distribution Date as of which the Pool Balance is
less than or equal to 10% of the Original Pool Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or Agency
designated by the Issuer pursuant to the Indenture. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
by accepting
B-6
<PAGE>
the benefits of the Indenture and such Note that such Noteholder or Note Owner
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
Federal or state bankruptcy or similar law.
The Issuer has entered into the Indenture, and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness secured by
the Collateral. Each Noteholder, by acceptance of a Note (and each Note Owner by
acceptance of a beneficial interest in a Note), agrees to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and the Insurer and any agent of the
Issuer, the Indenture Trustee or the Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Indenture
Trustee, the Insurer nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Principal Amount of the Notes. The
Indenture also contains provisions permitting the Insurer and the Holders of
Notes representing specified percentages of the Outstanding Principal Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Insurer
or Holder of this Note (or any one of more Predecessor Notes) shall be
conclusive and binding upon such Insurer or Holder and upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof or
in ex change hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of Holders of the Notes issued thereunder and with the
consent of the Insurer.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
B-7
<PAGE>
This Note and the Indenture shall, in accordance with Section 5-1401
of the General Obligations Law of the State of New York, be construed in
accordance with the laws of the State of New York without regard to its conflict
of law provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
B-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated: */
Signature Guaranteed:
*/
*/NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
B-9
<PAGE>
EXHIBIT C
FORM OF CLASS A-2 NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT
INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ANRC AUTO OWNER TRUST _______
____% ASSET-BACKED NOTE, CLASS A-2
REGISTERED $_____________
No. 1 CUSIP NO. ________________
ANRC Auto Owner Trust _____, a business trust organized and existing
under the laws of the State of Delaware (the "Issuer"), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal sum
of ______ ($____________), payable to the extent described in the Indenture and
the Sale and Servicing Agreement referred to on the reverse hereof on each
Distribution Date; provided that the entire unpaid principal amount of this Note
shall be payable on the earlier of the Distribution Date occurring in _______
(the "Class A-2 Final Scheduled Distribution Date") and the Redemption Date, if
any, selected pursuant
C-1
<PAGE>
to the Indenture. No payments of principal of the Class A-2 Notes shall be made
until the principal amount of the Class A-1 Notes has been reduced to zero.
The Issuer will pay interest on this Note at the Class A-2 Note Rate
shown above on each Distribution Date until the principal of this Note is paid
or made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), or on the Closing Date in
the case of the first Distribution Date, subject to certain limitations
contained in the Indenture. Interest on this Note will accrue for each
Distribution Date during the period (the "Interest Accrual Period" with respect
to such Distribution Date) from and including the Distribution Date immediately
preceding such Distribution Date (or, in the case of the first Distribution
Date, from and including the Closing Date) to but excluding such Distribution
Date. The Issuer shall pay interest on overdue installments of interest at the
Class A-2 Note Rate to the extent lawful. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Insurance Policy") issued by MBIA Insurance Corporation
(the "Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payment of the Note Interest Distributable Amount on each Distribution Date and
the Guaranteed Principal Amount of the Notes as more fully set forth in the
Insurance Policy.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
C-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by an Authorized Officer, as set forth below.
Date: __________________, ____ ANRC AUTO OWNER TRUST
By:____________________________________,
not in its individual capacity, but
solely as Owner Trustee
By:_____________________________________
Name:
Title:
C-3
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
_______________________________________,
as Indenture Trustee
By:
Authorized Signatory
C-4
<PAGE>
[REVERSE OF CLASS A-2 NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its "____% Asset-Backed Notes, Class A-2" (the "Class A-2
Notes"), all issued under the Indenture, dated as of _________, ____ (as
amended, supplemented or other wise modified and in effect from time to time,
the "Indenture"), between the Issuer and The Chase Manhattan Bank, as indenture
trustee (the "Indenture Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Insurer, the Indenture
Trustee and the Holders of the Notes. The Notes are subject to all terms of the
Indenture. All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture, as so supplemented or amended, and if not defined
therein, in the Sale and Servicing Agreement (as defined in the Indenture).
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes (collectively, the "Notes") are and will be equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture.
Principal payable on the Class A-2 Notes will be paid on each
Distribution Date in the amount specified in the Indenture and the Sale and
Servicing Agreement. As described above, the entire unpaid principal amount of
this Note will be pay able on the earlier of the Class A-2 Final Scheduled
Distribution Date and the Redemption Date, if any, selected pursuant to the
Indenture. Notwithstanding the foregoing, under certain circumstances, the
entire unpaid principal amount of the Class A-2 Notes shall be due and payable
following the occurrence and continuance of an Event of Default, as described
in the Indenture. All principal payments on the Class A-2 Notes shall be made
pro rata to the Class A-2 Noteholders entitled thereto.
Payments of principal and interest on this Note due and payable on
each Distribution Date or Redemption Date shall be made by check mailed to the
Person whose name appears as the registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on the
related Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee. Such checks shall be
mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date with out requiring
that this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) affected by
any payments made on any Distribution Date or Redemption Date shall be binding
upon all
C-5
<PAGE>
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the remaining unpaid principal amount of this Note on a
Distribution Date or Redemption Date, then the Indenture Trustee, in the name of
and on behalf of the Issuer, will notify the Person who was the registered
Holder hereof as of the Record Date preceding such Distribution Date or
Redemption Date by notice mailed within five days of such Distribution Date or
Redemption Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note, at the Corporate Trust Office of the
Indenture Trustee or at the office of the Indenture Trustee's agent appointed
for such purposes located in The City of New York.
As provided in the Indenture, the Notes are subject to redemption in
whole, but not in part, on any Distribution Date as of which the Pool Balance is
less than or equal to 10% of the Original Pool Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or Agency
designated by the Issuer pursuant to the Indenture. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
by accepting
C-6
<PAGE>
the benefits of the Indenture and such Note that such Noteholder or Note Owner
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
Federal or state bankruptcy or similar law.
The Issuer has entered into the Indenture, and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness secured by
the Collateral. Each Noteholder, by acceptance of a Note (and each Note Owner by
acceptance of a beneficial interest in a Note), agrees to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and the Insurer and any agent of the
Issuer, the Indenture Trustee or the Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Indenture
Trustee, the Insurer nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Principal Amount of the Notes. The
Indenture also contains provisions permitting the Insurer and the Holders of
Notes representing specified percentages of the Outstanding Principal Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Insurer
or Holder of this Note (or any one of more Predecessor Notes) shall be
conclusive and binding upon such Insurer or Holder and upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof or
in ex change hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of Holders of the Notes issued thereunder and with the
consent of the Insurer.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
C-7
<PAGE>
This Note and the Indenture shall, in accordance with Section 5-1401
of the General Obligations Law of the State of New York, be construed in
accordance with the laws of the State of New York without regard to its conflict
of law provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
C-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: */
Signature Guaranteed:
*/
*/NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
C-9
<PAGE>
EXHIBIT D
FORM OF CLASS A-3 NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS RE QUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT
INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ANRC AUTO OWNER TRUST ______
____% ASSET-BACKED NOTE, CLASS A-3
REGISTERED $________________
No. 1 CUSIP NO. ______________
ANRC Auto Owner Trust ______, a business trust organized and
existing under the laws of the State of Delaware (the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of _______ ($_________), payable to the extent described in the
Indenture and the Sale and Servicing Agreement referred to on the reverse hereof
on each Distribution Date; provided that the entire unpaid principal amount of
this Note shall be payable on the earlier of the Distribution Date occurring in
______ (the "Class A-3 Final Scheduled Distribution Date") and the Redemption
Date, if any, selected pursuant to the Indenture.
D-1
<PAGE>
No payments of principal of the class A-3 Notes shall be made until the
principal amount of the Class A-1 and Class A-2 Notes have been reduced to zero.
The Issuer will pay interest on this Note at the Class A-3 Note Rate
shown above on each Distribution Date until the principal of this Note is paid
or made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), or on the Closing Date in
the case of the first Distribution Date, subject to certain limitations
contained in the Indenture. Interest on this Note will accrue for each
Distribution Date during the period (the "Interest Accrual Period" with respect
to such Distribution Date) from and including the Distribution Date immediately
preceding such Distribution Date (or, in the case of the first Distribution
Date, from and including the Closing Date) to but excluding such Distribution
Date. The Issuer shall pay interest on overdue installments of interest at the
Class A-3 Note Rate to the extent lawful. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Insurance Policy") issued by MBIA Insurance Corporation
(the "Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payment of the Note Interest Distributable Amount on each Distribution Date and
the Guaranteed Note Principal Amount of the Notes all as more fully set forth in
the Insurance Policy.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
D-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by an Authorized Officer, as set forth below.
Date: _______________, ____ ANRC AUTO OWNER TRUST
By:____________________________________,
not in its individual capacity, but
solely as Owner Trustee
By:_____________________________________
Name:
Title:
D-3
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
_______________________________________,
as Indenture Trustee
By:
Authorized Signatory
D-4
<PAGE>
[REVERSE OF CLASS A-3 NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its "____% Asset-Backed Notes, Class A-3" (the "Class A-3
Notes"), all issued under the Indenture, dated as of ______________, ____ (as
amended, supplemented or otherwise modified and in effect from time to time, the
"Indenture"), between the Issuer and, as indenture trustee (the "Indenture
Trustee"), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Insurer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended, and if not defined therein, in the Sale and Servicing
Agreement (as defined in the Indenture).
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes (collectively, the "Notes") are and will be equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture.
Principal payable on the Class A-3 Notes will be paid on each
Distribution Date in the amount specified in the Indenture and the Sale and
Servicing Agreement. As described above, the entire unpaid principal amount of
this Note will be pay able on the earlier of the Class A-3 Final Scheduled
Distribution Date and the Redemption Date, if any, selected pursuant to the
Indenture. Notwithstanding the foregoing, under certain circumstances, the
entire unpaid principal amount of the Class A-3 Notes shall be due and payable
following the occurrence and continuance of an Event of Default, as described
in the Indenture. All principal payments on the Class A-3 Notes shall be made
pro rata to the Class A-3 Noteholders entitled thereto.
Payments of principal and interest on this Note due and payable on
each Distribution Date or Redemption Date shall be made by check mailed to the
Person whose name appears as the registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on the
related Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee. Such checks shall be
mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date with out requiring
that this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) affected by
any payments made on any Distribution Date or Redemption Date shall be binding
upon all
D-5
<PAGE>
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the remaining unpaid principal amount of this Note on a
Distribution Date or Redemption Date, then the Indenture Trustee, in the name of
and on behalf of the Issuer, will notify the Person who was the registered
Holder hereof as of the Record Date preceding such Distribution Date or
Redemption Date by notice mailed within five days of such Distribution Date or
Redemption Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Corporate Trust Office of the
Indenture Trustee or at the office of the Indenture Trustee's agent appointed
for such purposes located in The City of New York.
As provided in the Indenture, the Notes are subject to redemption in
whole, but not in part, on any Distribution Date as of which the Pool Balance is
less than or equal to 10% of the Original Pool Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or Agency
designated by the Issuer pursuant to the Indenture. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
by accepting
D-6
<PAGE>
the benefits of the Indenture and such Note that such Noteholder or Note Owner
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
Federal or state bankruptcy or similar law.
The Issuer has entered into the Indenture, and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness secured by
the Collateral. Each Noteholder, by acceptance of a Note (and each Note Owner by
acceptance of a beneficial interest in a Note), agrees to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and the Insurer and any agent of the
Issuer, the Indenture Trustee or the Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Indenture
Trustee, the Insurer nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Principal Amount of the Notes. The
Indenture also contains provisions permitting the Insurer and the Holders of
Notes representing specified percentages of the Outstanding Principal Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Insurer
or Holder of this Note (or any one of more Predecessor Notes) shall be
conclusive and binding upon such Insurer or Holder and upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof or
in ex change hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of Holders of the Notes issued thereunder and with the
consent of the Insurer.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
D-7
<PAGE>
This Note and the Indenture shall, in accordance with Section 5-1401
of the General Obligations Law of the State of New York, be construed in
accordance with the laws of the State of New York without regard to its conflict
of law provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
D-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: */
Signature Guaranteed:
*/
*/NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
D-9
<PAGE>
EXHIBIT E
FORM OF CLASS A-4 NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT
INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ANRC AUTO OWNER TRUST _______
____% ASSET-BACKED NOTE, CLASS A-4
REGISTERED $______________
No. 1 CUSIP NO. ____________
ANRC Auto Owner Trust ______, a business trust organized and
existing under the laws of the State of Delaware (the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of __________ ($__________), payable to the extent described in
the Indenture and the Sale and Servicing Agreement referred to on the reverse
hereof on each Distribution Date; provided that the entire unpaid principal
amount of this Note shall be payable on the earlier of the Distribution Date
occurring in _______ (the "Class A-4 Final Scheduled Distribution Date") and the
Redemption Date, if any, selected pursuant to the Indenture. No payments of
principal of the Class A-4 Notes shall be made until the
E-1
<PAGE>
principal amount of the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes has been reduced to zero.
The Issuer will pay interest on this Note at the Class A-4 Note Rate
shown above on each Distribution Date until the principal of this Note is paid
or made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), or on the Closing Date in
the case of the first Distribution Date, subject to certain limitations
contained in the Indenture. Interest on this Note will accrue for each
Distribution Date during the period (the "Interest Accrual Period" with respect
to such Distribution Date) from and including the Distribution Date immediately
preceding such Distribution Date (or, in the case of the first Distribution
Date, from and including the Closing Date) to but excluding such Distribution
Date. The Issuer shall pay interest on overdue installments of interest at the
Class A-4 Note Rate to the extent lawful. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Insurance Policy") issued by MBIA Insurance Corporation
(the "Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payment of the Note Interest Distributable Amount on each Distribution Date and
the Guaranteed Note Principal Amount of the Notes all as more fully set forth in
the Insurance Policy.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
E-2
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: */
Signature Guaranteed:
*/
*/NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
E-3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by an Authorized Officer, as set forth below.
Date: ____________, ____ ANRC AUTO OWNER TRUST
By:____________________________________,
not in its individual capacity, but
solely as Owner Trustee
By:_____________________________________
Name:
Title:
E-4
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
_______________________________________,
as Indenture Trustee
By:
Authorized Signatory
E-5
<PAGE>
[REVERSE OF CLASS A-4 NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its "____% Asset-Backed Notes, Class A-4" (the "Class A-4 Notes"),
all issued under the Indenture, dated as of ______________, ____ (as amended,
supplemented or otherwise modified and in effect from time to time, the
"Indenture"), between the Issuer and ________, as indenture trustee (the
"Indenture Trustee"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Insurer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended, and if not defined therein, in the
Sale and Servicing Agreement (as defined in the Indenture).
The Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and the Class
A- 4 Notes (collectively, the "Notes") are and will be equally and ratably
secured by the collateral pledged as security therefor as provided in the
Indenture.
Principal payable on the Class A-4 Notes will be paid on each
Distribution Date in the amount specified in the Indenture and the Sale and
Servicing Agreement. As described above, the entire unpaid principal amount of
this Note will be pay able on the earlier of the Class A-4 Final Scheduled
Distribution Date and the Redemption Date, if any, selected pursuant to the
Indenture. Notwithstanding the foregoing, under certain circumstances, the
entire unpaid principal amount of the Class A-4 Notes shall be due and payable
following the occurrence and continuance of an Event of Default, as described
in the Indenture. All principal payments on the Class A-4 Notes shall be made
pro rata to the Class A-4 Noteholders entitled thereto.
Payments of principal and interest on this Note due and payable on
each Distribution Date or Redemption Date shall be made by check mailed to the
Person whose name appears as the registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on the
related Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee. Such checks shall be
mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date with out requiring
that this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) affected by
any payments made on any Distribution Date or Redemption Date shall be binding
upon all
E-6
<PAGE>
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the remaining unpaid principal amount of this Note on a
Distribution Date or Redemption Date, then the Indenture Trustee, in the name of
and on behalf of the Issuer, will notify the Person who was the registered
Holder hereof as of the Record Date preceding such Distribution Date or
Redemption Date by notice mailed within five days of such Distribution Date or
Redemption Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Corporate Trust Office of the
Indenture Trustee or at the office of the Indenture Trustee's agent appointed
for such purposes located in The City of New York.
As provided in the Indenture, the Notes are subject to redemption in
whole, but not in part, on any Distribution Date as of which the Pool Balance is
less than or equal to 10% of the Original Pool Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or Agency
designated by the Issuer pursuant to the Indenture. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
by accepting
E-7
<PAGE>
the benefits of the Indenture and such Note that such Noteholder or Note Owner
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
Federal or state bankruptcy or similar law.
The Issuer has entered into the Indenture, and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness secured by
the Collateral. Each Noteholder, by acceptance of a Note (and each Note Owner by
acceptance of a beneficial interest in a Note), agrees to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and the Insurer and any agent of the
Issuer, the Indenture Trustee or the Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Indenture
Trustee, the Insurer nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Principal Amount of the Notes. The
Indenture also contains provisions permitting the Insurer and the Holders of
Notes representing specified percentages of the Outstanding Principal Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Insurer
or Holder of this Note (or any one of more Predecessor Notes) shall be
conclusive and binding upon such Insurer or Holder and upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof or
in ex change hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of Holders of the Notes issued thereunder and with the
consent of the Insurer.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
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<PAGE>
This Note and the Indenture shall, in accordance with Section 5-1401
of the General Obligations Law of the State of New York, be construed in
accordance with the laws of the State of New York without regard to its conflict
of law provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
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<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: */
Signature Guaranteed:
*/
*/NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
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<PAGE>
================================================================================
SALE AND SERVICING AGREEMENT
by and among
ANRC AUTO OWNER TRUST 1999-A,
as Issuer,
AUTONATION RECEIVABLES CORPORATION,
as Seller,
AUTONATION FINANCIAL SERVICES CORP.,
as Servicer and Custodian
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Dated as of October 1, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Usage of Terms.................................................23
SECTION 1.03. Section References.............................................24
SECTION 1.04. Calculations...................................................24
SECTION 1.05. Accounting Terms...............................................24
ARTICLE II
CONVEYANCE OF CONTRACTS;
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 2.01. Conveyance of Contracts........................................25
SECTION 2.02. Representations and Warranties of the Seller ..................28
SECTION 2.03. Repurchase of Certain Contracts................................39
SECTION 2.04. Custody of Contract Files......................................40
SECTION 2.05. Duties of Servicer Relating to the Contracts..................44
SECTION 2.06. Instructions; Authority to Act.................................46
SECTION 2.07. Indemnification................................................46
SECTION 2.08. Effective Period and Termination...............................47
SECTION 2.09. Nonpetition Covenant...........................................47
SECTION 2.10. Collecting Title Documents Not Delivered at the
Closing Date...................................................48
ARTICLE III
ADMINISTRATION AND SERVICING OF CONTRACTS
SECTION 3.01. Duties of Servicer.............................................49
SECTION 3.02. Collection of Contract Payments................................52
SECTION 3.03. Realization upon Defaulted Contracts...........................52
SECTION 3.04. Maintenance of Security Interests in Financed
Vehicles.......................................................53
SECTION 3.05. Covenants, Representations and Warranties of
Servicer ......................................................54
SECTION 3.06. Purchase of Contracts upon Breach by Servicer;
Third Party Claims.............................................57
SECTION 3.07. Servicing Compensation.........................................57
SECTION 3.08. Reporting by the Servicer......................................58
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SECTION 3.09. Annual Statement as to Compliance..............................60
SECTION 3.10. Annual Independent Certified Public Accountant's
Report.........................................................61
SECTION 3.11. Access to Certain Documentation and Information
Regarding Contracts............................................61
SECTION 3.12. Indemnification................................................62
SECTION 3.13. Reports to Noteholders and the Rating Agencies.................62
ARTICLE IV
DISTRIBUTIONS; SPREAD ACCOUNT;
STATEMENTS TO NOTEHOLDERS
SECTION 4.01. Establishment of Trust Accounts................................63
SECTION 4.02. Collections; Realization upon Insurance Policy; Net
Deposits; Transfers to Payment Account........................66
SECTION 4.03. Distributions..................................................67
SECTION 4.04. Spread Account.................................................70
SECTION 4.05. Statements to Noteholders......................................73
SECTION 4.06 Effects of Payments by the Insurer; Subrogation................75
ARTICLE V
THE SELLER
SECTION 5.01. Liability of Seller; Indemnities...............................76
SECTION 5.02. Merger or Consolidation of, or Assumption of the
Obligations of Seller; Certain Limitations.....................77
SECTION 5.03. Limitation on Liability of Seller and Others ..................78
SECTION 5.04. Seller Not to Resign...........................................78
SECTION 5.05. Seller May Own Notes...........................................78
ARTICLE VI
THE SERVICER
SECTION 6.01. Liability of Servicer; Indemnities.............................79
SECTION 6.02. Corporate Existence; Status as Servicer; Merger................80
SECTION 6.03. Performance of Obligations.....................................80
SECTION 6.04. Servicer Not to Resign; Assignment.............................81
SECTION 6.05. Limitation on Liability of Servicer and Others.................82
ARTICLE VII
SERVICER DEFAULT
SECTION 7.01. Servicer Defaults..............................................83
SECTION 7.02. Trustee to Act; Appointment of Successor.......................86
SECTION 7.03. Notification to Noteholders....................................87
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SECTION 7.04. Waiver of Past Defaults........................................87
SECTION 7.05. Insurer Direction of Insolvency Proceedings....................87
ARTICLE VIII
TERMINATION
SECTION 8.01. Optional Purchase of All Contracts; Satisfaction and
Discharge of The Indenture .............................89
SECTION 8.02. Termination of this Agreement..................................89
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendment......................................................90
SECTION 9.02. Protection of Title to Trust...................................91
SECTION 9.03. Governing Law..................................................94
SECTION 9.04. Notices........................................................94
SECTION 9.05. Severability of Provisions.....................................95
SECTION 9.06. Assignment.....................................................95
SECTION 9.07. Third Party Beneficiaries......................................96
SECTION 9.08. Certain Matters Relating to the Insurer........................96
SECTION 9.09. Headings.......................................................97
SECTION 9.10. Assignment by Issuer...........................................97
SECTION 9.11. Limitation of Liability of Owner Trustee.......................97
iii
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iv
<PAGE>
EXHIBITS
Exhibit A -- List of Contracts
Exhibit B -- Location and Account Numbers of Trust Accounts
Exhibit C -- Distribution Date Statement
v
<PAGE>
This SALE AND SERVICING AGREEMENT, dated as of October 1, 1999 (as
amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), is between ANRC AUTO OWNER TRUST 1999-A, a Delaware business
trust (the "Issuer" or the "Trust"), AUTONATION RECEIVABLES CORPORATION, a
Delaware corporation (together with its permitted successors and assigns, the
"Seller"), AUTONATION FINANCIAL SERVICES CORP., a Delaware corporation, as
Servicer (together with its permitted successors and assigns, the "Servicer")
and as Custodian (together with its permitted successors and assigns, the
"Custodian") and THE CHASE MANHATTAN BANK, a New York banking corporation, as
the Indenture Trustee on behalf of the Noteholders (together with its permitted
successors and assigns in such capacity, the "Indenture Trustee").
In consideration of the premises and the mutual covenants herein
contained, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
"Additional Servicing Fee" shall mean the excess, if any, of (i) the
servicing fee of any Successor Servicer (other than the Indenture Trustee, in
its capacity as Successor Servicer), which has been approved in writing by the
Insurer over (ii) the Servicing Fee.
"Affiliate" of any specified Person shall mean any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person shall mean 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" or
"controlled" have meanings correlative to the foregoing.
"Amount Financed" shall mean, with respect to a Contract, the
aggregate amount advanced by the Originator under such Contract toward the
<PAGE>
purchase price of the related Financed Vehicle and related costs, including
amounts advanced in respect of accessories, extended service or warranty
contracts and other items customarily financed as part of retail automobile
installment sales contracts, excluding any collision and/or comprehensive
insurance premiums.
"APR" of a Contract shall mean the annual percentage rate used to
determine the total interest expected to be charged over the term of a Contract
as of its inception, as shown on such Contract.
"AutoNation Financial Services" shall mean AutoNation Financial
Services Corp. and its successors and assigns.
"Available Funds" shall mean, with respect to any Distribution Date
and the related Collection Period, the sum of (i) all payments of Monthly
Scheduled Payments, all partial prepayments, all Full Prepayments (pursuant to
clause (a) in the definition thereof), Net Liquidation Proceeds and Net
Insurance Proceeds in each case, collected with respect to the Contracts during
such Collection Period; (ii) the aggregate Purchase Amount for Purchased
Contracts deposited in or credited to the Collection Account pursuant to Section
4.02(a) on the Business Day preceding the Servicer Report Date next preceding
such Distribution Date; and (iii) income from Eligible Investments of funds on
deposit in the Trust Accounts.
"Basic Documents" shall have the meaning specified in the Indenture.
"Business Day" shall mean any day other than (i) a Saturday or a
Sunday, (ii) a day on which the Insurer is closed or (iii) a day on which
commercial banking institutions or savings associations located in New York, New
York or in the city in which the Owner Trustee Corporate Trust Office or the
Corporate Trust Office is located are authorized or obligated by law,
regulation, executive order or governmental decree to be closed.
"Class" shall mean all Notes whose form is identical except for
variation in denomination, principal amount or owner.
"Class A-1 Final Scheduled Distribution Date" shall mean the
Distribution Date occurring in October 2000.
"Class A-1 Note" shall mean any Class A-1 Note in the form attached
to the Indenture as Exhibit B.
"Class A-1 Rate" shall mean 6.16625% per annum.
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<PAGE>
"Class A-2 Final Scheduled Distribution Date" shall mean the
Distribution Date occurring in November 2002.
"Class A-2 Note" shall mean any Class A-2 Note in the form attached
to the Indenture as Exhibit C.
"Class A-2 Rate" shall mean 6.54% per annum.
"Class A-3 Final Scheduled Distribution Date" shall mean the
Distribution Date occurring in December 2003.
"Class A-3 Note" shall mean any Class A-3 Note in the form attached
to the Indenture as Exhibit D.
"Class A-3 Rate" shall mean 6.75% per annum.
"Class A-4 Final Scheduled Distribution Date" shall mean the
Distribution Date occurring in April 2006.
"Class A-4 Note" shall mean any Class A-4 Note in the form attached
to the Indenture as Exhibit E.
"Class A-4 Rate" shall mean 6.94% per annum.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" shall mean October 22, 1999.
"Collection Account" shall mean the account established and
maintained as such pursuant to Section 4.01.
"Collection Period" shall mean, with respect to any Distribution
Date, the calendar month immediately preceding the calendar month in which such
Distribution Date occurs (or, in the case of the first Collection Period, the
period of time from but excluding the Cut-Off Date through the last day of the
calendar month immediately preceding the month in which the first Distribution
Date occurs).
"Collection Policy" shall mean the practices and procedures employed
by the Servicer in its servicing of motor vehicle retail installment contracts
as of the Closing Date and which servicing procedures have been certified by a
Servicing Officer and delivered to the Insurer on the Closing Date, as such
Collection
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<PAGE>
Policy may be amended in accordance with Section 3.05 hereof, and the practice
and procedures of any Successor Servicer and acceptable to the Insurer.
"Contract" shall mean each motor vehicle retail installment sales
contract and all proceeds thereof and payments thereunder conveyed by the Seller
to the Issuer pursuant to this Agreement, which contract or agreement has been
executed by an Obligor and pursuant to which such Obligor purchased or financed
the Financed Vehicle described therein, agreed to pay the deferred purchase
price (i.e., the purchase price net of any down payment) or amount borrowed,
together with interest, as therein provided in connection with such purchase or
loan, granted a security interest in such Financed Vehicle, and undertook to
perform certain other obligations as specified in such contract or agreement.
Each Contract shall have been originated by the Originator from application
referrals received from a Dealer and subsequently conveyed by the Originator to
the Seller pursuant to the Receivables Purchase Agreement.
"Contract Documents" shall mean, with respect to each Contract, (a)
the original Contract and the original credit application fully executed by the
Obligor thereunder; (b) either (i) the original Title Document for the related
Financed Vehicle or a duplicate copy thereof issued or certified by the
Registrar of Titles which issued the original thereof, together with evidence of
perfection of the security interest in the related Financed Vehicle granted by
such Contract, as reasonably determined by the Servicer to be permitted or
required to perfect such security interest under the laws of the applicable
jurisdiction, or (ii) written evidence that the Title Document for such Financed
Vehicle showing AutoNation Financial Services as first lienholder has been
applied for; (c) any agreement(s) modifying the Contract (including, without
limitation, any extension agreement(s)); (d) a signed agreement by an Obligor to
provide insurance with AutoNation Financial Services listed as loss payee; (e) a
copy of the contract for any supplemental warranty purchased with respect to the
Financed Vehicle; (f) acceptable vehicle valuation documentation consisting of
the dealer invoice or sticker for new cars and reference to the most recently
published National Automobile Dealers Association Used Car Price Guide or Kelly
Blue Book, based on year, make and model of the related Financed Vehicle for
used cars and (g) any documents specifically relating to the Obligor or the
Financed Vehicle. The documents referred to above, other than the Contracts and
the Title Documents may be maintained in microfiche or electronic form.
"Contract Files" shall mean all papers and computerized records
customarily kept by the Servicer or its agents in servicing contracts and loans
comparable to the Contracts.
4
<PAGE>
"Contract Number" shall mean, with respect to any Contract included
in the Trust, the number assigned to such Contract by the Servicer, which number
is set forth in the related Schedule of Contracts.
"Controlling Party" shall have the meaning set forth in the
Indenture.
"Conveyed Property" shall have the meaning assigned to such term in
Section 2.01(a).
"Corporate Trust Office" shall mean the principal office of the
Indenture Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of the execution of this
Agreement is located at 450 West 33rd Street, 14th Floor, New York, New York
10001, Attention: Capital Markets Fiduciary Services: ANRC Auto Owner Trust
1999-A; or at such other address as the Indenture Trustee may designate from
time to time by notice to the Noteholders, the Insurer, the Servicer and the
Seller.
"Cumulative Net Loss Ratio" shall have the meaning set forth in the
Insurance Agreement.
"Custodial Agreement" shall mean the Custodial Agreement, dated as
of October 1, 1999, by and among the Originator, the Servicer, the Custodian,
the Issuer, World Omni Financial Corp. and the Indenture Trustee, as the same
may from time to time be amended, supplemented or otherwise modified and in
effect.
"Custodian" shall mean AutoNation Financial Services until such
time, if any, as a Successor Custodian is appointed and thereafter shall mean
such Successor Custodian.
"Cut-Off Date" shall mean September 30, 1999.
"Default" shall mean any occurrence which with the giving of notice
or the lapse of time or both would become a Servicer Default.
"Dealer" shall mean each automotive dealership which sold a Financed
Vehicle, which dealership referred the application in respect of the related
Contract to AutoNation Financial Services.
"Defaulted Contract" shall mean, with respect to any Collection
Period, a Contract, (i) which, at the end of such Collection Period, is deemed
uncollectible by the Servicer in accordance with its customary procedures; (ii)
in respect of which all amounts more than one hundred and twenty (120) days past
due
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<PAGE>
represent in the aggregate $40 or more; (iii) in respect of which the related
Financed Vehicle has been repossessed and liquidated; or (iv) in respect of
which the Servicer has repossessed and held the related Financed Vehicle in its
repossession inventory for 91 days or more, whichever occurs first.
"Deficiency Amount" shall mean, with regard to any Distribution
Date, the sum of (i) the excess, if any, of (a) the Note Interest Distributable
Amount with respect to all Classes of Notes for such Distribution Date over (b)
the sum of (x) the Available Funds for such Distribution Date (after giving
effect to distributions pursuant to clauses (i), (ii) and (iii) of Section
4.03(a) for such Distribution Date) and (y) the amount to be on deposit in the
Spread Account for such Distribution Date (after giving effect to any
withdrawals to satisfy amounts due in respect of clauses (i) through (iii) of
Section 4.03(a) for such Distribution Date) and (ii) the Guaranteed Note
Principal Amount for such Distribution Date.
"Deficiency Notice" shall mean, with respect to any Distribution
Date, the notice delivered pursuant to Section 4.02(c) by the Servicer to the
Indenture Trustee, with a copy to the Insurer.
"Definitive Notes" shall mean Notes issued in fully registered,
certificated form to Noteholders.
"Delivery" when used with respect to Trust Account Property shall
mean: (a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC and are susceptible of
physical delivery, transfer thereof to the Indenture Trustee by physical
delivery to the Indenture Trustee endorsed to, or registered in the name of,
the Indenture Trustee or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102 of the UCC) transfer thereof (i) by
delivery of such certificated security endorsed to, or registered in the name of
the Indenture Trustee or (ii) by delivery thereof to a "clearing corporation"
(as defined in Section 8-102 of the UCC) and the making by such clearing
corporation of appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the appropriate securities
account of the Indenture Trustee by the amount of such certificated security and
the identification by the clearing corporation of the certificated securities
for the sole and exclusive account of the Indenture Trustee (all of the
foregoing, "Physical Property"), and, in any event, any such Physical Property
in registered form shall be in the name of the Indenture Trustee; and such
additional or alternative procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any
6
<PAGE>
such Trust Account Property to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or the
interpretation thereof;
(b) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to federal book-entry regulations, the following procedures, all
in accordance with applicable law, including applicable federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal Reserve
Bank by a securities intermediary that is also a "depository" pursuant to
applicable federal regulations; the making by such securities intermediary of
entries in its books and records crediting such Trust Account Property to the
Indenture Trustee's security account at the securities intermediary and
identifying such book-entry security held through the Federal Reserve System
pursuant to federal book-entry regulations as belonging to the Indenture
Trustee; and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee, consistent with changes in applicable law or
regulations or the interpretation thereof; and
(c) with respect to any uncertificated security under Article 8 of
the UCC and that is not governed by clause (b) above, registration on the books
and records of the issuer thereof in the name of the Indenture Trustee or its
nominee or custodian who either (i) becomes the registered owner on behalf of
the Indenture Trustee or (ii) having previously become the registered owner,
acknowledges that it holds such uncertificated security for the Indenture
Trustee.
"Depositor" shall mean the Seller in its capacity as Depositor under
the Owner Trust Agreement, and its successors.
"Distribution Account" means the Note Distribution Account.
"Distribution Date" shall mean the 15th day of each month or if such
date shall not be a Business Day, the following Business Day, commencing on
November 15, 1999.
"Distribution Date Statement" shall have the meaning specified in
Section 3.08(a).
"Due Date" shall mean, as to any Contract, the date upon which a
Monthly Scheduled Payment is due.
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"Eligible Account" shall mean (i) a segregated trust account that is
either (a) maintained by the Indenture Trustee, (b) maintained with a depository
institution or trust company organized under the laws of the United States of
America or any state thereof the commercial paper or other short-term debt
obligations of which have credit ratings from Standard & Poor's at least equal
to "A-1+" and from Moody's equal to "P-1," which account is fully insured up to
applicable limits by the Federal Deposit Insurance Corporation or (c) maintained
with a depository institution organized under the laws of the United States of
America or any state thereof acceptable to the Insurer, as evidenced by a letter
from the Insurer to that effect or (ii) a general ledger account or deposit
account at a federal or state chartered depository institution acceptable to the
Insurer, as evidenced by a letter from the Insurer to that effect.
"Eligible Investments" shall mean any one or more of the following
obligations or securities, all of which shall be denominated in United States
dollars:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America or any
agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America
and, to the extent, at the time of investment, acceptable to the Insurer and
each Rating Agency for securities having a rating equivalent to the rating of
the Notes at the Closing Date, the direct obligations of, or obligations fully
guaranteed by, the Federal Home Loan Mortgage Corporation and the Federal
National Mortgage Association;
(b) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Indenture Trustee or the Owner
Trustee) incorporated under the laws of the United States of America or any
State and subject to supervision and examination by Federal and/or State banking
authorities, so long as at the time of such investment or contractual commitment
providing for such investment, the short-term, unsecured debt obligations of
such depository institution or trust company have credit ratings from Standard &
Poor's at least equal to "A-1+" and from Moody's at least equal to "P-1";
provided that any such demand and time deposits shall be fully insured by the
Federal Deposit Insurance Corporation and any such certificates of deposit must
be secured at all times by collateral described in clause (a) above, such
collateral must be held by a third party and the Indenture Trustee must have a
perfected first priority security interest in such collateral.
(c) repurchase obligations with a term not to exceed 30 days and
with respect to (i) any security described in clause (a) above or (ii) any other
security issued or guaranteed as to timely payment of principal and interest by
an agency or
8
<PAGE>
instrumentality of the United States of America, in either case entered into
with any depository institution or trust company (including the Indenture
Trustee and the Owner Trustee), acting as principal, described in clause (b)
above; provided, however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (a) above and must
(x) be marked-to-market weekly at current market price plus accrued interest,
(y) pursuant to such valuation, be equal at all times to 105% of the cash
transferred by the Indenture Trustee in exchange for such collateral and (z) be
delivered to the Indenture Trustee or, if the Indenture Trustee is supplying the
collateral, an agent for the Indenture Trustee, in such a manner as to
accomplish perfection of a security interest in the collateral by possession of
certificated securities;
(d) commercial paper having the highest rating by Standard & Poor's
and Moody's at the time of such investment;
(e) investments in money market funds or money market mutual funds
registered under the Investment Company Act of 1940, as amended, whose shares
are registered under the Securities Act of 1933, having a rating from Standard &
Poor's and Moody's in the highest investment category granted thereby, including
funds for which the Indenture Trustee, the Owner Trustee or any of their
respective Affiliates is investment manager or advisor; and
(f) such other obligations or securities acceptable to the Insurer,
as evidenced by a letter from the Insurer to the Indenture Trustee (which
acceptability may be revoked at any time by the Insurer).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fee Letter" shall mean the Fee Letter, dated as of October 22,
1999, between AutoNation Inc. and the Indenture Trustee, as such agreement may
from time to time be amended, supplemented or otherwise modified and in effect.
"Final Scheduled Distribution Date" shall mean with respect to the
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 or
the Class A-4 Final Scheduled Distribution Date, as the case may be.
"Financed Vehicle" shall mean, as to any Contract, a new or used
automobile and/or light-duty truck, together with all accessions thereto,
securing the related Obligor's indebtedness under such Contract.
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"Fiscal Agent" shall have the meaning set forth in the Insurance
Policy.
"Full Prepayment" shall mean, with respect to any Contract, any of
the following: (a) payment by or on behalf of the Obligor of the total amount
required by the terms of such Contract to be paid thereunder, which amount shall
be at least equal to the sum of (i) 100% of the Principal Balance of such
Contract, (ii) unpaid interest accrued thereon to the date of such payment at
the APR and (iii) any overdue amounts; or (b) payment by the Seller to the
Indenture Trustee of the Purchase Amount of such Contract in connection with the
purchase of such Contract pursuant to Section 2.03, or payment by the Servicer
of the Purchase Amount of such Contract in connection with the purchase of such
Contract pursuant to Section 3.06 or the purchase of all Contracts pursuant to
Section 8.01.
"Guaranteed Note Principal Amount" shall mean with regard to any
Distribution Date, the lesser of (a) the excess, if any, of (i) the Note
Principal Distributable Amount for such Distribution Date over (ii) the sum of
(x) the Avail able Funds for such Distribution Date (after giving effect to
distributions pursuant to clauses (i), (ii), (iii) and (iv) of Section 4.03(a)
for such Distribution Date) and (y) the amount to be on deposit in the Spread
Account for such Distribution Date (after giving effect to any withdrawals to
pay amounts pursuant to clauses (i) through (iv) of Section 4.03(a) for such
Distribution Date) and (b) the excess, if any, of (i) the Outstanding Principal
Amount of the Notes for such Distribution Date (after giving effect to all
payments of principal of the Notes on such Distribution Date, other than from an
Insured Payment) over (ii) the sum of (x) the Pool Balance as of the last day of
the preceding Collection Period and (y) the amount to be on deposit in the
Spread Account (after giving effect to any withdrawals to pay amounts pursuant
to clauses (i) through (vi) of Section 4.03(a) for such Distribution Date);
provided, however, on the Final Scheduled Distribution Date for such Class of
Notes, the Guaranteed Note Principal Amount shall be at least equal to the
Outstanding Principal Amount of such Class of Notes on such Final Scheduled
Distribution Date (after giving effect to all distributions of principal on such
Final Scheduled Distribution Date other than from an Insured Payment).
"Indenture" shall mean the Indenture, dated as of October 1, 1999,
between the Issuer and the Indenture Trustee, as the same may from time to time
be amended, supplemented or otherwise modified and in effect.
"Indenture Trustee" shall mean The Chase Manhattan Bank, a New York
banking corporation, as the Indenture Trustee under the Indenture, its
successors in interest and any successor Indenture Trustee under the Indenture.
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"Indenture Trustee Fee" shall equal the amount specified in the Fee
Letter.
"Insolvency Proceeding" shall have the meaning specified in Section
7.05.
"Insurance Agreement" shall mean the Insurance Agreement, dated as
of October 1, 1999, by and among the Insurer, the Administrator, the Seller, the
Servicer, the Custodian, the Originator, the Indenture Trustee, the Owner
Trustee and the Issuer, as the same may from time to time be amended,
supplemented or otherwise modified and in effect.
"Insurance Policy" shall mean the note guaranty insurance policy for
the Notes, number 30521, dated October 22, 1999 and issued by the Insurer in
favor of the Indenture Trustee, guaranteeing payment of any Insured Payment, as
the same may be amended, supplemented or otherwise modified and in effect.
"Insurance Premium" shall have the meaning specified in the
Insurance Agreement.
"Insured Payment" shall mean (i) as of any Distribution Date, the
Deficiency Amount and (ii) the Preference Amount.
"Insurer" shall mean MBIA Insurance Corporation, a New York stock
insurance company, and its permitted successors and assigns.
"Insurer Default" shall mean the occurrence and continuance of any
of the following:
(i) the Insurer shall have failed to make a payment required to be
made under the Insurance Policy in accordance with its terms;
(ii) the Insurer shall have (a) filed a petition or commenced any
case or proceeding in respect of the Insurer under any provision or
chapter of the United States Bankruptcy Code or any other similar federal
or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization, (b) made a general assignment for the
benefit of its creditors or (c) had an order for relief entered against it
under the United States Bankruptcy Code or any other similar federal or
state law relating to insolvency, bankruptcy, rehabilitation, liquidation
or reorganization which is final and nonappealable; or
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(iii) 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 (a) appointing a
custodian, trustee, agent or receiver for the Insurer or for all or any
material portion of its property or (b) authorizing the taking of
possession by a custodian, trustee, agent or receiver of the Insurer (or
the taking of possession of all or any material portion of the property of
the Insurer).
"Interest Accrual Period" shall mean, with respect to any
Distribution Date, the period from and including the Distribution Date
immediately preceding such Distribution Date (or, in the case of the first
Distribution Date, from and including the Closing Date) to but excluding such
Distribution Date.
"Issuer" shall mean ANRC Auto Owner Trust 1999-A, a Delaware
business trust, and its permitted successors and assigns.
"Lien" shall mean a security interest, lien, charge, pledge, equity
or encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Contract by operation of law.
"Liquidation Expenses" shall mean reasonable out-of-pocket expenses,
other than any overhead expenses, incurred by the Servicer in connection with
the collection and realization of the full amounts due under any Defaulted
Contract (including the attempted liquidation of a Contract which is brought
current and is no longer in default during such attempted liquidation) and the
repossession and sale of any property acquired in respect thereof which are not
recoverable as proceeds paid by any insurer under any type of motor vehicle
insurance policy related to the Contract. Liquidation Expenses shall not include
any late fees or other administrative fees and expenses or similar charges
collected with respect to a Contract.
"Maturity Date" shall mean, with respect to any Contract, the date
on which the last scheduled payment of such Contract shall be due and payable as
such date may be extended pursuant to Section 3.02.
"Monthly Scheduled Payment" shall mean, with respect to any
Contract, in any given month, the amount of the scheduled payment of principal
and interest payable by the Obligor of such Contract for such month in
accordance with the terms thereof, exclusive of any charges which represent late
payment charges or extension fees.
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"Moody's" shall mean Moody's Investors Service, Inc., and its
permitted successors and assigns.
"Net Insurance Proceeds" shall mean proceeds paid by any insurer
under a comprehensive and collision insurance policy related to a Contract
(other than funds used for the repair of the related Financed Vehicle or
proceeds released to the Obligor in excess of the Principal Balance of the
Contract, and all accrued interest thereon and all other amounts due
thereunder), after reimbursement to the Servicer of expenses recoverable under
such policy.
"Net Liquidation Proceeds" shall mean, at any time, with respect to
any Contract that becomes a Defaulted Contract, the amount received by the
Servicer in respect of such Contract during or after the Collection Period in
which such Contract becomes a Defaulted Contract (excluding Liquidation Expenses
with respect to such Contract).
"Non-Servicer Default" shall mean the occurrence and continuation of
any one of the following events:
(a) failure on the part of the Custodian, any Subcustodian or any
Subservicer duly to observe or to perform any other covenants or agreements of
the Custodian, any Subcustodian or the Subservicer set forth in this Agreement,
the Sub-Servicing Agreement or any other Basic Document, which failure shall
(i) materially and adversely affect the rights of the Noteholders, the Insurer,
the Issuer, the Owner Trustee or the Indenture Trustee and (ii) continue
unremedied for a period of 30 days after the date on which the Custodian, any
Subcustodian or the Subservicer shall have knowledge of such failure or written
notice of such failure, requiring the same to be remedied, shall have been given
to the Custodian, any Subcustodian or any Subservicer, as the case may be, by
the Insurer, the Issuer, the Owner Trustee or the Indenture Trustee;
(b) the entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of the Custodian, any
Subcustodian or the Subservicer in an involuntary 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 appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Custodian, any Subcustodian or the Subservicer or of any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Custodian, any Subcustodian or the Subservicer and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days or the commencement of an involuntary case under the federal
bankruptcy laws, as now or hereafter in effect, or another present or future
federal or
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state bankruptcy, insolvency or similar laws and such case is not dismissed
within 60 days;
(c) the commencement by the Custodian, any Subcustodian or the
Subservicer 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 Custodian, any
Subcustodian or the Subservicer to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Custodian, any Subcustodian or the Subservicer or of any
substantial part of its property or the making by the Custodian, any
Subcustodian or the Subservicer of an assignment for the benefit of creditors or
the failure by the Custodian, any Subcustodian or the Subservicer generally to
pay its debts as such debts become due or the taking of corporate action by the
Custodian, any Subcustodian or the Subservicer in furtherance of any of the
foregoing;
(d) any representation, warranty or statement of the Custodian, any
Subcustodian or the Subservicer made in this Agreement, the Sub-Servicing
Agreement or the other Basic Documents or any certificate, report or other
writing delivered pursuant hereto or thereto shall prove to be incorrect in any
material respect as of the time when the same shall have been made, and the
incorrectness of such representation, warranty or statement has a material
adverse effect on the Noteholders or the Insurer and, within 30 days afer
written notice thereof shall have been given to the Custodian, any Subcustodian
or the Subservicer, as applicable, by the Indenture Trustee or the Issuer, or so
long as no Insurer Default has occurred and is continuing, by the Insurer, the
circumstance or condition in respect of which such representation, warranty or
statement was incorrect shall not have been eliminated or otherwise cured; or
(e) a Servicer Default shall have occurred.
"Note" shall mean a Class A-1 Note, a Class A-2 Note, a Class A-3
Note or a Class A-4 Note.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes, collectively.
"Note Distributable Amount" shall mean, with respect to any
Distribution Date, the sum of the Note Principal Distributable Amount and the
Note Interest Distributable Amount for such Distribution Date.
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"Note Distribution Account" shall mean the account established and
maintained as such pursuant to Section 4.01.
"Noteholder" shall have the meaning specified in the Indenture.
"Note Interest Carryover Shortfall" shall mean, with respect to any
Distribution Date and a Class of Notes, the sum of (i) the excess, if any, of
the Note Interest Distributable Amount for such Class for the immediately
preceding Distribution Date over the amount in respect of interest that is
actually deposited in the Note Distribution Account with respect to such Class
on such preceding Distribution Date, and, (ii) to the extent permitted by
applicable law, interest on the amount of interest due but not paid to
Noteholders of such Class on the preceding Distribution Date at the related Note
Rate for the related Interest Accrual Period; provided that the Note Interest
Carryover Shortfall for the first Distribution Date shall be zero.
"Note Interest Distributable Amount" shall mean, with respect to any
Distribution Date and a Class of Notes, the sum of (i) an amount equal to the
interest accrued during the related Interest Accrual Period at the related Note
Rate for such Class of Notes on the Outstanding Principal Amount of such Class
of Notes on the immediately preceding Distribution Date (or, in the case of the
first Distribution Date, on the original Outstanding Principal Amount of such
Class of Notes) and (ii) the Note Interest Carryover Shortfall for such Class of
Notes for such Distribution Date.
"Note Principal Carryover Shortfall" shall mean, as of the close of
business on any Distribution Date, the excess of the Note Principal
Distributable Amount for such Distribution Date over the amount in respect of
principal that is actually paid from the Note Distribution Account on such
Distribution Date.
"Note Principal Distributable Amount" shall mean, with respect to
any Distribution Date, the sum of (i) the Principal Distributable Amount for
such Distribution Date and (ii) any outstanding Note Principal Carryover
Shortfall for the immediately preceding Distribution Date; provided that the
Note Principal Distributable Amount shall not exceed the aggregate Outstanding
Principal Amount of the Notes. Notwithstanding the foregoing, the Note Principal
Distributable Amount on the Final Scheduled Distribution Date for each Class
shall not be less than the amount that is necessary to reduce the Outstanding
Principal Amount of the related Class of Notes to zero.
"Note Rate" shall mean the Class A-1 Rate, the Class A-2 Rate, the
Class A-3 Rate or the Class A-4 Rate, as the case may be.
"Note Register" shall have the meaning specified in the Indenture.
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"Obligee" shall mean, with respect to any Contract, the Person to
whom an Obligor is indebted under such Contract.
"Obligor" shall mean, with respect to any Contract, the purchaser or
co-purchasers of the Financed Vehicle and any other Person who owes payments
under such Contract.
"Officers' Certificate" shall mean a certificate signed by the
Chairman, the President, a Vice President, the Treasurer, an Assistant
Treasurer, the Controller, an Assistant Controller, the Secretary or an
Assistant Secretary of any Person delivering such certificate and delivered to
the Person to whom such certificate is required to be delivered. In the case of
an Officers' Certificate of the Servicer, the signing officer must be a
Servicing Officer. Unless otherwise specified, any reference herein to an
Officers' Certificate shall be to an Officers' Certificate of the Servicer.
"Opinion of Counsel" shall mean a written opinion of counsel (who
may be an employee of or counsel to the Seller or the Servicer) acceptable to
the Indenture Trustee or the Owner Trustee, as the case may be, and the Insurer,
which opinion shall be acceptable in form and substance to the Indenture Trustee
and the Insurer and shall be addressed to the Indenture Trustee or Owner
Trustee, as the case may be, and the Insurer.
"Optional Purchase" shall have the meaning specified in Section 8.01
"Original Pool Balance" shall mean $794,746,210.70, which is the
aggregate principal balance.
"Originator" shall mean AutoNation Financial Services Corp., and its
permitted successors and assigns.
"Outstanding" shall mean with respect to a Contract and as of the
time of reference thereto, a Contract that has not reached its Maturity Date,
has not been fully prepaid, has not become a Defaulted Contract and has not
otherwise been repurchased pursuant to Section 2.03, 3.06 or 8.01.
"Outstanding Principal Amount" shall mean, with respect to any
Distribution Date, the aggregate outstanding principal amount of the Notes after
giving effect to any payments of principal made on the Notes on such
Distribution Date.
"Outstanding Principal Balance" shall mean, as of the Cut-Off Date,
the amount set forth as the Outstanding Principal Balance of such Contract on
the
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Schedule of Contracts, such amount being the total of all principal payments due
after the Cut-Off Date.
"Overcollateralization Amount" shall mean 1.0% of the initial Pool
Balance.
"Owner Trust Agreement" shall mean the Amended and Restated Owner
Trust Agreement, dated as of October 1, 1999, between the Depositor and the
Owner Trustee, as the same may be further amended, supplemented or otherwise
modified and in effect.
"Owner Trustee" shall mean The Bank of New York (Delaware), a
Delaware banking corporation, not in its individual capacity but solely as the
Owner Trustee under the Owner Trust Agreement acting on behalf of the Issuer,
its successors in interest and any successor Owner Trustee under the Owner
Trust Agreement.
"Owner Trustee Corporate Trust Office" shall mean the principal
office of the Owner Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the date of the
execution of this Agreement is located at White Clay Center, Route 273, Newark,
Delaware 19711, Attention: Corporate Trust Administration, with a copy to The
Bank of New York, 101 Barclay Street, Floor 12 East, New York, New York 10286,
Attention: Corporate Trust Administration; or at such other address as the Owner
Trustee may designate from time to time by notice to the Noteholders, the
Insurer, the Servicer and the Seller.
"Owner Trustee Fee" shall equal the amount specified in the Owner
Trust Agreement.
"Paying Agent" shall mean with respect to the Notes, the Person
acting as the "Paying Agent" under the Indenture or any other Person that meets
the eligibility standards for the Indenture Trustee specified in the Indenture
and is authorized by the Issuer to make the distributions from the Note
Distribution Account, including payment of principal of or interest on the Notes
on behalf of the Issuer.
"Payment Account" shall mean the account established and maintained
as such pursuant to Section 4.01.
"Person" shall mean a legal person, including any individual,
corporation, estate, partnership, limited liability company or limited
liability partnership, joint venture, association, joint stock company, business
trust, trust (including any
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beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Pool Balance" as of the time of determination shall mean the
aggregate of the Principal Balances of the Contracts, exclusive of the Principal
Balances of all Contracts that are not Outstanding at the end of the Collection
Period ending immediately prior to such time of determination.
"Pool Factor" shall mean, a six-digit decimal computed each month
indicating the Pool Balance at the end of the month, divided by the Original
Pool Balance. The Pool Factor will be 1.000000 as of the Closing Date;
thereafter, the Pool Factor will decline to reflect reductions in the Pool
Balance.
"Potential Preference Parties" shall have the meaning specified in
Section 4.04(e).
"Preference Amount" shall mean, any amount previously distributed to
a Noteholder that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
"Preference Claim" shall have the meaning specified in Section 7.05.
"Principal Balance" shall mean, with respect to a Contract, as of
any date of determination, the Amount Financed under the terms of such Contract
minus (i) that portion of all Monthly Scheduled Payments and any full or partial
prepayments in respect of such Contract received on or prior to the end of the
most recently ended Collection Period and allocable to principal as determined
by the Servicer. For purposes of this definition, allocations between interest
and principal of the Monthly Scheduled Payment on each Contract by the Servicer
shall be made in accordance with the terms of such Contract.
"Principal Distributable Amount" shall mean, with respect to any
Distribution Date, the amount equal to the sum of the following amounts with
respect to the Collection Period: (i) collections received on Contracts (other
than Defaulted Contracts and Purchased Contracts) allocable to principal as
determined by the Servicer, including full and partial principal prepayments;
(ii) the Principal Balance of all Contracts (other than Purchased Contracts)
that become Defaulted Contracts during the related Collection Period; and (iii)
the Principal Balance as of the date of purchase of all Contracts that became
Purchased Contracts as of the immediately preceding Servicer Report Date.
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"Purchase Amount" shall mean, with respect to a Purchased Contract,
the Principal Balance of such Contract as of the date of purchase or repurchase
of such Contract plus accrued interest thereon to the date of purchase at the
applicable APR to the extent not previously collected.
"Purchased Contract" shall mean a Contract that (i) has been
purchased or repurchased by the Originator the Servicer or the Seller because of
certain material defects in documents related to such Contract, (ii) has been
repurchased by the Seller or the Originator because of certain breaches of
representations and warranties regarding such Contract made by the Seller in
this Agreement or by the Originator in the Receivables Purchase Agreement, as
applicable, pursuant to the terms thereof, (iii) has been purchased by the
Servicer because of certain breaches by the Servicer of representations or
servicing covenants pursuant to Section 3.06 or (iv) has been purchased by the
Servicer in the event of an optional purchase of all of the Contracts pursuant
to Section 8.01.
"Rating Agencies" shall mean Moody's and Standard & Poor's, and if
either Moody's or Standard & Poor's no longer maintain a rating on the Notes,
such other nationally recognized statistical rating organization designated by
the Depositor and acceptable to the Insurer.
"Receivables Purchase Agreement" shall mean the Receivables Purchase
Agreement, dated as of October 1, 1999, between AutoNation Financial Services,
as seller, and the Seller, as purchaser, as such agreement may from time to time
be amended, supplemented or otherwise modified and in effect.
"Record Date" shall mean, with respect to a Class of Notes, on each
Distribution Date and the Final Scheduled Distribution Date, the Business Day
immediately prior to such Distribution Date or Final Scheduled Distribution Date
or, if Definitive Securities are issued, the last day of the immediately
preceding calendar month.
"Registrar of Titles" shall mean the agency, department or office
having the responsibility for maintaining records of titles to motor vehicles
and issuing documents evidencing such titles in the jurisdiction in which a
particular Financed Vehicle is registered.
"Reimbursement Amount" shall mean the sum of (i) any unreimbursed
payments made by the Insurer under the Insurance Policy or pursuant to Section
5.02(c) of the Indenture, (ii) any expense paid by the Insurer pursuant to
Section 3.04(b) and not reimbursed by the Servicer pursuant to such Section
3.04(b), (iii) any unpaid Insurance Premium and (iv) all other amounts due to
the Insurer under the
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Insurance Agreement, in each case, together with interest on such amounts at the
Late Payment Rate (as defined in the Insurance Agreement).
"Re-Liening Expenses" shall mean reasonable out-of-pocket expenses,
acceptable to the Insurer and incurred in connection with the retitling of the
Title Documents to name the Indenture Trustee as secured party with respect to
the Financed Vehicles pursuant to Section 3.04(b).
"Request for Release of Documents" shall have the meaning set forth
in the Custodial Agreement.
"Residual Interest Certificate" shall have the meaning specified in
the Owner Trust Agreement.
"Responsible Officer" shall mean any officer of the Indenture
Trustee or the Owner Trustee within the Corporate Trust Office or the Owner
Trustee Corporate Office, as applicable, including any vice president,
assistant vice president, assistant treasurer, assistant secretary or any other
officer of the Indenture Trustee or Owner Trustee customarily performing
functions similar to those performed by any of the above designated officers
with direct responsibility for the administration of this Agreement.
"Schedule of Contracts" shall mean the list or lists of Contracts
attached as Exhibit A hereto. In addition, the information contained in Exhibit
A shall also be contained on a computer disk or tape (the "Disk") that shall be
delivered by the Servicer to the Indenture Trustee and the Insurer on or prior
to the Closing Date.
"Securities Control Account Agreement" shall have the meaning set
forth in the Indenture.
"Seller" shall mean AutoNation Receivables Corporation, a Delaware
corporation, in its capacity as the Seller of the Contracts under this
Agreement, and each successor thereto (in the same capacity) pursuant to Section
5.02.
"Servicer" shall mean AutoNation Financial Services Corp., a
Delaware corporation, in its capacity as the servicer of the Contracts under
Section 3.01, and, in each case upon succession in accordance herewith, each
successor servicer in the same capacity pursuant to Section 3.01 and each
successor servicer pursuant to Section 7.02.
"Servicer Default" shall mean an event specified in Section 7.01.
"Servicer Report Date" shall mean, with respect to any Distribution
Date, the third Business Day prior to such Distribution Date.
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"Servicing Fee" shall mean, as to any Distribution Date, the fee
payable to the Servicer for services rendered during the Collection Period
ending immediately prior to such Distribution Date, which shall be an amount
equal to the product of the Servicing Fee Percentage multiplied by the Pool
Balance as of the end of the Collection Period preceding the related Collection
Period or in the case of the first Distribution Date, the Pool Balance as of
the Cut-Off Date.
"Servicing Fee Percentage" shall mean a percentage equal to the
product of one-twelfth of 1.0% per annum.
"Servicing Officer" shall mean any officer of the Servicer involved
in, or responsible for, the administration and servicing of the Contracts whose
name appears on a list of servicing officers furnished to the Indenture Trustee
and the Insurer by the Servicer pursuant to Section 3.01, as such list may be
amended or supplemented from time to time.
"Servicing Standards" shall mean, at any time, the quality of the
Servicer's performance with respect to (i) compliance with the terms of this
Agreement and the Collection Policy and (ii) adequacy, measured in accordance
with industry standards and current and historical standards of the Servicer, in
respect of the servicing of all Contracts serviced by the Servicer, regardless
of whether any such Contract is owned by the Servicer or otherwise.
"Simple Interest Contract" shall mean a Contract as to which the
portion of payments allocable to earned interest and principal thereunder is
determined according to the Simple Interest Method.
"Simple Interest Method" shall mean the method for calculating
interest on a Contract whereby interest due is calculated each day based on the
actual principal balance of the Contract on that day.
"Spread Account" shall mean the account established and maintained
as such pursuant to Section 4.01.
"Spread Account Initial Deposit" shall equal the amount set forth in
the Insurance Agreement.
"Spread Account Property" shall mean the Spread Account, all amounts
and investments held from time to time in the Spread Account (whether in the
form of deposit accounts, physical property, book-entry securities,
uncertificated securities or otherwise) and all proceeds of the foregoing.
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"Spread Account Required Amount" shall have the meaning set forth in
the Insurance Agreement.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., and its permitted successors and
assigns.
"Subcustodian" shall mean World Omni Financial Corp., a Florida
corporation and any successor.
"Subservicer" shall mean World Omni Financial Corp., a Florida
corporation, in its capacity as the subservicer of the Contracts under Section
3.01, and, upon succession in accordance herewith, each successor subservicer in
the same capacity pursuant to Section 3.01.
"Sub-Servicing Agreement" shall mean the Servicing Agreement, dated
as of March 10, 1997 between AutoNation Financial Services and the Subservicer,
as the same may from time to time be amended, supplemented or otherwise modified
and in effect.
"Successor Custodian" shall have the meaning set forth in Section
2.04(b).
"Successor Servicer" shall have the meaning set forth in Section
7.02.
"Title Document" shall mean, with respect to any Financed Vehicle,
the certificate of title for, or other evidence of ownership of, such Financed
Vehicle issued by the Registrar of Titles in the jurisdiction in which such
Financed Vehicle is registered.
"Transition Costs" shall mean reasonable costs and expenses incurred
by or payable to the Successor Servicer in connection with the transfer of
servicing (whether due to termination, resignation or otherwise) from the
Servicer to such Successor Servicer, which shall be approved in writing by the
Insurer.
"Trust" shall mean the Issuer.
"Trust Account Property" shall mean the Trust Accounts, all amounts
and investments held from time to time in any Trust Account (whether in the form
of deposit accounts, physical property, book-entry securities, uncertificated
securities or otherwise) and all proceeds of the foregoing.
"Trust Accounts" shall have the meaning specified in Section
4.01(a).
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Trust Estate" shall mean all right, title and interest of the Trust
in and to the property and rights pledged to the Indenture Trustee pursuant to
the Indenture.
"Trust Property" shall have the meaning set forth in Section
2.01(a).
"UCC" shall mean the Uniform Commercial Code as in effect in the
applicable jurisdiction.
"Underwriting Guidelines" shall have the meaning set forth in the
Insurance Agreement.
SECTION 1.02. Usage of Terms.
With respect to all terms in this Agreement, the singular includes
the plural and the plural the singular; words importing any gender include the
other genders; 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 amendments, modifications and
supplements thereto or any 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 term "including" means
"including without limitation."
SECTION 1.03. Section References.
All section references, unless otherwise indicated, shall be to
Sections in this Agreement.
SECTION 1.04. Calculations.
Interest on the Class A-1 Notes will be calculated on the basis of
the actual number of days in the related Interest Accrual Period and a 360-day
year. Interest on the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes will be calculated on the basis of a 360-day year consisting of twelve
30-day months. Collections of interest on Simple Interest Contracts will be
calculated in accordance with the terms thereof.
SECTION 1.05. Accounting Terms.
All accounting terms used but not specifically defined herein shall
be construed in accordance with generally accepted accounting principles in the
United States of America.
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ARTICLE II
CONVEYANCE OF CONTRACTS;
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 2.01. Conveyance of Contracts.
(a) In consideration of the Issuer's delivery of the authenticated
Notes to or upon the order of the Seller, effective upon the Closing Date, the
Seller hereby sells, grants, transfers, conveys and assigns to the Issuer,
without recourse (except as expressly provided in Section 2.03 hereof), all of
the right, title and interest of the Seller in, to and under:
(i) the Contracts listed in the Schedule of Contracts;
(ii) all monies received with respect to all Contracts after the
Cut-Off Date, including any Purchase Amounts;
(iii) all Net Liquidation Proceeds and Net Insurance Proceeds with
respect to any Financed Vehicle to which a Contract relates received after
the Cut-Off Date;
(iv) all documents relating to the Contracts, the Contract Documents
and Contract Files relating to the Contracts, including all servicing
records in hard and electronic form;
(v) all rights of the Seller (but not its obligations) under the
Receivables Purchase Agreement;
(vi) any and all security interests in the Financed Vehicles and the
rights to receive proceeds from claims on any insurance policies covering
the Financed Vehicles or the individual Obligors under each related
Contract; and
(vii) all proceeds in any way delivered with respect to the
foregoing, all rights to payments with respect to the foregoing and all
rights to enforce the foregoing.
The foregoing items of property listed in this Section 2.01 (the
"Conveyed Property"), together with the Trust Account Property, are
collectively referred to herein as the "Trust Property". In addition, the Issuer
shall cause the Insurer to issue the Insurance Policy.
It is the intention of the Seller and the Issuer that the assignment
and transfer contemplated herein constitute (and shall be construed and treated
for all
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purposes as) a true and complete sale of the Conveyed Property, conveying good
title thereto free and clear of any liens and encumbrances, from the Seller to
the Issuer. However, in the event that such conveyance is deemed to be a pledge
to secure a loan (in spite of the express intent of the parties hereto that this
conveyance constitutes, and shall be construed and treated for all purposes as a
true and complete sale), the Seller hereby grants to the Issuer, for the benefit
of the Noteholders and the Insurer, a security interest which security interest
shall be a first priority perfected security interest in all of the Seller's
right, title and interest in, to and under the Trust Property whether now
existing or hereafter created and all proceeds of the foregoing to secure the
loan deemed to be made in connection with such pledge and, in such event, this
Agreement shall constitute a security agreement under applicable law.
(b) As of the Closing Date, the Issuer acknowledges the conveyance
to it of the Conveyed Property from the Seller, including all right, title and
interest of the Seller in, to and under the Conveyed Property, receipt of which
is hereby acknowledged by the Issuer. Concurrently with such conveyance and in
exchange therefor, the Issuer has pledged to the Indenture Trustee, for the
benefit of the Noteholders and the Insurer, the Trust Property and the Indenture
Trustee, pursuant to the written instructions of the Issuer, has executed and
caused to be authenticated and delivered the Notes to the Seller or its
designee, upon the order of the Issuer. In addition, concurrently with such
delivery and in exchange therefor, the Owner Trustee, pursuant to the
instructions of the Seller, has executed (not in its individual capacity, but
solely as Owner Trustee on behalf of the Issuer) and caused to be authenticated
and delivered, the Residual Interest Certificate to the Seller, upon the order
of the Seller.
(c) In connection with the sale of the Contracts pursuant to the
Receivables Purchase Agreement, AutoNation Financial Services has filed with the
office of the Secretary of State of the State of Florida a UCC-1 financing
statement naming AutoNation Financial Services as debtor, naming the Seller as
secured party and the Indenture Trustee as assignee and including the Contracts
in the description of the collateral. In connection with the sale of the
Contracts pursuant to this Agreement, the Seller has filed or caused to be filed
with the Secretary of State of the State of Florida a UCC-1 financing statement
naming the Seller as debtor, naming the Issuer as secured party, naming the
Indenture Trustee, on behalf of the Noteholders and the Insurer, as assignee,
and including the Contracts in the description of the collateral. In connection
with the pledge of the Contracts pursuant to the Indenture, the Trust has filed
or caused to be filed with the offices of the Secretary of State of the State of
Delaware UCC-1 financing statements naming the Trust as debtor and the Indenture
Trustee, on behalf of the Noteholders and the Insurer, as secured party. The
grant of a security interest to the Indenture Trustee and the rights of the
Indenture Trustee in the Contracts shall be governed by the Indenture.
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The Seller shall have caused UCC-2 termination statements to have
been filed with the office of Secretary of State of the State of Florida
terminating any effective UCC-1 financing statements with respect to any
outstanding security interests in the Contracts.
(d) From time to time, the Servicer shall cause to be taken such
actions as are necessary to continue the perfection of the respective interests
of the Trust and the Indenture Trustee in the Contracts and to continue the
first priority security interest of the Originator in the Financed Vehicles and
their proceeds and the effectiveness of the assignment of the security interest
in the Financed Vehicles and their proceeds to the Indenture Trustee (other
than, as to such priority, any statutory lien arising by operation of law after
the Closing Date which is prior to such interest), including, without
limitation, the filing of financing statements, amendments thereto or
continuation statements and the making of notations on records or documents of
title; provided, however, the Servicer will not be required to submit the Title
Documents for retitling in the name of the Indenture Trustee except as provided
in Section 3.04(b).
(e) The Owner Trustee, on behalf of the Issuer and the Indenture
Trustee, hereby authorizes the Servicer, and the Servicer hereby agrees, to take
such steps as are necessary to re-perfect such security interest in the event of
the relocation of a Financed Vehicle or for any other reason, in either case,
when the Servicer has knowledge of the need for such re-perfection. In the event
that the assignment of a security interest in a Contract by the Servicer, as
Originator, to the Seller pursuant to the Receivables Purchase Agreement, by the
Seller to the Issuer pursuant to the terms of this Agreement and by the Issuer
to the Indenture Trustee pursuant to the Indenture 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 assign to the Indenture
Trustee a perfected security interest in the related Financed Vehicle, the
Seller and the Servicer hereby agree that the Originator's listing as the
secured party on the certificate of title is deemed to be in its capacity as
agent of the Indenture Trustee and the Servicer further agrees to hold or cause
to be held such certificate of title as the Indenture Trustee's agent and
custodian; provided, however, that the Servicer shall not, nor shall the Owner
Trustee, the Indenture Trustee or the Noteholders have the right to require that
the Servicer make any such notation on the related Financed Vehicle's
certificate of title or fulfill any such additional administrative requirements
of the laws of the State in which a Financed Vehicle is located, except as
otherwise provided in Section 3.04.
(f) During the term of this Agreement, the Seller and AutoNation
Financial Services shall each maintain its chief executive office in one of the
States of the United States.
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(g) The Servicer shall pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Indenture Trustee's right, title and interest in and to
the Contracts and in connection with maintaining the first priority security
interest of the Indenture Trustee in the Financed Vehicles and the proceeds
thereof; provided, however, the parties acknowledge that the Title Documents
will not be submitted for retitling in the name of the Indenture Trustee as
secured party except as provided in Section 3.04(b).
SECTION 2.02. Representations and Warranties of the Seller.
The Seller hereby makes the following representations and warranties
on which (i) the Issuer is deemed to have relied in acquiring the Contracts and
(ii) the Insurer is deemed to have relied in issuing the Insurance Policy. Such
representations and warranties speak as of the Closing Date, but shall survive
the sale, transfer and assignment of the Contracts to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(a) As to the Seller:
(i) The Seller is duly organized and validly existing as a
corporation organized and existing and 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 currently owned and conducted and had at all
relevant times, and has, power, authority, and legal right to originate or
acquire, own and sell the Contracts.
(ii) The Seller is duly qualified to do business as a foreign
corporation in good standing, and shall have obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such
qualifications.
(iii) The Seller has the power and authority to execute and deliver
this Agreement and the other Basic Documents to which it is a party and to
carry out their respective terms; the Seller has full power, authority and
legal right to sell and assign the property to be sold and assigned to and
deposited with the Issuer and has duly authorized such sale and assignment
to the Issuer by all necessary corporate action; and the execution,
delivery, and performance of this Agreement and the other Basic Documents
to which it is a party have been duly authorized by the Seller by all
necessary corporate action.
(iv) This Agreement constitutes a valid sale, transfer and
assignment of the Contracts, enforceable against creditors of and
purchasers from the Seller. This Agreement and the other Basic Documents
to which it is a party
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constitute legal, valid, and binding obligations of the Seller enforceable
in accordance with their respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, or other similar
laws affecting the enforcement of creditors' rights in general and by
general principles of equity, regardless of whether such enforceability
shall be considered in a proceeding in equity or at law.
(v) The consummation of the transactions contemplated by this
Agreement and the other Basic Documents and the fulfillment of their
respective terms shall not conflict with, result in any breach of any of
the terms and provisions of, nor constitute (with or without notice or
lapse of time) a default under, the certificate of incorporation or bylaws
of the Seller, or any indenture, agreement, or other instrument to which
the Seller is a party or by which it shall be bound; nor result in the
creation or imposition of any Lien upon any of the properties of the
Seller pursuant to the terms of any such indenture, agreement, or other
instrument (other than pursuant to the Basic Documents to which the Seller
is a party); nor violate any law or any order, rule, or regulation
applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(vi) There are no proceedings or investigations pending, or, to the
Seller's best knowledge after due inquiry, threatened, before any court,
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or its properties: (A)
asserting the invalidity of this Agreement, the other Basic Documents or
the Notes, (B) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement
and the other Basic 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, the other Basic Documents or the Notes, or (D) naming the
Seller which might adversely affect the federal income tax attributes of
the Notes.
(vii) On the Closing Date, the chief executive office of the Seller
is located at 200 South Andrews Avenue, Fort Lauderdale, Florida 33301.
(viii) The legal name of the Seller is the name used by it in this
Agreement and the Seller has not changed its name since the date of its
incorporation and does not have any trade names, fictitious names,
assumed names or "doing business" names.
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(ix) The transactions contemplated by this Agreement and the other
Basic Documents are being consummated by the Seller in furtherance of its
ordinary business purposes, with no contemplation of insolvency and no
intent to hinder, delay or defraud any of its present or future creditors
and the Seller has received fair consideration having value reasonably
equivalent or in excess of the value of the Contracts and the other
conveyed property and the performance of the Seller's obligations
hereunder. Both immediately before and after the transactions contemplated
by this Agreement and the other Basic Documents, (a) the Seller is
solvent and will not become insolvent and will have adequate capital to
conduct its business after giving effect to the transactions contemplated
in this Agreement and the other Basic Documents and is paying its debts as
they become due and (b) the sum of the Seller's assets was or will be
greater than the sum of its debts and in excess of the amount that will be
required to pay its probable liabilities as they then exist and as they
become absolute and matured.
(x) No consent, approval, license, authorization or order of, or
declaration, registration or filing with, any governmental authority or
other Person is required to be made by the Seller in connection with the
execution, delivery or performance of this Agreement or the Basic
Documents to which it is a party or the consummation of the transactions
contemplated hereby or thereby, except such as have been duly made,
effected or obtained.
(xi) The Seller (a) is not in violation in any material respect of
any laws, ordinances, governmental rules or regulations to which it is
subject and (b) is not in violation in any material respect of any term of
any agreement, charter instrument, bylaw or instrument to which it is a
party or by which it may be bound which violation or failure to obtain
might materially and adversely affect the business or condition
(financial or otherwise) of the Seller or affect its ability to perform
its obligations under this Agreement and the other Basic Documents.
(b) As to each Contract:
(i) The information pertaining to such Contract set forth in the
related Schedule of Contracts, the Disk and the computer disk describing
the characteristics of the Contracts was true and correct in all material
respects at the Closing Date and the calculations of the Principal
Balances appearing in such Schedule of Contracts for each such Contract at
the Cut-Off Date have been performed in accordance with this Agreement and
are accurate.
(ii) As of the Closing Date, such Contract creates a valid and
enforce able first priority security interest in favor of AutoNation
Financial
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Services in the Financed Vehicle securing such Contract, and such security
interest has been duly perfected and 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
unpaid taxes or unpaid storage or repair charges which may arise after the
Closing Date in accordance with the UCC); such security interest has been
duly assigned by AutoNation Financial Services to the Seller pursuant to
the Receivables Purchase Agreement, and, as of the Closing Date, has been
assigned by the Seller to the Issuer pursuant to Section 2.01(a) hereof
and pledged by the Issuer to the Indenture Trustee pursuant to the
Indenture.
(iii) (A) If the related Financed Vehicle was originated in a state
in which notation of a security interest on the Title Document is required
or permitted to perfect such security interest, the Title Document or the
electronic title records for such Financed Vehicle shows, or, if a new or
replacement Title Document is being applied for with respect to such
Financed Vehicle, the Title Document will be received within 180 days of
the Closing Date and will show, AutoNation Financial Services named as the
original and only secured party under the related Contract as the holder
of a first priority security interest in such Financed Vehicle, and (B) if
the related Financed Vehicle was originated in a state in which the filing
of a financing statement under the UCC is required to perfect a security
interest in motor vehicles, such filings or recordings have been duly made
and show AutoNation Financial Services named as the original and only
secured party under the related Contract, and in either case, the
Indenture Trustee on behalf of the Noteholders and the Insurer has the
same rights as such secured party has or would have (if such secured party
were still the owner of such Contract) (x) against all parties claiming an
interest in such Financed Vehicle and (y) to repossess or recover by legal
process the Financed Vehicle in its name. With respect to each Contract
for which the Title Document has not yet been returned from the Registrar
of Titles, AutoNation Financial Services has written evidence that such
Title Documents showing AutoNation Financial Services as first lienholder
have been applied for. AutoNation Financial Services has given and
delivered an irrevocable power of attorney to the Indenture Trustee, and
such power of attorney together with the Title Documents are all the
documents necessary to permit the Indenture Trustee to submit the Title
Documents for each Financed Vehicle to the applicable Registrar of Titles
for retitling in the name of the Indenture Trustee as secured party.
(iv) It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Contracts from the
Seller to the Issuer and that the beneficial interest in and title to such
Contracts not be part of the Seller's estate in the event of the filing of
a bankruptcy petition by or
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against the Seller under any Insolvency Proceeding. No Contract has been
sold, transferred, assigned or pledged by the Seller to any Person other
than the Issuer and the Seller acquired title to the Contracts in good
faith, without notice of any adverse claim. As of the Closing Date, the
Seller had good and market able title to and was the sole owner of each
Contract to be transferred to the Issuer pursuant to Section 2.01 free of
liens, claims, encumbrances and rights of others and, upon the transfer of
such Contract to the Issuer pursuant to Section 2.01, the Issuer will have
good and marketable title to and will be the sole owner of such Contract
free of any liens, encumbrances and rights of others, and upon the pledge
of such Contract to the Indenture Trustee pursuant to the Indenture, the
Indenture Trustee will have a first priority, perfected security interest
in such Contract free of liens, encumbrances and rights of others.
(v) As of the Cut-Off Date, no payment of $40 or more on each such
Contract was 31 or more days past due.
(vi) As of the Closing Date there is no lien against the related
Financed Vehicle for delinquent taxes.
(vii) As of the Closing Date, there is no right of rescission,
offset, defense, claim or counterclaim to the obligation of the related
Obligor(s) to pay the unpaid principal or interest due under such
Contract; the operation of the terms of such Contract or the exercise of
any right thereunder will not render such Contract unenforceable in whole
or in part nor subject such Contract to any right of rescission, offset,
defense, claim or counterclaim, and no right of rescission, offset,
defense or counterclaim has been asserted or threatened.
(viii) Such Contract is a retail installment sales contract, and
such Contract and the sale of the Financed Vehicle sold thereunder, at the
time it was made complied and has complied through the Closing Date in all
material respects with all requirements of applicable federal, state and
local laws and regulations thereunder, including without limitation the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair
Credit Reporting Act, the Federal Trade Commission Act, the Fair Debt
Collection Practices Act, the Fair Credit Billing Act, the Magnuson-Moss
Warranty Act, the Federal Re serve Board's Regulations B and Z, the
Soldiers' and Sailors' Civil Relief Act of 1940, state adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code, and any
other consumer credit, equal opportunity and disclosure laws applicable to
that contract and sale; and the consummation of the transactions herein
contemplated, including, without limitation, the transfer of ownership of
the Contracts to the Issuer, the pledge to the Indenture Trustee
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and the receipt of interest by the Noteholders, will not violate any
applicable federal, state or local law.
(ix) Such Contract is in full force and effect in accordance with
its respective terms and is the legal, valid and binding obligation of the
related Obligor(s) thereunder and is enforceable in accordance with its
terms, except only as such enforcement may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally; each party to such Contract had full legal capacity to execute
and deliver such Contract and all other documents related thereto and to
grant the security interest purported to be granted thereby; the terms of
such Contract have not been waived, amended or modified (including,
without limitation, extensions) in any respect, except by instruments that
are part of the related Contract Documents, and no such waiver, amendment
or modification has caused such Contract to fail to meet all of the
representations, warranties and conditions, set forth herein with respect
thereto. To the best of the Seller's knowledge, there are no proceedings
pending or threatened, wherein the Obligor or any governmental agency has
alleged that such Contract is illegal or unenforceable. Such Contract and
the related Contract Documents constitute the entire agreement between the
Seller (as assignee of AutoNation Financial Services) and the related
Obligor.
(x) Such Contract contains customary and enforceable provisions such
as to render the rights and remedies of the holder or assignee thereof
adequate for the practical realization against the collateral of the
benefits of the security, subject, as to enforceability, to bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement of
creditors' rights generally.
(xi) As of the Closing Date, there was no default, breach, violation
or event permitting acceleration existing under such Contract (except
payment delinquencies permitted by subparagraph (v) above) and no event
which, with notice and the expiration of any grace or cure period, would
constitute such a default, breach, violation or event permitting
acceleration under such Contract, and the Seller has not waived any such
default, breach, violation or event permitting acceleration except payment
delinquencies permitted by subparagraph (v) above.
(xii) As of the Closing Date, such Contract requires that the
related Obligor(s) obtain and maintain in effect for the related Financed
Vehicle a comprehensive and collision insurance policy (i) in an amount at
least equal to the lesser of (x) its fair market value or (y) the
principal amount due from the related Obligor(s) under such Contract, (ii)
naming AutoNation Financial Services as a loss payee and (iii) insuring
against loss and damage due to fire,
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theft, transportation, collision and other risks generally covered by
comprehensive and collision coverage.
(xiii) Such Contract was originated in the United States of America
by AutoNation Financial Services and no adverse selection procedures have
been utilized in selecting such Contract from all other similar contracts
originated by AutoNation Financial Services.
(xiv) Payments under such Contract have been applied in accordance
with the Simple Interest Method, as provided in the applicable fixed rate
Contract, and are due monthly in substantially equal amounts through its
Maturity Date sufficient to fully amortize the principal balance of such
Contract by its Maturity Date.
(xv) There is only one manually executed original of such Contract
and such original, together with all other related Contract Documents, is
being held by the Custodian or an agent acceptable to the Insurer on its
behalf.
(xvi) As of the Closing Date, the Servicer has clearly marked its
electronic records to indicate that such Contract is owned by the Issuer.
(xvii) At the date of origination of the Contract, the original
principal balance of such Contract was not greater than the purchase price
to the related Obligor(s) (including taxes, warranties, licenses and
related charges) of the related Financed Vehicle.
(xviii) As of the Cut-Off Date, the Seller has not received notice
that any Obligor under such Contract has filed for bankruptcy, and to the
best of the Seller's knowledge without any independent investigation, no
Obligor under such Contract is in bankruptcy or similar proceedings.
(xix) As of the Cut-Off Date, such Contract had an original maturity
of not more than 72 months and such Contract has a remaining maturity of
72 months or less.
(xx) Such Contract constitutes "chattel paper" under the UCC as in
effect in the applicable jurisdiction.
(xxi) As of the Cut-Off Date, such Contract has a remaining
principal balance of not more than $75,000 and not less than $500.
(xxii) As of the Cut-Off Date, such Contract is secured by a
Financed Vehicle that has not been repossessed without reinstatement.
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(xxiii) Each related Obligor listed on such Contract had a mailing
address within the United States on the date of origination of such
Contract.
(xxiv) The rights with respect to such Contract are assignable by
the lender thereunder and its assignees without the consent of or notice
to any Person.
(xxv) All payments on such Contract are required to be made in
United States dollars.
(xxvi) None of the Obligors is the United States of America or any
state, or agency, department or instrumentality or political subdivision
of the United States of America or any state.
(xxvii) At the time of origination of such Contract, the proceeds of
such Contract were fully disbursed. There is no requirement for future
advances thereunder and all fees and expenses in connection with the
origination of such Contract have been paid.
(xxviii) The scheduled payments on such Contracts are applicable
only to payment of principal of and interest on such Contracts and not to
the payment of any insurance premiums (although the proceeds of the
extension of credit on such Contract may have been used to pay insurance
premiums).
(xxix) The related Obligor under the Contract does not have the
unilateral right to substitute, exchange or add any Financed Vehicle under
such Contract.
(xxx) Such Contract has a Maturity Date no later than four months
prior to the Final Scheduled Maturity Date of the Class A-4 Notes.
(xxxi) All filings (including UCC filings), notices, transfers and
recordings required under this Agreement and the other Basic Documents or
applicable law to perfect the first priority ownership or security
interest of the Issuer and the Indenture Trustee in the Contracts and the
other Trust Property have been accomplished and are in full force and
effect or will be accomplished within the time period specified in the
Basic Documents.
(xxxii) Such Contract was not originated in, and is not subject to
the laws of, any jurisdiction, the laws of which would make unlawful the
sale, transfer or assignment of such document under any of the Basic
Documents, including any repurchase in accordance with the Basic
Documents.
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(xxxiii) Such Contract being acquired by the Issuer and pledged to
the Indenture Trustee is identical to one of the Seller's standard form
loan contracts attached to the Receivables Purchase Agreement as Exhibit C
except for immaterial modifications or deviations from the form loan
contracts. Any such modifications or deviations from the form loan
contracts will not have a material adverse effect on the Noteholders or
the Insurer and will not reduce the Monthly Scheduled Payments or other
payments due under the Contracts.
(xxxiv) Such Obligor and Contract satisfied in all material respects
the requirements under the Underwriting Guidelines as in effect as of the
date of origination or purchase of such Contract by AutoNation Financial
Services.
(xxxv) The sale, transfer, assignment and conveyance of such
Contract and the related Conveyed Property by AutoNation Financial
Services pursuant to the Receivables Purchase Agreement, by the Seller
pursuant to this Agreement and by the Issuer pursuant to the Indenture is
not subject to and will not result in any tax, fee or governmental charge
payable by AutoNation Financial Services, the Seller, the Issuer or the
Indenture Trustee to any federal, state or local government ("Transfer
Taxes") other than the Transfer Taxes which have or will be paid by
AutoNation Financial Services or the Seller as due. In the event that the
Issuer or the Indenture Trustee receives actual notice of any Transfer
Taxes arising out of the transfer, assignment and conveyance of such
Contract and the related Trust Property, on written demand by the Issuer
or the Indenture Trustee, or upon the Seller's otherwise being given
notice thereof by the Issuer or the Indenture Trustee, the Seller shall
pay, and otherwise indemnify and hold the Issuer, the Indenture Trustee
and the Insurer harmless, on an after-tax basis, from and against any and
all such Transfer Taxes (it being understood that the Noteholders, the
Indenture Trustee, the Issuer and the Insurer shall have no obligation to
pay such Transfer Taxes).
(xxxvi) Such Contract has an APR equal to or greater than 5%.
(xxxvii) To the best of the Seller's knowledge, no Obligor is a
Person who is a lessor or a seller of equipment of a type similar to the
Financed Vehicles.
(xxxviii) Such Contract does not constitute a "consumer lease" under
either (a) the UCC as in effect in the jurisdiction whose law governs the
Contract or (b) the Consumer Leasing Act, 15 U.S.C. 1667.
(xxxix) AutoNation Financial Services and the Seller have duly
fulfilled all obligations to be fulfilled under or in connection with the
origination,
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acquisition and assignment of such Contract and the other Trust Property,
including, without limitation, giving any notices or consents necessary to
effect the acquisition of such Contract and the other Trust Property by
the Issuer and the subsequent pledge of the Trust Property to the
Indenture Trustee, and have not done anything that would impair the rights
of the Issuer, the Indenture Trustee, the Noteholders or the Insurer to
payments relating thereto.
(xl) To the best of the Seller's knowledge as of the Closing Date,
no Dealer has engaged in any conduct constituting fraud or
misrepresentation with respect to such Contract or the related Trust
Property.
(xli) The collection practices used by the Originator and each agent
of the Originator with respect to such Contract have been in all material
respects in accordance with the Collection Policy.
(xlii) There are no amounts owing by the Originator to any Dealer in
connection with the origination of any Contract and such Dealer has no
right, title or interest in or to such Contract.
(xliii) Amounts due to, or received by, an Obligor upon the
cancellation by such Obligor of the extended service or other products or
services (the "Additional Products") included in the Amount Financed shall
not reduce the Principal Balance of such Contract unless the Indenture
Trustee will receive all amounts due to an Obligor or lienholder upon
cancellation by such Obligor of such Additional Product. Each Additional
Product, and the sale of the Additional Product to each Obligor complied
at the time of such sale with all applicable state and federal laws (and
regulations thereunder), including without limitation, insurance, usury,
disclosure and consumer protection laws, equal credit opportunity, fair
credit reporting, truth-in-lending or other similar laws, the Federal
Trade Commission Act, and applicable state laws regulating such Additional
Products. There is not and will not be any right of rescission, offset,
defense, claim or counterclaim to the obligation of the related Obligor to
pay the amount due under each Contract which relates to Additional
Products.
(c) As to all of the Contracts:
(i) The aggregate Outstanding Principal Balance payable by Obligors
of the Contracts as of the Cut-Off Date equals the Original Pool Balance.
(ii) As of the Cut-Off Date, Contracts representing approximately
34% of the Outstanding Principal Balance are secured by new Financed
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Vehicles, and Contracts representing approximately 66% of the Outstanding
Principal Balance of all Contracts are secured by used Financed Vehicles.
(iii) The transfer, assignment and conveyance of the Contracts by
the Seller pursuant to this Agreement are not subject to the bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction.
(d) None of the foregoing representations and warranties shall be
construed as, and the Seller is specifically not making, any representations and
warranties regarding the collectability of the Contracts or the future
performance of the Contracts.
(e) The Seller has not prepared any financial statement which
accounts for the transfer of the Conveyed Property hereunder to the Issuer in
any manner other than as a sale of the Conveyed Property by it to the Issuer,
and the Seller has not in any other non-income tax respect (including, but not
limited to, for accounting purposes) accounted for or treated the transfer of
the Conveyed Property hereunder in any manner other than as a sale and absolute
assignment to the Issuer of the Seller's full right, title and ownership
interest in the Conveyed Property to the Issuer.
SECTION 2.03. Repurchase of Certain Contracts.
The representations and warranties of the Seller set forth in
Section 2.02(b) and (c) shall survive the Closing Date and shall continue until
the termination of this Agreement. Upon discovery by the Seller, the Servicer,
the Insurer or a Responsible Officer of the Owner Trustee or the Indenture
Trustee that any of such representations and warranties was incorrect, without
regard to any limitation set forth in such representation or warranty concerning
the knowledge of the Seller as to the facts stated therein, or that any of such
conditions was unsatisfied as of the time made or that any of the Contract
Documents relating to any such Contract has not been properly executed by the
Obligor or contains a material defect or has not been received by the Custodian
or its agent, such Person making such discovery shall give prompt notice to the
other such Persons. Without regard to any limitation set forth in such
representation or warranty concerning the knowledge of the Seller as to the
facts stated therein, if any such defect, incorrectness or omission materially
and adversely affects the interest in the Contract of the Noteholders, the
Indenture Trustee, the Issuer or the Insurer, the Seller shall cure the defect
or eliminate or otherwise cure the circumstances or condition in respect of
which such representation or warranty was incorrect as of the time made;
provided that if the Seller does not do so by the last day of the Collection
Period following the Collection Period (or, if the Seller elects, the last day
of such Collection Period) during which the Seller becomes aware of or receives
written notice from the Servicer, the Insurer or the Indenture Trustee of such
defect, incorrectness or
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omission, the Seller shall repurchase such Contract on the last day of the
applicable Collection Period from the Issuer at the Purchase Amount. Upon any
such repurchase, the Issuer shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Seller any Contract purchased hereunder. Except as provided in
Section 5.01, the sole remedy of the Issuer, the Indenture Trustee, the Insurer
or the Noteholders with respect to a breach of the Seller's representations and
warranties pursuant to Section 2.02 shall be to require the Seller to repurchase
Contracts pursuant to this Section; provided that the Seller shall indemnify the
Owner Trustee, the Indenture Trustee, the Insurer, the Issuer and the
Noteholders 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 2.04. Custody of Contract Files.
(a) Duties of Custodian. The Custodian shall or shall cause any
agent acting on its behalf to:
(i) maintain or cause to be maintained continuous custody of the
Contract Documents in secure and fire resistant facilities in accordance
with customary standards for such custody. Such Contract Documents shall
be electronically segregated to show the Issuer as owner thereof and the
Indenture Trustee as the pledgee thereof, unless the Insurer has waived
the requirement for such segregation by notice in writing to the Indenture
Trustee, the Custodian and the Servicer.
(ii) to the extent the Servicer directs the Custodian in writing,
pursuant to a Request for Release of Documents, deliver or cause to be
delivered certain specified Contract Documents to the Servicer to enable
the Servicer to service the Contracts pursuant to this Agreement. At such
time as the Servicer returns such Contract Documents to the Custodian or
its agent, the Servicer shall provide written notice of such return to the
Custodian. The Custodian or its agent shall acknowledge receipt of the
returned materials by signing the Servicer's notice and shall promptly
send copies of such acknowledgment or receipt to the Servicer; provided,
however, prior to the release of any Contract to the Servicer, such
original Contract shall be stamped to indicate that such Contract has been
sold to ANRC Auto Owner Trust 1999-A and is subject to a first priority
perfected security interest of The Chase Manhattan Bank, as Indenture
Trustee, on behalf of the Noteholders and MBIA Insurance Corporation;
provided, further, however, that if a Servicer Default shall have
occurred, no part of the Contract Documents shall be released by the
Custodian to the Servicer without the Insurer's prior written consent,
which
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may be evidenced by the Insurer's execution of the Request for Release of
Documents. Except as provided above, no part of the Contract Documents
shall be delivered by the Custodian to the Seller, the Servicer, the
Originator or otherwise released from the possession of the Custodian,
except upon the written consent or direction of the Insurer and the
Indenture Trustee.
(iii) upon reasonable prior written notice, and without charge,
permit the Noteholders, the Servicer, the Issuer, the Indenture Trustee
and the Insurer to examine the Contract Files and Contract Documents in
the possession, or under the control, of the Custodian or its agent.
(iv) at its own expense, maintain or cause to be maintained at all
times while acting as Custodian, and keep in full force and effect (A)
fidelity insurance, (B) theft of documents insurance, (C) fire insurance,
and (D) forgery insurance. All such insurance shall be in amounts, with
standard coverage and subject to deductibles, as are customary for similar
insurance typically maintained by banks that act as custodian in similar
transactions.
(v) perform its duties as custodian in accordance with the terms of
this Agreement and applicable law, and to the extent consistent with such
terms, in the same manner in which, and with the same care, skill,
prudence and diligence with which, it administers files for other
portfolios, if any, giving due consideration to customary and usual
standards of practice of prudent custodians. The Custodian shall promptly
report to the Indenture Trustee, the Owner Trustee and the Insurer any
failure by it to hold the complete set of Contract Documents for each
Contract as herein provided and shall promptly take appropriate action to
remedy such failure.
(vi) with respect to the Contract Documents (A) act as the Custodian
exclusively for the benefit of the Indenture Trustee, (B) acknowledge on
the Closing Date and pursuant to Section 2.04(c) that it is holding each
of the Contract Documents in respect of each of the Contracts (except as
otherwise noted on the certificate given to the Insurer and the Indenture
Trustee), (C) hold such Contract Documents for the exclusive use and
benefit of the Indenture Trustee on behalf of the Noteholders and the
Insurer and (D) maintain accurate records pertaining to each Contract to
enable it to comply with terms hereof and to maintain a current inventory
thereof.
(vii) not have and will not assert any beneficial ownership interest
in the Contracts or the Contract Documents.
(viii) agree that the Contract Documents shall be maintained at
World Omni Financial Corp.'s offices located at 3120 Rider Trail South,
Earth
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City, MO 63045 or at such of its other offices as the Custodian shall
designate from time to time after giving the Custodian, the Originator,
the Servicer, the Issuer, the Insurer and the Indenture Trustee 60 days'
prior written notice, which office shall be maintained separate from the
offices of AutoNation Financial Services, the Servicer and the Seller and
shall be at all times under the dominion and control of the Custodian.
Prior to any change in the location of the Contract Documents, the
Servicer shall deliver to the Trust, the Indenture Trustee and the Insurer
an Opinion of Counsel regarding the perfection, under the laws of the
state where the Contract Documents will be maintained based upon
possession, of the Indenture Trustee's first priority security interest in
the Contracts and proceeds thereof and stating that in the opinion of such
counsel, all actions necessary fully to preserve and protect the interest
of the Trust, the Indenture Trustee, the Noteholders and the Insurer in
the Contracts, the related Financed Vehicles and the proceeds thereof have
been taken and reciting the details thereof.
(b) Appointment of Custodian. As of the Closing Date, AutoNation
Financial Services, as initial Servicer, shall be the Custodian of the Contract
Documents; provided that upon the execution by the Indenture Trustee (or, if the
Notes have been paid in full and the Indenture has been satisfied and
discharged, the Issuer) of a letter agreement with the prior written consent of
the Insurer (such consent not to be unreasonably withheld) revocably appointing
another entity acceptable to the Insurer as agent of and bailee for the
Indenture Trustee (or, if applicable, the Trust) to act as Custodian (such
Person, the "Successor Custodian") of the Contract Documents, such Successor
Custodian shall be so appointed and shall from the effective date of such
agreement retain custody of the Contract Documents and any and all other
documents relating to a Contract or the related Obligor or Financed Vehicle. On
or prior to the effective date of any such appointment, the Contract Documents
and any and all other documents relating to a Contract or the related Obligor or
Financed Vehicle will be delivered by the predecessor Custodian to the Successor
Custodian in its capacity as agent of and bailee for the Indenture Trustee (or,
if applicable, the Trust). The Custodian may delegate or subcontract out its
duties as Custodian hereunder to an entity acceptable to the Insurer; provided
that no such delegation or subcontract arrangement shall relieve the Custodian
of its duties and obligations hereunder. The Indenture Trustee, the Seller and
the Insurer hereby consent to the delegation by the initial Custodian of its
duties and obligations to World Omni Financial Corp., as agent of the Custodian.
(c) Certification.
(i) Within 90 days of the Closing Date, the Custodian shall
ascertain that all Contract Documents for each Contract are in its
possession or in the possession of its designated agent, and shall deliver
to the Issuer, the
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Indenture Trustee and the Insurer a certification to the effect that, as
to each Contract Document listed in Schedule A (other than any Contract
paid in full or any Contract specifically identified in such certification
as not covered by such certification): (i) all of the Contract Documents
in respect of each such Contract are in its possession or the possession
of its designated agent and (ii) such Contract Documents have been
reviewed by it and appear regular on their face and relate to such
Contract. In making this certification, the Custodian shall separately
list those Contracts for which an original certificate of title was not
found in the relevant Contract Documents. In addition, the Custodian
shall, within 180 days after the Closing Date, deliver to the Issuer, the
Indenture Trustee and the Insurer a certification (the "Second
Certification"), to the effect that, as to each such set of Contract
Documents that did not include an original certificate of title in the
initial certification (other than any Contract paid in full or any
Contract specifically identified in such certification as not covered by
such certification): (i) all of the Contract Documents in respect of each
such Contract are in its possession and (ii) such Contract Documents have
been reviewed by it and appear regular on their face and relate to such
Contract.
(ii) If the Custodian or its agent, during the process of reviewing
the Contract Documents, pursuant to this Section 2.04, finds any Contract
Document which is not executed, has not been received, is unrelated to the
Contract identified in Schedule A, or does not conform to the requirements
of clause (i) above or the loan number set forth in Schedule A, then the
Custodian or its agent appointed in accordance with this Section 2.04
shall promptly so notify the Issuer, the Servicer, the Insurer and the
Indenture Trustee in writing of such discovery.
(iii) The Servicer will use reasonable efforts to remedy a material
defect in a Contract Document or omission of a Contract Document of which
it is so notified by the Custodian or its agent as set forth above. If,
however, within 15 days after the initial Custodian's certification in
respect of such defect or omission (other than a defect or omission in
respect of a certificate of title) or within 15 days after the Second
Certification in respect of a defect or omission as to a certificate of
title, the Servicer has not remedied or caused the Seller to remedy such
defect or omission, the Servicer shall give notice to the Indenture
Trustee of the date and Purchase Amount in respect of any affected
Contract and, on the next succeeding Servicer Report Date, cause the
Seller to repurchase such Contract, which Purchase Amount shall be
deposited into the Collection Account.
(d) Indemnification. The Custodian will indemnify the Trust, the
Insurer, the Owner Trustee and the Indenture Trustee and each of their
respective officers, directors, employees and agents for any and all
liabilities, obligations, losses,
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compensatory damages, payments, costs or expenses of any kind whatsoever that
may be imposed upon, incurred by or asserted against the Trust, the Owner
Trustee or the Indenture Trustee or any of their respective officers, directors,
employees or agents as the result of negligence, lack of good faith or wilful
misconduct on the part of the Custodian or its agent relating to the maintenance
and custody of the Contract Documents as Custodian thereof; provided, however,
that the Custodian shall not be liable to the Owner Trustee, the Indenture
Trustee or any such officer, director, employee or agent of the Owner Trustee or
the Indenture Trustee for any portion of any such amount resulting from the
wilful misfeasance, bad faith or negligence of the Owner Trustee or the
Indenture Trustee, as the case may be, or of any such officer, director,
employee or agent of the Owner Trustee or the Indenture Trustee, as the case may
be.
Indemnification under this subsection shall survive the resignation
or removal of the Custodian or the termination of this Agreement and shall
include reasonable fees and expenses of counsel and expenses of litigation. If
the Custodian shall have made any indemnity payments pursuant to this subsection
and the Person to or on behalf of whom such payments are made thereafter
collects any of such amounts from others, such Person shall promptly repay such
amounts to the Custodian, without interest, to the extent such Person received
more than the indemnity payable pursuant to the Basic Documents.
SECTION 2.05. Duties of Servicer Relating to the Contracts.
(a) Safekeeping. The Servicer, in its capacity as servicer, shall
hold or cause to be held the Contract Files and any Contract Documents held by
it in accordance with this Agreement on behalf of the Issuer, the Indenture
Trustee and the Insurer for the use and benefit of all present and future
Noteholders, and shall maintain such accurate and complete accounts, records and
computer systems pertaining to each Contract File as shall enable the Servicer
and Issuer to comply with this Agreement. In performing its duties as servicer,
the Servicer shall act with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to the files relating to all
comparable automobile contracts that the Servicer owns or services for itself or
others. The Servicer shall (i) conduct, or cause to be conducted, periodic
physical inspections of the Contract Files (and the Contract Documents, if the
Servicer is acting as Custodian) held by it or its agents under this Agreement
and of the related accounts, records and computer systems; (ii) maintain or
cause to be maintained the Contract Files (and the Contract Documents, if the
Servicer is acting as Custodian) in such a manner as shall enable the Issuer,
the Indenture Trustee and the Insurer to verify the accuracy of the Servicer's
record keeping; (iii) promptly report to the Issuer, the Indenture Trustee and
the Insurer any failure on its part or the part of its agents to hold the
Contract Files (and the Contract Documents, if the Servicer is acting as
Custodian) and maintain its accounts, records and computer systems as herein
provided and (iv) promptly take appropriate action to remedy any such failure.
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(b) Maintenance of and Access to Records. The Servicer shall
maintain or cause to be maintained each Contract File (other than the Contract
Documents, unless the Servicer is acting as Custodian) at the address of the
Servicer or its agents set forth in Section 9.04, or at such other location as
shall be specified to the Issuer, the Indenture Trustee and the Insurer by 30
days' prior written notice. The Servicer shall permit the Issuer, the Indenture
Trustee and the Insurer or their respective duly authorized representatives,
attorneys or auditors to inspect the Contract Files and the related accounts,
records and computer systems maintained by the Servicer at such times as such
Persons may request.
(c) Release of Documents. If the Servicer is acting as Custodian
pursuant to Section 2.04, upon instruction from the Indenture Trustee (a copy of
which shall be furnished to the Issuer and the Insurer), the Servicer shall
release or cause to be released any document in the Contract Files to the
Indenture Trustee, the Indenture Trustee's agent, or the Indenture Trustee's
designee, as the case may be, at such place or places as the Indenture Trustee
may designate, as soon as practicable.
(d) Monthly Reports. On each Servicer Report Date, commencing with
the month next succeeding the month of the Closing Date, the Servicer shall
deliver to the Issuer, the Indenture Trustee and the Insurer a certificate of a
Servicing Officer stating (i) the number of Contracts and aggregate outstanding
principal balance of such Contracts that have become Defaulted Contracts since
the Business Day immediately preceding the date of the last statement delivered
pursuant to this subsection (or since the Closing Date in the case of the first
such statement); (ii) that, if such Contract has been the subject of a Full
Prepayment pursuant to clause (a) of the definition of the term "Full
Prepayment", all proceeds received in respect thereof have been deposited in or
credited to the Collection Account in accordance with Section 4.02; (iii) that,
if such Contract has been the subject of a Full Prepayment pursuant to clause
(b) of the definition of the term "Full Prepayment", the correct Purchase Amount
or termination price, as applicable, has been deposited in or credited to the
Collection Account in accordance with Section 2.03, 3.06, 4.02 or 8.01; and (iv)
that the Indenture Trustee is authorized to release such Contract and the
related Contract Documents as provided herein.
On each Servicer Report Date, the Servicer shall also deliver to the
Indenture Trustee, the Owner Trustee and the Insurer a statement setting forth
(i) the amounts on deposit in the Collection Account; (ii) the sources of such
amounts; (iii) the amounts to be paid to Noteholders;
(e) Schedule of Title Documents. The Servicer shall deliver to the
Indenture Trustee, the Issuer and the Insurer (i) within 60 days of the Closing
Date, a schedule of Title Documents for Financed Vehicles which, as of the
Closing Date, did
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not show AutoNation Financial Services as first lienholder and (ii) within 180
days of the Closing Date, as to the Contracts, a schedule of Title Documents for
Financed Vehicles which, as of the date prior to such delivery, do not show
AutoNation Financial Services as first lienholder and as to which the Seller is
obligated to repurchase pursuant to the provisions hereof.
(f) Electronic Marking of Contracts; Possession. The Servicer shall
cause the electronic record of the Contracts maintained by it to be clearly
marked to indicate that the Contracts have been sold to the Issuer and pledged
to the Indenture Trustee and shall not in any way assert or claim an ownership
interest in the Contracts. It is intended that pursuant to the applicable
provisions of Sections 2.04 and 2.05, the Custodian on behalf of the Indenture
Trustee and the Insurer shall be deemed to have possession of the Contract
Documents for purposes of Section 9-305 of the UCC of the state in which the
Contract Documents are located.
(g) Transfer and Delivery of Contract Documents. Following the
occurrence of a Non-Servicer Default, the Insurer may instruct the Servicer and
the Custodian to transfer and deliver and the Servicer and the Custodian shall
transfer and deliver, the Contract Documents to the Indenture Trustee or a
Successor Custodian. The Servicer and the predecessor Custodian shall pay all
costs and expenses of any such transfer of the Contract Documents.
SECTION 2.06. Instructions; Authority to Act.
The Servicer shall be deemed to have received proper instructions (a
copy of which shall be furnished to the Issuer and the Insurer) with respect to
the Contract Files upon its receipt of written instructions signed by a
Responsible Officer of the Indenture Trustee.
SECTION 2.07. Indemnification.
Subject to Section 7.02, the Servicer shall indemnify the Issuer,
the Owner Trustee, the Indenture Trustee, the Insurer, the Custodian and the
Noteholders for any and all liabilities, obligations, losses, compensatory
damages, payments, costs or expenses of any kind whatsoever (including the
reasonable fees and expenses of counsel) that may be imposed on, incurred by or
asserted against the Issuer, the Owner Trustee, the Indenture Trustee, the
Insurer, the Custodian or the Noteholders as the result of any improper act or
omission in any way relating to the maintenance and custody by the Servicer of
the Contract Files or the Contract Documents or the failure of the Servicer to
perform its duties and service the Contracts in compliance with the terms of
this Agreement; provided that the Servicer shall not be liable to the Owner
Trustee, the Indenture Trustee, the Custodian or the Insurer for any portion of
any such
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amount resulting from the willful misfeasance, bad faith or negligence of the
Owner Trustee, the Indenture Trustee, the Custodian or the Insurer,
respectively.
SECTION 2.08. Effective Period and Termination.
The appointment of the initial Servicer as Custodian shall become
effective as of the Closing Date and shall continue in full force and effect
until the earlier of (i) the removal of the initial Servicer as Custodian or
(ii) the termination of this Agreement. If AutoNation Financial Services shall
subsequently resign as Servicer in accordance with the terms of this Agreement
or if all of the rights and obligations of the Servicer shall have been
terminated pursuant to Section 7.01, any appointment of the Servicer as
Custodian may be terminated by the Insurer, or if an Insurer Default has
occurred and is continuing, by the holders of Notes evidencing not less than 25%
of the Outstanding Principal Amount of the Notes, acting together as a single
class, or by the Indenture Trustee. As soon as practicable after any termination
of such appointment, the Servicer shall, at the Servicer's expense, deliver or
cause the delivery of all Contract Documents and all Contract Files (including
those held in microfiche or electronic form) to the Indenture Trustee or its
agent (or, if the Indenture has been satisfied and discharged, as directed by
the Trust, with the consent of the Issuer) at such place or places as the
applicable party may reasonably designate and shall cooperate in good faith to
effect such delivery. The foregoing notwithstanding, if the Servicer is acting
as Custodian, the Servicer shall, at the request of the Insurer, deliver the
Contract Documents to the Indenture Trustee in the event that such delivery is
required by any Rating Agency to consider the Securities investment grade
without consideration of the Insurance Policy.
SECTION 2.09. Nonpetition Covenant.
(a) None of the parties hereto shall petition or otherwise invoke
the process of any court or government authority for the purpose of commencing
or sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.
(b) The parties hereto shall not, nor cause the Seller to, petition
or otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Seller under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Seller.
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SECTION 2.10. Collecting Title Documents Not Delivered at the
Closing Date.
In the case of any Contract in respect of which, in place of a Title
Document, the Custodian received on or before the Closing Date written evidence
from the Dealer selling the related Financed Vehicle, or from AutoNation
Financial Services, that the Title Document for such Financed Vehicle showing
AutoNation Financial Services as first lienholder has been applied for from the
Registrar of Titles, the Servicer shall use its best efforts to collect such
Title Document from the Registrar of Titles as promptly as possible. If such
Title Document showing AutoNation Financial Services as first lienholder is not
received by the Servicer within 180 days after the Closing Date with respect to
the Contracts, then the representation and warranty in Section 2.02(b)(iii) as
to such Contracts in respect of such Contract shall be deemed to have been
incorrect in a manner that materially and adversely affects the Noteholders, and
the Seller shall be obligated to repurchase such Contract in accordance with
Section 2.03.
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ARTICLE III
ADMINISTRATION AND SERVICING OF CONTRACTS
SECTION 3.01. Duties of Servicer.
The Servicer, for the benefit of the Indenture Trustee and the
Insurer, shall manage, service, administer, and make collections on the
Contracts and perform such other actions required of the Servicer under this
Agreement. The Servicer agrees that its servicing of the Contracts shall be
carried out in accordance with reasonable care consistent with customary and
usual procedures employed by institutions that service motor vehicle retail
installment contracts and, to the extent more exacting, the Collection Policy;
provided that, subject to Section 3.02 as to extensions, the Servicer shall not
release or waive the right to collect the unpaid balance of any Contract unless
the Insurer has provided its prior written consent. The Servicer's duties shall
include, without limitation, collection and posting of all payments, responding
to inquiries of Obligors on the Contracts, investigating delinquencies, sending
payment coupons to Obligors, reporting tax information to Obligors, monitoring
the Trust Property, accounting for collections, furnishing monthly and annual
statements to the Indenture Trustee, the Issuer and the Insurer with respect to
distributions and the preparation of tax forms required by any federal, state or
local tax authority, if any. The Servicer shall have, subject to the terms
hereof and consistent with its Collection Policy, full power and authority,
acting alone, and subject only to the specific requirements and prohibitions of
this Agreement, to do any and all things in connection with such managing,
servicing, administration, and collection of the Contracts that it may deem
necessary or desirable. Without limiting the generality of the foregoing, but
subject to the provisions of this Agreement, the Servicer is authorized and
empowered by the Indenture Trustee and the Issuer to execute and deliver, on
behalf of itself, the Issuer, the Noteholders, the Indenture Trustee or any of
them, any and all instruments of satisfaction or cancellation, or partial or
full release or discharge, and all other comparable instruments, with respect to
the Contracts or to the Financed Vehicles; provided, however, that
notwithstanding the foregoing, the Servicer shall not, except pursuant to an
order from a court of competent jurisdiction or with the prior written consent
of the Insurer, release an Obligor from payment of any unpaid amount due under
any Contract or reduce the related APR. The Issuer shall furnish to the Servicer
any documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer may engage agents
and subservicers to fulfill its duties hereunder with the prior written consent
of the Insurer and pursuant to a subservicing agreement acceptable to the
Insurer. Unless the Insurer provides its prior written consent, the Servicer, so
long as the Servicer is AutoNation Financial Services, shall at all times
contract with a Subservicer acceptable to the Insurer to service the Contracts.
World Omni Financial Corp. is an acceptable Subservicer to the Insurer. The
Servicer may not terminate or consent to any assignment of servicing by,
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any Subservicer, with respect to the Contracts, without the Insurer's prior
written consent, and following the occurrence of a Non-Servicer Default, shall,
at the written direction of the Insurer, terminate such Subservicer. All amounts
payable to any Subservicer shall be paid by the Servicer and shall not be
obligations of the Issuer or paid from the Trust Property. In addition, the
Servicer shall pay all costs and expenses (including, without limitations,
reasonable fees and expenses of counsel) associated with the transfer of
subservicing from the existing Subservicer to a successor. The Servicer may also
at any time perform through agents or subcontractors the specified duties of (i)
repossession and subsequent sale of Financed Vehicles and (ii) pursuing
collection of deficiency balances on certain Defaulted Contracts, in each case
without the prior written consent of the Insurer; provided that any such agent
or subcontractor shall be required at all times to act in accordance with the
Collection Policy. No such delegation or engagement of agents, subservicers or
subcontractors by the Servicer shall relieve the Servicer of its
responsibilities with respect to any of its duties hereunder.
On or prior to the Closing Date, the Servicer shall deliver to the
Owner Trustee, the Indenture Trustee and the Insurer a list of Servicing
Officers of the Servicer involved in, or responsible for, the administration and
servicing of the Contracts, which list shall from time to time be updated by the
Servicer at the request of the Owner Trustee, the Indenture Trustee or the
Insurer.
On the Closing Date, the Servicer shall deposit in the Collection
Account: (i) all installments of each Monthly Scheduled Payment due after the
Cut-Off Date and received by the Servicer at least two Business Days prior to
the Closing Date; (ii) the proceeds of each Full Prepayment pursuant to clause
(a) of the definition thereof of any Contract and all partial prepayments on
Contracts received by the Servicer after the Cut-Off Date and at least two
Business Days prior to the Closing Date; and (iii) all Net Liquidation Proceeds
and Net Insurance Proceeds received with respect to a Financed Vehicle to which
a Contract relates received after the Cut-Off Date and at least two Business
Days prior to the Closing Date.
The Servicer shall deposit in or credit to the Collection Account
within two Business Days of receipt (i) all collections of Monthly Scheduled
Payments due after the Cut-Off Date and received by it, together with the
proceeds of all Full Prepayments pursuant to clause (a) of the definition
thereof on all Contracts and all partial prepayments on all Contracts, and any
accompanying interest; (ii) all Net Liquidation Proceeds and Net Insurance
Proceeds; (iii) all Purchase Amounts received or payable by the Servicer;
provided such amounts shall be remitted no later than as required by Section
4.02 and (iv) any amounts received as a result of the Servicer exercising its
rights under certain circumstances to purchase all of the Contracts. The
foregoing requirements for deposit in the Collection Account are exclusive, it
being understood that collections in the nature of late payment charges,
extension fees and
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similar charges or fees may, but need not be deposited in the Collection Account
and shall be retained by the Servicer as additional servicing compensation.
In order to facilitate the servicing of the Contracts by the
Servicer, the Servicer shall retain, subject to and only to the extent permitted
by the provisions of this Agreement, all collections on the Contracts prior to
the time they are remitted or credited, in accordance with such provisions, to
the Collection Account. The Servicer acknowledges that the unremitted
collections on the Contracts are part of the Trust Property and the Servicer
agrees to act as custodian and bailee of the Indenture Trustee, the Issuer and
the Insurer in holding such monies and collections. The Servicer agrees, for the
benefit of the Indenture Trustee, the Issuer, the Noteholders and the Insurer,
to act as such custodian and bailee, and to hold and deal with such monies and
such collections, in trust as custodian and bailee for the Indenture Trustee,
the Issuer and the Insurer, in accordance with the provisions of this Agreement.
The Servicer shall retain all data (including, without limitation,
computerized title records) relating directly to or maintained in connection
with the servicing of the Contracts at the address of the Custodian or its agent
set forth in Section 9.04 or, upon 15 days' prior written notice to the Issuer,
the Indenture Trustee and the Insurer, at such other place where the servicing
offices of the Servicer are located, and shall give the Issuer, the Indenture
Trustee and the Insurer access to all data (including, without limitation,
computerized title records, documentation and personnel having knowledge of such
documentation or software in such cases where the Indenture Trustee acts as
Successor Servicer) at all reasonable times and, while a Servicer Default shall
be continuing, the Servicer shall, on demand of the Indenture Trustee or the
Insurer deliver or cause to be delivered to the Indenture Trustee or the
Insurer, as the case may be, all data (including, without limitation,
computerized title records and, to the extent transferable, related operating
software) necessary for the servicing of the Contracts and all monies collected
by it and required to be deposited in or credited to the Collection Account.
All deposits made by the Servicer in any Trust Account shall be made
in immediately available funds.
The Administrator shall be responsible for the payment of the fees
and expenses of the Indenture Trustee and the Owner Trustee; provided that any
Indenture Trustee Fee or Owner Trustee Fee not paid as of a Distribution Date
shall be paid as provided in Section 4.03(a)(ii).
SECTION 3.02. Collection of Contract Payments.
Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall make reasonable efforts to collect all
payments called
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for under the terms and provisions of the Contracts as and when the same shall
become due and shall use its reasonable efforts to cause each Obligor to make
all payments in respect of his or her Contract to the Servicer. Consistent with
the foregoing, the Servicer may, on a case-by-case basis, in its discretion (i)
waive any late payment charges in connection with delinquent payments on a
Contract, (ii) waive any prepayment charges or (iii) grant an extension in order
to work out a default or an impending default; provided that following the
extension there will have been no more than two extensions of the related
Contract in the last 12 months and the sum of the terms of all extensions of the
Contract does not exceed six months. The Servicer shall not extend the Maturity
Date of a Contract except as provided in clause (iii) of the preceding sentence.
Except as explicitly permitted by this paragraph, the Servicer shall not change
any material term of a Contract, including but not limited to the interest rate,
the payment amounts or due dates, or the property securing such Contract unless
the Insurer has provided prior written consent.
SECTION 3.03. Realization upon Defaulted Contracts.
The Servicer shall use its best efforts, consistent with the
Servicing Standards and Section 3.01, to repossess or otherwise convert the
ownership of the Financed Vehicle securing any Contract as to which no
satisfactory arrangements can be made for collection of delinquent payments.
Such servicing procedures may include reasonable efforts to realize upon any
recourse to Dealers and selling the Financed Vehicle at public or private sale.
In connection with such repossession or other conversion, the Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual for prudent holders of retail installment sales
contracts and as shall be in compliance with all applicable laws, and, in
connection with the repossession of any Financed Vehicle or any contract in
default, may commence and prosecute any proceedings in respect of such Contract
in its own name or, if the Servicer deems it necessary, in the name of the
Issuer or the Indenture Trustee or on behalf of the Issuer or the Indenture
Trustee. The Servicer's obligations under this Section 3.03 are subject to the
provision that, in the case of damage to a Financed Vehicle from an uninsured
cause, the Servicer shall not expend its own funds in repairing such motor
vehicle unless it shall determine (i) that such restoration will increase the
proceeds of liquidation of the related Contract, after reimbursement to itself
for such expenses and (ii) that such expenses will be recover able by it either
as Liquidation Expenses or as expenses recoverable under an applicable insurance
policy. The Servicer shall be responsible for all other costs and expenses
incurred by it in connection with any action taken in respect of a Defaulted
Contract; provided that it shall be entitled to reimbursement of such costs and
expenses to the extent they constitute Liquidation Expenses or expenses
recoverable under an applicable insurance policy. All Net Liquidation Proceeds
and Net Insurance Proceeds shall be deposited directly in or credited to the
Collection Account (without deposit in any intervening account) to the extent
required by Section 4.02.
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SECTION 3.04. Maintenance of Security Interests in Financed
Vehicles.
(a) The Servicer shall take such steps as are necessary to maintain
continuous perfection and priority of the security interest created by each
Contract in the related Financed Vehicle, including but not limited to,
obtaining the execution by the related Obligor and the recording, registering,
filing, re-recording, re-registering, and refiling of all security agreements,
financing statements, continuation statements or other instruments as are
necessary to maintain the security interest granted by such Obligor under each
respective Contract. The Issuer and the Indenture Trustee each hereby authorize
the Servicer to take such steps as are necessary to re-perfect such security
interest on behalf of the Issuer in the event of the relocation of a Financed
Vehicle or for any other reason. In the event that the assignment of a Contract
to the Issuer and the subsequent pledge thereof by the Issuer to the Indenture
Trustee is insufficient, without a notation on the related Financed Vehicle's
certificate of title, or without fulfilling any additional administrative
requirements under the laws of the state in which the Financed Vehicle is
located, to grant to the Issuer a perfected security interest in the related
Financed Vehicle and to pledge such perfected security interest to the Indenture
Trustee, the initial Servicer hereby agrees that the identification of
AutoNation Financial Services as the secured party on the Title Document is
deemed to be in its capacity as agent of the Indenture Trustee and further
agrees to hold such Title Document as the Indenture Trustee's agent and
custodian; provided that, except as provided in subsection (b) of this Section
3.04 and the Insurance Agreement, neither the Servicer nor AutoNation Financial
Services shall make, nor shall the Issuer or Noteholders have the right to
require that the Servicer or AutoNation Financial Services make, any such
notation on the related Financed Vehicles' Title Document or fulfill any such
additional administrative requirement of the laws of the state in which a
Financed Vehicle is located.
(b) The Seller, the Indenture Trustee, the Owner Trustee, the
Servicer and the Issuer hereby agree that upon the occurrence of a Non-Servicer
Default, the Insurer may direct the Servicer to take or to cause to be taken
such action as may, in the Insurer's discretion, be necessary to perfect or
re-perfect the security interest in the Financed Vehicles in the name of the
Indenture Trustee, including the amending of the Title Documents of the Financed
Vehicles and the Indenture Trustee agrees to execute any and all documents or
instruments prepared by and at the expense of the Servicer in this regard. The
Servicer hereby agrees to pay all expenses related to such perfection or
reperfection, and the Servicer and the Indenture Trustee hereby agree to take
all action necessary therefor. If such expenses are not paid within 30 days
after delivery of any invoice for such expenses to the Servicer, such expenses
shall be paid pursuant to Section 4.03(a)(x). The Insurer, in its sole
discretion, may
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pay such costs and any such amounts shall be included in amounts owed to the
Insurer as Reimbursement Amounts.
SECTION 3.05. Covenants, Representations and Warranties of Servicer.
The Servicer hereby makes the following covenants, representations
and warranties on which (i) the Issuer and the Indenture Trustee are deemed to
have relied in acquiring the Contracts and (ii) the Insurer is deemed to have
relied in issuing the Insurance Policy. Such covenants, representations and
warranties speak as of the execution and delivery of this Agreement and as of
the Closing Date, but shall survive the sale, transfer and assignment of the
Contracts to the Issuer and the pledge thereof to the Indenture Trustee pursuant
to the Indenture.
(a) The Servicer covenants as to the Contracts:
(i) The Financed Vehicle securing each Contract shall not be
released from the lien granted by the Contract in whole or in part, except
as contemplated herein.
(ii) The Servicer shall not impair the rights of the Noteholders or
the Insurer in the Contracts or the other Trust Property.
(iii) The Servicer shall not increase the number of payments under a
Contract, nor increase the amount financed under a Contract, nor extend,
forgive payments on a Contract or otherwise amend the terms of any
Contract, except as provided in Section 3.02 and the Servicer shall not
amend in any materially adverse respect, the Collection Policy without the
Insurer's prior written consent.
(iv) The Servicer shall not consent to the sale or transfer by an
Obligor of any Financed Vehicle unless the original Obligor under the
related Contract remains liable under such Contract and the transferee
assumes all of the Obligor's obligations thereunder and upon doing so the
credit profile with respect to such Obligor will not be changed from
adequate to speculative by virtue of the addition of the transferee's
obligation thereunder.
(v) The Servicer shall not (A) create, incur or suffer to exist, or
agree to create, incur or suffer to exist, or consent to or permit in the
future (upon the occurrence of a contingency or otherwise) the creation,
incurrence or existence of any Lien on or restriction on transferability
of any Contract except for the Lien of the Indenture and the restrictions
on transferability imposed by this Agreement or (B) sign or file any UCC
financing statements with respect
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to the Trust Property, in any jurisdiction that names AutoNation Financial
Services, the Servicer or the Depositor as debtor other than those
financing statements executed and filed in connection with the Basic
Documents to create or maintain the first priority perfected security
interest of the Indenture Trustee in the Trust Property, or sign any
security agreement authorizing any secured party thereunder to file any
financing statements with respect to the Trust Property, other than the
Basic Documents.
(b) The Servicer represents and warrants as of the Closing Date:
(i) The Servicer (1) is duly organized, is validly existing and in
good standing as a corporation organized and existing under the laws of
the State of Delaware, (2) is qualified to do business as a foreign
corporation, is in good standing in each jurisdiction where the character
of its properties or the nature of its activities makes such qualification
necessary, and (3) has full power, authority and legal right to own its
property, to carry on its business as presently conducted, and to enter
into and perform its obligations under this Agreement and the other Basic
Documents to which it is a party.
(ii) The execution, delivery and performance by the Servicer of this
Agreement and the other Basic Documents to which it is a party are within
the corporate power of the Servicer and have been duly authorized by all
necessary corporate action on the part of the Servicer. Neither the
execution, delivery and performance of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with
the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental
rule, regulation, judgment, decree or order binding on the Servicer or its
properties or the Certificate of Incorporation or By-laws of the Servicer,
or any of the provisions of any indenture, mortgage, contract 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, charge or encumbrance
upon any of its property pursuant to the terms of any such indenture,
mortgage, contract or other instrument.
(iii) Other than consents, licenses, approvals and authorizations
and registrations or declarations that have been obtained prior to the
Closing Date, 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.
(iv) This Agreement and the other Basic Documents to which it is a
party have been duly executed and delivered by the Servicer and, assuming
the
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due authorization, execution and delivery hereof by the Issuer, the Seller
and the Indenture Trustee, this Agreement and the other Basic Documents to
which it is a party constitute the legal, valid and binding obligations of
the Servicer enforceable against the Servicer in accordance with their
respective terms (subject to applicable bankruptcy and insolvency laws and
other similar laws affecting the enforcement of creditors' rights
generally).
(v) There are no actions, suits or proceedings pending or, to the
knowledge of the Servicer, threatened against or affecting the Servicer,
before or by any court, administrative agency, arbitrator or governmental
body with respect to any of the transactions contemplated by this
Agreement and the other Basic Documents, or which may be reasonably
expected, if determined adversely to the Servicer, to materially and
adversely affect it or its business, assets, operations or condition,
financial or otherwise, or materially and adversely affect the Servicer's
ability to perform its obligations under this Agreement and the other
Basic Documents. The Servicer is not in default with respect to any order
of any court, administrative agency, arbitrator or govern mental body so
as to materially and adversely affect the transactions contemplated by the
above-mentioned documents.
(vi) The Servicer has obtained or made all necessary consents,
approvals, waivers and notifications of creditors, lessors and other
nongovernmental persons, in each case, in connection with the execution
and delivery of this Agreement and the other Basic Documents to which it
is a party, and the consummation of all the transactions herein
contemplated.
SECTION 3.06. Purchase of Contracts upon Breach by Servicer; Third
Party Claims.
The Servicer or the Issuer shall inform the other party and the
Indenture Trustee and the Insurer promptly, in writing, upon the discovery of
any breach of the representations and warranties set forth in Section 3.05(b) or
of the covenants set forth in Sections 3.02, 3.04 or 3.05(a); provided, however,
failure to give notice shall not affect any obligation of the Servicer under
this Section 3.06. Unless the breach shall have been cured within 30 days
following such discovery or receipt of notice of such breach, the Servicer shall
purchase any Contract if such breach materially and adversely affects the
interests of the Issuer, the Indenture Trustee, the Owner Trustee, the
Noteholders or the Insurer in the Contract. As consideration for the Contract,
the Servicer shall remit the Purchase Amount on the Business Day preceding the
Servicer Report Date next succeeding the end of such 30-day cure period in the
manner specified in Section 4.02(a). The sole remedy of the Issuer, the
Indenture Trustee, or the Noteholders with respect to a breach of Section 3.02,
3.04 or 3.05(a), if such obligation is fulfilled, shall be to require the
Servicer to purchase Contracts pursuant to
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this Section 3.06; provided that the Servicer shall indemnify the Owner Trustee,
the Indenture Trustee, the Insurer, the Issuer, the Custodian and the
Noteholders 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; provided, further, that, the
Servicer's failure to repurchase or indemnify in accordance with this Section
3.06 shall be a Servicer Default pursuant to Section 7.01.
The Servicer shall (i) immediately notify the Issuer, the Insurer
and the Indenture Trustee if a claim is made by a third party with respect to
the Contracts, (ii) assume, with the consent of the Issuer, the Indenture
Trustee and the Insurer, the defense of any such claim, (iii) pay all expenses
in connection therewith, including counsel fees, and (iv) promptly pay,
discharge and satisfy any judgment or decree which may be entered with respect
to such claim against the Servicer, the Issuer, the Owner Trustee, the Indenture
Trustee, the Insurer, the Custodian or the Noteholders.
If the Indenture Trustee is the Successor Servicer it shall not be
obligated to purchase Contracts pursuant to this Section 3.06.
SECTION 3.07. Servicing Compensation.
As compensation for the performance of its obligations under this
Agreement and subject to the terms of this Section 3.07, the Servicer shall be
entitled to receive on each Distribution Date the Servicing Fee in respect of
each Contract that was Outstanding at the beginning of the Collection Period
ending immediately prior to such Distribution Date; provided that with respect
to the first Distribution Date the Servicer will be entitled to receive the
Servicing Fee in respect of each Contract that was Outstanding as of the Cut-Off
Date. As servicing compensation in addition to the Servicing Fee, the Servicer
shall be entitled to retain all late payment charges, extension fees and similar
items paid in respect of Contracts. The Servicer shall pay all expenses incurred
by it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement of such expenses except to the extent provided in
Section 3.03.
SECTION 3.08. Reporting by the Servicer.
(a) No later than 12:00 P.M. (New York time) on each Servicer Report
Date, the Servicer shall deliver (by telex, facsimile, electronic transmission,
first class mail, overnight courier, personal delivery or such other format
mutually agreed to by the Issuer, the Indenture Trustee and the Insurer) to the
Issuer, the Indenture Trustee and the Insurer a statement (the "Distribution
Date Statement") setting forth with respect to the next succeeding Distribution
Date:
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(i) the Note Principal Distributable Amount for such Distribution
Date;
(ii) the Note Interest Distributable Amount for such Distribution
Date;
(iii) the aggregate distribution amount for such Distribution Date;
(iv) the Insurance Premium payable to the Insurer;
(v) the amount on deposit in the Spread Account on such Distribution
Date, before and after giving effect to deposits thereto and withdrawals
there from to be made in respect of such Distribution Date;
(vi) the amount of the withdrawal, if any, required to be made from
the Spread Account by the Indenture Trustee pursuant to Section 4.04(b);
(vii) the aggregate Servicing Fee paid to the Servicer with respect
to the related Contracts for the related Collection Period;
(viii) the amount of fees paid to the Owner Trustee and the
Indenture Trustee with respect to the related Collection Period to the
extent paid from Available Funds pursuant to Section 4.03;
(ix) the amount of any Note Interest Carryover Shortfall or Note
Principal Carryover Shortfall on such Distribution Date, the Insured
Payment required to pay any shortfall; and the change in such shortfall
amounts from those with respect to the immediately preceding Distribution
Date;
(x) the number of, and aggregate amount of, monthly principal and
interest payments due on the related Contracts which are delinquent as of
the end of the related Collection Period, presented in increments of 31 to
60 days, 61 to 90 days, 91 to 120 days and 121 days or more;
(xi) the Available Funds and the Insured Payment, if any, for such
Distribution Date;
(xii) the aggregate amount of Liquidation Proceeds received for
Defaulted Contracts;
(xiii) the number and net outstanding balance of Contracts for which
the Financed Vehicle has been repossessed;
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(xiv) the Pool Balance; and
(xv) The Spread Account Required Amount for such Distribution Date.
Each such Distribution Date Statement shall be accompanied by an
Officers' Certificate of the Servicer, which Officers' Certificate shall state
that the computations reflected in such statement were made in conformity with
the requirements of this Agreement.
(b) On each Servicer Report Date, no later than 12:00 P.M. New York
Time, the Servicer shall deliver to the Issuer, the Indenture Trustee and the
Insurer a report, in respect of the immediately preceding Collection Period,
setting forth the following:
(i) the aggregate amount, if any, paid by or due from it or the
Seller for the purchases or repurchases of Contracts which the Servicer or
the Seller has become obligated to purchase or repurchase pursuant to
Sections 3.06 or 2.03;
(ii) the net amount of funds which have been deposited in or
credited to the Collection Account in respect of such Collection Period
after giving effect to all permitted deductions therefrom pursuant to
Section 4.02;
(iii) with respect to all Contracts which were the subject of a Full
Prepayment during such Collection Period, the following information:
(A) the related Contract Number; and
(B) the date(s) of such Full Prepayment;
(iv) the Contract Numbers, Monthly Scheduled Payment, Principal
Balances and Maturity Dates of all Contracts which became Defaulted
Contracts during such Collection Period;
(v) any other information relating to the Contracts reasonably
requested by the Owner Trustee, the Indenture Trustee or the Insurer; and
(vi) the amount of Net Liquidation Proceeds and Net Insurance
Proceeds which have been deposited in or credited to the Collection
Account in respect of the Collection Period ending immediately prior to
such Servicer Report Date and the cumulative amount of Net Liquidation
Proceeds and Net
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Insurance Proceeds deposited in or credited to the Collection Account
during the preceding Collection Periods.
SECTION 3.09. Annual Statement as to Compliance.
(a) The Servicer shall deliver to the Issuer, the Owner Trustee, the
Indenture Trustee and the Insurer, on or before March 15, 2000 and on or before
March 15 of each year thereafter, an Officers' Certificate of the Servicer
stating that (i) a review of the activities of the Servicer during the preceding
fiscal year (since the Closing Date in the case of the first of such Officers'
Certificates required to be delivered) and of its performance of its obligations
under this Agreement has been made under such officers' supervision and (ii) to
the best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year and that
no default under this Agreement has occurred and is continuing, 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 Issuer, the Owner Trustee, the
Indenture Trustee, the Insurer and each Rating Agency promptly after having
obtained knowledge thereof, but in no event later than three Business Days
thereafter, an Officer's Certificate specifying any event which with the giving
of notice or lapse of time, or both, would become a Servicer Default under
Section 7.01.
SECTION 3.10. Annual Independent Certified Public Accountant's
Report.
On or before April 30, 2001 and on or before April 30 of each year
thereafter, AutoNation, Inc. at its expense shall cause a firm of nationally
recognized independent certified public accountants acceptable to the Insurer to
furnish a report to the Issuer, the Owner Trustee, the Indenture Trustee and the
Insurer to the effect that (i) they have audited the balance sheet of
AutoNation, Inc. as of the last day of the immediately preceding fiscal year
(and, with respect to the initial such report, the balance sheet as of the last
day of the fiscal year 1999 and as of the last day of the fiscal year 2000) and
the related statements of operations, retained earnings and cash flows for such
fiscal year (and, with respect to the initial such report, the related
statements of operations, retained earnings and cash flows for the fiscal 1999
and for the fiscal year 2000) and have issued an opinion thereon, specifying the
date thereof, (ii) they have also reviewed the reports delivered by the Servicer
pursuant to Section 3.08 and certain other documents and the records relating to
the servicing of the Contracts and the distributions on the Notes under this
Agreement, in each case in accordance with procedures agreed to by the Servicer
and the Insurer (iii) their audit and review as described under clauses (i) and
(ii) above was made in accordance with generally accepted auditing standards and
accordingly included such tests of the
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accounting records and such other auditing procedures as they considered
necessary in the circumstances, and (iv) their audits and reviews described
under clauses (i) and (ii) above disclosed no exceptions which, in their
opinion, were material, relating to the servicing of such Contracts in
accordance with this Agreement and the making of distributions on the Notes in
accordance with this Agreement, or, if any such exceptions were disclosed
thereby, setting forth those exceptions which, in their opinion, were material.
SECTION 3.11. Access to Certain Documentation and Information
Regarding Contracts.
Each of the Servicer and the Custodian shall provide to the
Noteholders, the Issuer, the Indenture Trustee and the Insurer reasonable access
to the Contract Files and Contract Documents in its possession. Access shall be
afforded without charge, but only upon reasonable request and during normal
business hours at offices of the Servicer where such documents are kept. Nothing
in this Section 3.12 shall affect the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors, and
the failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section.
SECTION 3.12. Indemnification.
Subject to Section 7.02, the Servicer agrees to indemnify and hold
the Issuer, the Owner Trustee, the Indenture Trustee, the Insurer, the Seller,
the Custodian and Noteholders harmless against any and all claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any reasonable other costs, fees and expenses that the Issuer,
the Owner Trustee, the Indenture Trustee, the Insurer, the Custodian or the
Noteholders may sustain because of the negligence, willful misconduct 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. Indemnification under this Section shall survive the resignation or
removal of the Servicer or the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation.
SECTION 3.13. Reports to Noteholders and the Rating Agencies.
(a) The Owner Trustee or the Indenture Trustee at its own expense
shall provide to each Noteholder a copy of each Distribution Date Statement
described in Section 3.08(a) concurrently with the delivery of the statement
described in Section 4.05 below.
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(b) The Indenture Trustee shall provide to any Noteholder who so
requests in writing (addressed to the Corporate Trust Office of the Indenture
Trustee) a copy of the annual audit statement described in Section 3.09, or the
annual audit report described in Section 3.10.
(c) The Indenture Trustee shall forward to the Rating Agencies the
statement to Noteholders described in Section 4.05 and any other reports it may
receive pursuant to this Agreement to (i) Standard & Poor's Ratings Services,
Asset-Backed Surveillance Group, 55 Water Street, New York, New York 10041 and
(ii) Moody's Investors Service, Inc., ABS Monitoring Dept., 99 Church Street,
4th Floor, New York, New York 10007.
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ARTICLE IV
DISTRIBUTIONS; SPREAD ACCOUNT;
STATEMENTS TO NOTEHOLDERS
SECTION 4.01. Establishment of Trust Accounts.
(a) Prior to the Closing Date, the Indenture Trustee shall open, at
a depository institution (which shall be the same depository institution which
is acting in the capacity as Indenture Trustee) and shall maintain at the
Corporate Trust Office, the following accounts:
(i) an account denominated "Collection Account, ANRC Auto Owner
Trust 1999-A, The Chase Manhattan Bank, Indenture Trustee" (the
"Collection Account");
(ii) an account denominated "Note Distribution Account, ANRC Auto
Owner Trust 1999-A, The Chase Manhattan Bank, Indenture Trustee" (the
"Note Distribution Account");
(iii) an account denominated "Spread Account, ANRC Auto Owner Trust
1999-A, The Chase Manhattan Bank, Indenture Trustee" (the "Spread
Account"); and
(iv) a trust account denominated "Payment Account, ANRC Auto Owner
Trust 1999-A, The Chase Manhattan Bank, Indenture Trustee" (the "Payment
Account" and, together with the accounts described in clauses (i) and (ii)
above, the "Trust Accounts").
The Trust Accounts shall be Eligible Accounts (subject to the
requirement that the Payment Account must be maintained as provided in the
immediately preceding sentence) and relate solely to the Notes and to the
Contracts and, if applicable, the related Eligible Investments, and the
Indenture Trustee shall have sole dominion over the Trust Accounts. The location
and account numbers of the Trust Accounts as of the Closing Date are set forth
on Exhibit B. If at any time a Trust Account ceases to be an Eligible Account,
the Indenture Trustee (or the Servicer on its behalf) shall within 5 Business
Days establish a new Trust Account, which is an Eligible Account, and shall
transfer any cash or any investments from the prior account to the new Trust
Account. The Indenture Trustee shall give the Issuer, the Owner Trustee, the
Servicer and the Insurer at least five Business Days' prior written notice of
any change in the location of any Trust Account and shall not change any related
account identification information without the Insurer's prior written consent.
All amounts, financial assets and investment property held in, deposited in or
credited to,
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from time to time, the Trust Accounts shall be part of the Trust Property. All
amounts, financial assets and investment property held in, deposited in or
credited to, from time to time, the Collection Account and the Spread Account
shall be invested by the Indenture Trustee in Eligible Investments pursuant to
Section 4.01 (b).
(b) All funds in the Collection Account and the Spread Account shall
be invested by the Indenture Trustee (so long as the Indenture Trustee maintains
the applicable account) or on behalf of the Indenture Trustee by the depository
institution maintaining such account in Eligible Investments. Subject to the
limitations set forth herein, the Servicer shall direct the Indenture Trustee as
to such investment of funds in the Collection Account and the Spread Account in
Eligible Investments (which instructions may be in the form of standing
instructions); provided that in the absence of such directions from the
Servicer, the Indenture Trustee shall invest funds in the Collection Account and
the Spread Account in Eligible Investments described in clause (e) of the
definition thereof. All such investments shall be in the name of the Indenture
Trustee for the benefit of the Noteholders. All income or other gain from
investment of monies in the Collection Account shall be deposited in or credited
to the Collection Account by the depository institution maintaining the
Collection Account monthly and any loss resulting from such reinvestment shall
be charged to the Collection Account. All income or other gain from investment
of monies deposited in or credited to the Spread Account shall be deposited in
or credited to the Spread Account immediately upon receipt, and any loss
resulting from such investment shall be charged to the Spread Account. Eligible
Investments made with respect to the Collection Account and the Spread Account
will mature no later than the Business Day preceding the next following
Distribution Date. No investment in Eligible Investments may be sold prior to
its maturity and, except as permitted in writing by the Rating Agencies and the
Insurer, funds on deposit in the Collection Account and the Spread Account shall
be invested in Eligible Investments that will mature no later than the Business
Day immediately preceding the next Distribution Date. The funds on deposit in
the Payment Account and the Note Distribution Account shall remain uninvested.
The Indenture Trustee shall not in any way be held liable by reason
of any insufficiency in any of the foregoing Trust Accounts held by or on behalf
of the Indenture Trustee resulting from any investment loss on any Eligible
Investments, except in its capacity as obligor thereunder.
(c) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof and subject at all times to the terms
of the Securities Control Agreement, that:
(i) any Trust Account Property that is held in deposit accounts
shall be held solely in Eligible Accounts, subject to Section 4.01(a), and
each such Eligible Account shall be subject to the exclusive custody and
control of the
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Indenture Trustee, and the Indenture Trustee shall have sole signature
authority with respect thereto;
(ii) any Trust Account Property that constitutes Physical Property
shall be delivered to the Indenture Trustee in accordance with paragraph
(a) of the definition of "Delivery" and shall be held, pending maturity or
disposition, solely by the Indenture Trustee or a securities intermediary
(as such term is defined in Section 8-102(a)(14) of the UCC) acting solely
for the Indenture Trustee;
(iii) any Trust Account Property that is a book-entry security held
through the Federal Reserve System pursuant to federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the Indenture Trustee,
pending maturity or disposition, through continued book-entry registration
of such Trust Account Property as described in such paragraph; and
(iv) any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause (iii) above
shall be delivered to the Indenture Trustee in accordance with clause (c)
of the definition of "Delivery" and shall be maintained by the Indenture
Trustee, pending maturity or disposition, though continued registration of
the Indenture Trustee's or its securities intermediary's (or its
custodian's or its nominee's) ownership of such security.
Effective upon delivery of any Trust Account Property in the form of
physical property, book-entry securities or uncertificated securities, the
Indenture Trustee shall be deemed to have purchased such Trust Account Property
for value, in good faith and without notice of any adverse claim thereto.
The Indenture Trustee shall not enter into any subordination or
intercreditor agreement with respect to the Trust Account Property.
SECTION 4.02. Collections; Realization upon Insurance Policy; Net
Deposits; Transfers to Payment Account.
(a) Subject to the last sentence of this Section 4.02(a), the
Servicer shall remit or credit to the Collection Account all Monthly Scheduled
Payments, all Full Prepayments and partial prepayments and all Net Liquidation
Proceeds and Net Insurance Proceeds and other monies on a daily basis, within
two Business Days of receipt, by or on behalf of Obligors on the Contracts, to
the Collection Account. The Servicer or the Seller, as the case may be, each
shall remit or credit to the Collection Account each Purchase Amount to be
remitted by it with respect to Purchased Con-
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tracts on the Business Day preceding the Servicer Report Date next succeeding
(i) the end of the Collection Period in which the applicable Contract is
repurchased by the Seller pursuant to Section 2.03, in the case of the Seller,
(ii) the last day of the related cure period specified in Section 3.06, in the
case of the Servicer or (iii) the end of the Collection Period related to
purchase by the Servicer pursuant to Section 8.01. On the date of receipt, the
Servicer shall remit to the Collection Account any Purchase Amounts received
from the Originator pursuant to the Receivables Purchase Agreement.
(b) On the Servicer Report Date, the Servicer shall determine the
Insured Payment, if any, which exists with respect to the related Distribution
Date.
(c) The Indenture Trustee, based solely on the Distribution Date
Statement, shall, no later than 12:00 noon, New York City time, on the second
Business Day prior to each Distribution Date, make a claim under the Insurance
Policy for the Insured Payment, if any, for such Distribution Date by delivering
to the Fiscal Agent, with a copy to the Insurer and the Servicer, by hand
delivery, telex or facsimile transmission, a written notice (a "Deficiency
Notice") specifying the Insured Payment, if any, for such Distribution Date. In
addition, the Indenture Trustee shall make claims under the Insurance Policy for
Preference Amounts as provided in the Insurance Policy. Each Deficiency Notice
shall be in the form set forth as Exhibit A to the Insurance Policy. In making
any such claim, the Indenture Trustee shall comply with all the terms and
conditions of the Insurance Policy. Upon receipt of the Insured Payment, the
Indenture Trustee shall deposit such amount in the Payment Account and apply the
portion thereof, if any, representing the Deficiency Amount with respect to a
Distribution Date as provided in Section 4.03(a) and the Insurance Policy solely
to the applicable Noteholders. Any amounts received by the Indenture Trustee
under the Insurance Policy that represent Preference Amounts shall be paid, in
accordance with the Insurance Policy, to the applicable Noteholder(s).
(d) In connection with any Preference Amount payable under the
Insurance Policy, the Indenture Trustee shall furnish to the Insurer its records
evidencing the distributions of principal of and interest on the Notes that have
been made and subsequently recovered from Noteholders and the dates on which
such payments were made.
(e) The Indenture Trustee shall keep a complete and accurate record
of the amount of interest and principal paid in respect of any Notes from monies
received under the Policy. The Insurer shall have the right to inspect such
records at reasonable times during normal business hours upon three (3) Business
Day's prior notice to the Indenture Trustee, at the expense of the Insurer.
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(f) So long as AutoNation Financial Services is the Servicer, the
Servicer may make deposits in or credits to the Collection Account net of
amounts to be paid to the Servicer under this Agreement. Notwithstanding the
foregoing, the Servicer shall maintain the records and accounts for such
deposits and credits on a gross basis.
SECTION 4.03. Distributions.
(a) Subject to Sections 5.02 and 5.06 of the Indenture, on the
Business Day immediately preceding each Distribution Date, the Indenture Trustee
will cause funds equal to the amount of Available Funds with respect to such
Distribution Date to be withdrawn from the Collection Account and deposit such
funds into the Payment Account. Subject to Sections 5.02 and 5.06 of the
Indenture, on each Distribution Date, the Indenture Trustee, based solely on the
Distribution Date Statement, will apply the Available Funds on deposit in the
Payment Account, together with amounts, if any, withdrawn from the Spread
Account or representing payment of the Insured Payment, to make the following
deposits and distributions in the following amounts and order of priority:
(i) to the Servicer, from Available Funds and amounts, if any, with
drawn from the Spread Account, the Servicing Fee, including any unpaid
Servicing Fees with respect to one or more prior Distribution Dates;
(ii) to the Indenture Trustee and the Owner Trustee, from Available
Funds (after giving effect to the reduction in Available Funds described
in clause (i) above) and amounts, if any, withdrawn from the Spread
Account, any accrued and unpaid Indenture Trustee Fees and reasonable
out-of-pocket expenses and Owner Trustee Fees of the Indenture Trustee and
the Owner Trustee, in each case to the extent the Indenture Trustee Fees
and reasonable out-of-pocket expenses and Owner Trustee Fees have not been
previously paid by the Servicer; provided that such payments pursuant to
this clause (ii) will not during any calendar year exceed $75,000 in the
aggregate;
(iii) to the Insurer, from Available Funds (after giving effect to
the reduction in Available Funds described in clauses (i) and (ii) above)
and amounts, if any, withdrawn from the Spread Account, the Insurance
Premium for such Distribution Date;
(iv) to the Note Distribution Account, from Available Funds (after
giving effect to the reduction in Available Funds described in clauses
(i), (ii) and (iii) above) and amounts, if any, withdrawn from the Spread
Account and any amounts representing payment of the Insured Payment, the
Note Interest
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Distributable Amount to be distributed to the holders of the Notes at
their respective Note Rates;
(v) to the Note Distribution Account, if such Distribution Date is a
Final Scheduled Distribution Date for any Class of Notes, the Note
Principal Distributable Amount to the extent of the remaining Outstanding
Principal Amount of such Class of Notes, from Available Funds (after
giving effect to the reduction in Available Funds described in clauses (i)
through (iv) above), and amounts, if any, withdrawn from the Spread
Account and any amounts representing payment of the Insured Payment to be
paid to the holders of such Class of Notes;
(vi) to the Note Distribution Account, from Available Funds (after
giving effect to the reduction in Available Funds described in clauses (i)
through (v) above) and amounts, if any, withdrawn from the Spread Account
and any amounts representing payment of the Insured Payment to be paid to
the Noteholders as follows, the remaining Note Principal Distributable
Amount (after giving effect to the payment, if any, described in clause
(v) above), to be distributed first to the holders of the Class A-1 Notes
until the Outstanding Principal Amount of the Class A-1 Notes has been
reduced to zero, second, to the holders of the Class A-2 Notes until the
Outstanding Principal Amount of the Class A-2 Notes has been reduced to
zero, third, to the holders of the Class A-3 Notes until the Outstanding
Principal Amount of the Class A-3 Notes has been reduced to zero, and
fourth, to the holders of the Class A-4 Notes until the Outstanding
Principal Amount of the Class A-4 Notes has been reduced to zero;
(vii) to the Insurer, from Available Funds (after giving effect to
the reduction in Available Funds described in clauses (i) through (vi)
above) and amounts, if any, withdrawn from the Spread Account, any
Reimbursement Amounts owing to the Insurer;
(viii) to the Spread Account, from Available Funds (after giving
effect to the reduction in Available Funds described in clauses (i)
through (vii) above), the amount, if any, required to increase the amount
on deposit therein to the Spread Account Required Amount;
(ix) to the Indenture Trustee or the Owner Trustee, from Available
Funds (after giving effect to the reduction in Available Funds described
in clauses (i) through (viii) above), the amount of any fees and
reasonable expenses not paid under clause (ii) above as a result of the
dollar limitation on fees and reasonable expenses set forth in clause
(ii);
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(x) to the Indenture Trustee or the Successor Servicer, as
applicable, from Available Funds (after giving effect to the reduction in
Available Funds described in clauses (i) through (ix) above), any
Re-Liening Expenses, to the extent not paid by the Servicer as required
pursuant to Section 3.04(b);
(xi) to the Successor Servicer, if applicable, from Available Funds
(after giving effect to the reduction in Available Funds described in
clauses (i) through (x) above), Transition Costs and the amount of any
Additional Servicing Fee owing to the Successor Servicer; and
(xii) any remaining Available Funds will be distributed to the
holder of the Residual Interest Certificate.
Any amounts deposited in the Payment Account pursuant to 4.04(b) with respect to
a Distribution Date shall be applied by the Indenture Trustee solely to make the
distributions referred to in clauses (i) through (vii) above and any Insured
Payment that represents the Deficiency Amount with respect to such Distribution
Date shall be applied by the Indenture Trustee solely to make the distributions
referred to in clauses (iv) through (vi) above, in that order of priority, but
only to the extent that the Avail able Funds with respect to such Distribution
Date, after application as provided above, were insufficient to make such
distribution.
SECTION 4.04. Spread Account.
(a) The Spread Account will be held for the benefit of the
Noteholders and the Insurer. On or prior to the Closing Date, the Issuer shall
deposit or cause to have deposited an amount equal to the Spread Account Initial
Deposit into the Spread Account from the net proceeds of the sale of the Notes.
(b) On each Distribution Date, the Indenture Trustee, based solely
on the Distribution Date Statement, shall withdraw funds from the Spread
Account, to the extent funds are on deposit therein, equal to the amount by
which the sum of the amounts set forth in Section 4.03(a), clauses (i) though
(vii), with respect to such Distribution Date exceeds the amount of Available
Funds for such Distribution Date. The Indenture Trustee shall deposit any such
funds withdrawn from the Spread Account into the Payment Account to be
distributed pursuant to Section 4.03(a). Funds shall also be withdrawn from the
Spread Account by the Indenture Trustee, as directed by the Insurer to reimburse
the Insurer for any draws under the Insurance Policy with respect to any
Preference Amount. If the amount on deposit in the Spread Account on any
Distribution Date (after giving effect to all deposits thereto or withdrawals
therefrom on such Distribution Date other than withdrawals relating to
distributions to be made pursuant to this sentence) exceeds the Spread Account
Required Amount set forth in the Insurance Agreement, the Indenture Trustee
shall,
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based solely on the Distribution Date Statement, distribute any excess first, to
the Insurer, to the extent of any amounts owing to the Insurer pursuant to the
Insurance Agreement, and then to the holder of the Residual Interest
Certificate. Upon any such distributions to the Insurer the Noteholders will
have no further rights in, or claims to, such distributed amounts. None of the
Noteholders, the Indenture Trustee, the Owner Trustee, the Seller or the Insurer
will be required to refund any amounts properly distributed to them, whether or
not there are sufficient funds on any subsequent Distribution Date to make full
distributions to the Noteholders. The obligations of the Insurer under the
Insurance Policy will not be diminished or otherwise affected by any amounts
distributed to the Insurer.
(c) Amounts held in the Spread Account shall be invested in the
manner specified in Section 4.01(b) and (c), and such investments shall be made
in accordance with written instructions from the Servicer;
(d) With respect to the Spread Account Property, the Indenture
Trustee agrees that, subject at all times to the terms of the Securities Account
Control Agreement:
(i) any Spread Account Property that is held in deposit
accounts shall be held solely in the name of the Indenture Trustee,
as collateral agent, with the Indenture Trustee. The Spread Account
shall be subject to the exclusive custody and control of the
Indenture Trustee, and the Indenture Trustee shall have sole
signatory authority with respect thereto.
(ii) Any Spread Account Property that constitutes Physical
Property shall be delivered to the Indenture Trustee, as collateral
agent, in accordance with clause (a) of the definition of "Delivery"
and shall be held, pending maturity or disposition, solely by the
Indenture Trustee, as collateral agent, or a securities
intermediary, as such term is defined in Section 8-102(a)(14) of the
UCC, acting solely for the Indenture Trustee, as collateral agent.
(iii) Any Spread Account Property that is a book-entry
security held through the Federal Reserve System pursuant to federal
book-entry regulations shall be delivered in accordance with clause
(b) of the definition of "Delivery" and shall be maintained by the
Indenture Trustee, as collateral agent, pending maturity or
disposition, through continued book-entry registration of such Trust
Account Property as described in such paragraph.
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(iv) Any Spread Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by
clause (iii) above shall be delivered to the Indenture Trustee, as
collateral agent, in accordance with clause (c) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee, as
collateral agent, pending maturity or disposition through continued
registration of the Indenture Trustee's or its securities
intermediary's (or its custodian's or its nominee's) ownership of
such security, in its capacity as collateral agent.
Effective upon delivery of any Spread Account Property in the form
of physical property, book-entry securities or uncertificated securities, the
Indenture Trustee shall be deemed to have purchased such Spread Account Property
for value, in good faith and without notice of any adverse claim thereto.
The Indenture Trustee shall not enter into any subordination or
intercreditor agreement with respect to the Spread Account Property.
(e) Any amounts on deposit in the Spread Account, after payments of
amounts due to the Noteholders and all amounts due to the Insurer pursuant to
the Insurance Agreement, shall be paid to the holder of the Residual Interest
Certificate on the date of the termination of the Trust pursuant to Section 9.01
of the Owner Trust Agreement; provided, however, that if an insolvency
proceeding with respect to any of the Seller, the Servicer, the Trust, the
Indenture Trustee or the Noteholders (collectively, the "Potential Preference
Parties") shall have occurred during the period ending ninety-one (91) days
after payment in full to the Noteholders of all amounts payable with respect to
the Notes and the payment in full of the Reimbursement Amount owed to the
Insurer then the funds on deposit in the Spread Account shall be retained until
the date all applicable statute of limitation periods with respect to all
applicable preference actions and periods have expired and during which time no
preference action or similar proceeding at law or in equity is commenced, at
which time, the Indenture Trustee shall release all amounts in the Spread
Account to the Seller. In the event that any preference action referred to above
is commenced during any applicable statute of limitations period, funds
deposited in the Spread Account shall be retained until the date on which there
is a final determination by a court of competent jurisdiction as to whether any
payment or payments made pursuant to this Agreement, the Indenture or the
Insurance Agreement is recoverable from the Insurer or the Noteholders. If it is
so determined that a payment is so recoverable, funds deposited in the Spread
Account shall be applied by the Indenture Trustee at the written direction of
the Insurer, first to pay any and all such claims with respect to such
preference actions as the Noteholders and the Insurer may be required to pay and
then to the Seller. If it is determined that any such payment is not
recoverable, the Indenture Trustee shall release all amounts on deposit in the
Spread Account to the Seller, upon receipt by the
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Insurer of both a final order determining that such payments are not recoverable
and an opinion of nationally recognized bankruptcy counsel to the effect that
such appeal is final and not subject to appeal. For purposes of compliance with
this Section 4.04, the Indenture Trustee shall be entitled to rely on written
instructions from the Insurer.
(f) In the event the Seller seeks to have the amounts remaining on
deposit in the Spread Account released to it prior to the expiration of the
ninety-one (91) day period specified in Section 4.04(e) above, then, if (i)
amounts payable with respect to the Notes have been fully paid to the
Noteholders, (ii) the Reimbursement Amount and all other amounts owing to the
Insurer pursuant to the Insurance Agreement have been paid in full, (iii) no
insolvency proceeding has occurred with respect to the Potential Preference
Parties, and (iv) either (A) the long term unsecured debt of the Seller and the
Servicer is rated "BBB-" or better by Standard & Poor's and "Baa3" or better by
Moody's, (B) the Insurer shall have received a favorable opinion or opinions,
satisfactory in form and substance to the Insurer, from counsel to AutoNation
Financial Services, the Seller and the Servicer, to the effect that in the event
an insolvency proceeding were to occur with respect to the Potential Preference
Parties, no payment pursuant to this Agreement or the Insurance Agreement would
be recoverable from either the Insurer or the Noteholders, and such other
matters as the Insurer may reasonably request, or (C) the Insurer, in its sole
discretion, elects to have the remaining amounts on deposit in the Spread
Account paid to the Seller, then, in any such event, all remaining amounts on
deposit in the Spread Account shall be paid to the Seller.
(g) On or after the occurrence of an Event of Default under the
Indenture and the acceleration of the Notes thereunder, and upon the written
direction of the Insurer, all, or any portion of, amounts on deposit in the
Spread Account shall be applied to pay amounts described in Section 5.06 of the
Indenture.
SECTION 4.05. Statements to Noteholders.
(a) On each Distribution Date, the Indenture Trustee shall include
with each distribution to a Noteholder of record as of the related Record Date,
a statement, prepared by the Servicer, based solely on the information in the
Distribution Date Statement furnished pursuant to Section 3.08, setting forth
for such Distribution Date at least the following information as of the
Distribution Date, as the case may be:
(i) the Note Principal Distributable Amount for such Distribution
Date;
(ii) the Note Interest Distributable Amount for such Distribution
Date;
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(iii) the aggregate distribution amount for such Distribution Date;
(iv) the Insurance Premium payable to the Insurer;
(v) the amount on deposit in the Spread Account on such Distribution
Date, before and after giving effect to deposits thereto and withdrawals
there from to be made in respect of such Distribution Date;
(vi) the amount of the withdrawal, if any required to be made from
the Spread Account by the Indenture Trustee pursuant to Section 4.04(b)
(vii) the aggregate Servicing Fee paid to the Servicer with respect
to the Contracts for the related Collection Period;
(viii) the amount of the Owner Trustee Fee and Indenture Trustee Fee
paid to the Owner Trustee and the Indenture Trustee, with respect to the
related Collection Period to the extent not paid by the Servicer or from
Available Funds pursuant to Section 4.03;
(ix) the amount of any Note Interest Carryover Shortfall or Note
Principal Carryover Shortfall on such Distribution Date and the change in
such shortfall amounts from those with respect to the immediately
preceding Distribution Date;
(x) the number of, and aggregate amount of, monthly principal and
interest payments due on the related Contracts which are delinquent as of
the end of the related Collection Period presented in increments of 31 to
60 days, 61 to 90 days, 91 to 120 days and 121 days or more;
(xi) the Available Funds and the Insured Payment, if any, for such
Distribution Date;
(xii) the aggregate amount of Liquidation Proceeds received for
Defaulted Contracts;
(xiii) the number and net outstanding balance of Contracts for which
the Financed Vehicle has been repossessed; and
(xiv) the Pool Balance; and
(xv) the Spread Account Required Amount for such Distribution Date.
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Each amount set forth pursuant to subclauses (i) or (ii) above shall be
expressed as a dollar amount per $1,000.00 of Original Principal Amount of a
Note.
(b) No later than the latest date permitted by law, the Servicer
shall prepare and furnish to the Issuer, the Indenture Trustee and each Paying
Agent, and the Paying Agent for the Notes and the Paying Agent for the Notes
shall furnish to each Person who on any Record Date during such calendar year
shall have been a Noteholder, a statement or statements containing the sum of
the amounts set forth in clauses (i) and (ii) above for such calendar year and
such other information as is reasonably necessary for the preparation of such
Person's federal income tax return in respect of the Notes or, in the event such
Person shall have been a Noteholder during a portion of such calendar year, for
the applicable portion of such year, for the purposes of such Noteholder's
preparation of federal income tax returns.
SECTION 4.06. Effect of Payments by the Insurer; Subrogation.
(a) Anything herein to the contrary notwithstanding, any
distribution of principal of or interest on the Notes that is made with moneys
received pursuant to the terms of the Insurance Policy shall not be considered
payment of the Notes by the Issuer and shall not discharge the Trust Estate in
respect of such distribution. The Indenture Trustee acknowledges that, without
the need for any further action on the part of the Insurer, the Indenture
Trustee or the Note Registrar, (i) to the extent the Insurer makes payments,
directly or indirectly, on account of principal of or interest on the Notes to
the Noteholders thereof, the Insurer will be fully subrogated to the rights of
such Noteholders to receive such principal and interest from distributions of
the assets of the Trust and will be deemed to the extent of the payments so made
to be a Noteholder and (ii) the Insurer shall be paid principal and interest in
its capacity as a Noteholder until all such payments by the Insurer have been
fully reimbursed, but only from the sources and in the manner provided herein
for the distribution of such principal and interest and in each case only after
the Noteholders have received all payments of principal and interest due to them
under this Agreement on the related Distribution Date.
(b) Without limiting the rights or interests of the Noteholders as
otherwise set forth herein, so long as no Insurer Default exists or is not
continuing, the Indenture Trustee shall cooperate in all respect with any
reasonable request by the Insurer for action to preserve or enforce the
Insurer's rights or interests under this Agreement, including, upon the
occurrence of an Event of Default or a Non-Servicer Default, a request to take
any one or more of the following actions:
(i) institute proceedings for the collection of all amounts then
payable on the Notes or under this Agreement, enforce any judgment
obtained and collect moneys adjudged due; and
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(ii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and
remedies of the Insurer hereunder or under the other Basic Documents.
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ARTICLE V
THE SELLER
SECTION 5.01. Liability of Seller; Indemnities.
The Seller shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Seller under this Agreement.
The Seller shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Insurer and the Custodian and their
respective officers, directors, agents and employees from and against any taxes
that may at any time be asserted against any such Person with respect to the
transactions contemplated herein and in the other Basic Documents, including any
sales, gross receipts, general corporation, tangible or intangible personal
property, privilege or license taxes (but not including any federal or other
income taxes arising out of distributions on the Securities) and costs and
expenses in defending against the same.
The Seller shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Insurer, the Custodian their
respective officers, directors, agents and employees and the Noteholders from
and against any loss, liability or expense incurred by reason of the Seller's
willful misfeasance, bad faith or negligence (other than errors in judgment) in
the performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement.
The Seller shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, and their respective officers, directors,
agents and employees from and against all costs, expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties herein and, in the case of
the Owner Trustee, in the Owner Trust Agreement and, in the case of the
Indenture Trustee, in the Indenture, except to the extent that such cost,
expense, loss, claim, damage or liability, in the case of (i) the Owner Trustee,
shall be due to the willful misfeasance, bad faith or negligence of the Owner
Trustee or shall arise from the breach by the Owner Trustee of any of its
representations or warranties set forth in the Owner Trust Agreement, (ii) the
Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence of the Indenture Trustee or (iii) the Custodian, shall be due to the
willful misfeasance, bad faith or negligence of the Custodian, respectively.
Indemnification under this Section 5.01 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
Indemnification under this Section 5.01 shall be payable solely from amounts
payable to the Seller
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pursuant to clause (xiii) of Section 4.03(a) and shall not otherwise be payable
from the Trust Property. If the Seller shall have made any indemnity payments
pursuant to this section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest to the extent
such Person has received amounts in excess of the indemnity payments such Person
is entitled to under the Basic Documents. Indemnification under this subsection
shall survive the resignation or removal of the Seller or the termination of
this Agreement.
SECTION 5.02. Merger or Consolidation of, or Assumption of the
Obligations of Seller; Certain Limitations.
(a) The Seller shall keep in full effect its existence, rights and
franchises as a corporation incorporated under the laws of the State of
Delaware, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Contract
Documents and this Agreement.
(b) The Seller shall not consolidate with or merge into any other
corporation or convey, transfer or lease substantially all of its assets as an
entirety to any Person unless such action is accomplished in accordance with the
Insurance Agreement and the corporation formed by such consolidation or into
which the Seller has merged or the Person which acquires by conveyance, transfer
or lease substantially all the assets of the Seller as an entirety, can lawfully
perform the obligations of the Seller hereunder and executes and delivers to the
Issuer, the Indenture Trustee and the Insurer an agreement in form and substance
reasonably satisfactory to the Issuer, the Indenture Trustee and the Insurer,
which contains an assumption by such successor entity of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Seller under this Agreement. The Seller shall provide prompt
notice of any merger, consolidation or succession pursuant to this Section 5.02
to the Owner Trustee, the Indenture Trustee, the Insurer, the Servicer 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 2.02
shall have been breached (for purposes hereof, such representations and
warranties shall speak as of the date of the consummation of such transaction),
(y) the Seller shall have delivered to the Owner Trustee, the Indenture Trustee,
the Servicer and the 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 5.02 and that all conditions precedent
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
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Indenture Trustee, the Servicer and the 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 Contracts
and reciting the details of such filings or (B) no such action is necessary to
preserve and protect such interest.
SECTION 5.03. 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 any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Seller shall not be under any obligation to appear in, prosecute or defend
any legal action that shall not be incidental to its obligations under this
Agreement, and that in its opinion may involve it in any expense or liability.
SECTION 5.04. Seller Not to Resign.
Subject to the provisions of Section 5.02, the Seller shall not
resign from the obligations and duties hereby imposed on it as Seller under this
Agreement.
SECTION 5.05. Seller May Own Notes.
The Seller and any Affiliate thereof may in its individual or any
other capacity become the owner or pledgee of Notes with the same rights as it
would have if it were not the Seller or an Affiliate thereof, except as
expressly provided herein or in any Basic Document. 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, without preference, priority or
distinction as among all of the Notes.
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ARTICLE VI
THE SERVICER
SECTION 6.01. Liability of Servicer; Indemnities.
Subject to Section 7.02, the Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically undertaken by the
Servicer under this Agreement. Such obligations shall include the following:
(a) The Servicer shall defend, indemnify and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Insurer, the Seller, the
Custodian, their respective officers, directors, agents and employees, and the
Noteholders from and against any and all costs, expenses, losses, damages,
claims and liabilities, arising out of or resulting from the use, ownership or
operation by the Servicer or any Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Insurer, the Custodian and
their respective officers, directors, agents and employees from and against any
taxes that may at any time be asserted against the Issuer, the Owner Trustee,
the Indenture Trustee, the Insurer, the Seller or the Custodian with respect to
the transactions contemplated herein, including, without limitation, any sales,
gross receipts, general corporation, tangible or intangible personal property,
privilege or license taxes (but, not including (i) in the case of the Issuer,
any taxes asserted with respect to, and as of the date of, the sale of the
Contracts to the Issuer or the issuance and original sale of the Securities, or
(ii) any taxes asserted with respect to ownership of the Contracts, or (iii) any
federal or other income taxes arising out of distributions on the Securities)
and costs and expenses in defending against the same.
Indemnification under this Section 6.01 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Servicer shall have made any indemnity payments pursuant to this Section
and the recipient thereafter collects any of such amounts from others, the
recipient Person shall promptly repay such amounts to the Servicer, without
interest to the extent such Person has received amounts in excess of the
indemnity payments such Person is entitled to under the Basic Documents.
This Section 6.01 shall survive the resignation or removal of the
Servicer and the termination of this Agreement.
SECTION 6.02. Corporate Existence; Status as Servicer; Merger.
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(a) The Servicer shall keep in full effect its existence, rights and
franchises as a corporation incorporated under the laws of the State of
Delaware, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Contract
Documents and this Agreement.
(b) The Servicer shall not consolidate with or merge into any other
Person or convey, transfer or lease all or substantially all of its assets as an
entirety to any Person or engage in any similar corporate transaction pursuant
to which the surviving or successor entity is not AutoNation Financial Services,
unless (i) all additional conditions contained in the Insurance Agreement are
satisfied; (ii) the resulting entity executes and delivers to the Issuer, the
Indenture Trustee and the Insurer an agreement in form and substance reasonably
satisfactory to the Issuer, the Indenture Trustee and the Insurer, which
contains an assumption by such successor entity of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer under this Agreement; (iii) the Servicer shall provide
notice of any merger, consolidation or succession pursuant to this Section 6.02
to the Owner Trustee, the Indenture Trustee, the Insurer and each Rating Agency;
(iv) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.05 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 Default shall have occurred; (v) the
Servicer shall have delivered to the Owner Trustee, the Indenture Trustee and
the 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 6.02 and that all conditions precedent provided for in
this Agreement relating to such transaction have been complied with and (vi) the
Servicer shall have delivered to the Owner Trustee, the Indenture Trustee and
the Insurer an Opinion of Counsel stating that either (A) all financing
statements and continuation statements and amendments thereto have been duly
executed and filed that are necessary to preserve and protect the interest of
the Trust and the Indenture Trustee, respectively, in the assets of the Trust
and reciting the details of such filings or (B) no such action shall be
necessary to preserve and protect such interest.
SECTION 6.03. Performance of Obligations.
(a) The Servicer shall punctually perform and observe all of its
obligations and agreements contained in this Agreement.
(b) The Servicer shall not take any action, or permit any action to
be taken by others, which would excuse any person from any of its covenants or
obligations under any of the Contract Documents or under any other instrument
included in
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the Trust Property, or which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any of the Contract Documents or any such instrument, except
as expressly provided herein and therein.
SECTION 6.04. Servicer Not to Resign; Assignment.
(a) The Servicer shall not resign from the duties and obligations
hereby imposed on it except upon determination by its Board of Directors that by
reason of change in applicable legal requirements the continued performance by
the Servicer of its duties hereunder would cause it to be in violation of such
legal requirements in a manner which would result in a material adverse effect
on the Servicer or its financial condition, said determination to be evidenced
by a resolution of its Board of Directors to such effect accompanied by an
Opinion of Counsel, satisfactory to the Issuer, the Insurer and the Indenture
Trustee, to such effect. No such resignation shall become effective unless and
until (i) the Indenture Trustee assumes all of the Servicer's obligations under
this Agreement; provided, however, the Indenture Trustee shall in no event
whatsoever assume the Servicer's obligation to repurchase Contracts, nor will
the Indenture Trustee purchase Contracts or (ii) a new servicer acceptable to
the Insurer assumes the servicing of the Contracts and enters into a servicing
agreement with the Issuer, the Indenture Trustee and the Insurer in form and
substance substantially similar to this Agreement and satisfactory to the
Indenture Trustee and the Insurer, and each Rating Agency confirms that the
selection of such new servicer will not result in the qualification, reduction
or withdrawal of its then-current rating of each Class of Notes assigned by such
Rating Agency, without regard to the Insurance Policy. No such resignation by
the Servicer shall affect the obligation of the Servicer to repurchase pursuant
to Section 3.06 Contracts which were adversely affected as a result of the
Servicer's actions while acting as Servicer.
(b) Except as specifically permitted in this Agreement, the Servicer
may not assign this Agreement or any of its rights, powers, duties or
obligations hereunder; provided that the Servicer may assign this Agreement in
connection with a consolidation, merger, conveyance, transfer or lease made in
compliance with Section 6.02(b).
(c) Except as provided in Sections 6.04(a) and (b), the duties and
obligations of the Servicer under this Agreement shall continue until this
Agreement shall have been terminated as provided in Section 8.01 or the Trust
shall have been terminated as provided by the terms of the Trust Agreement, and
shall survive the exercise by the Issuer, the Indenture Trustee or the Insurer
of any right or remedy under this Agreement, or the enforcement by the Issuer,
the Indenture Trustee, any Noteholder, or the Insurer of any provision of the
Notes, the Insurance Agreement or this Agreement.
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(d) The resignation of the Servicer in accordance with this Section
shall not affect the rights of the Seller hereunder. If the Servicer resigns
pursuant to this Section, its appointment as custodian may be terminated
pursuant to Section 2.08.
SECTION 6.05. Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees
or agents of the Servicer shall be under any liability to the Issuer or the
Noteholders, except as provided under this Agreement, for any action taken or
for refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; provided that this provision shall not protect the Servicer
or any such person against any liability that would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence in the performance of
duties or by reason of reckless disregard of obligations and duties under this
Agreement. The Servicer and any director, officer, employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any person respecting any matters arising under this
Agreement.
Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Contracts in accordance
with this Agreement, and that in its opinion may involve it in any expense or
liability; provided that the Servicer may undertake any reasonable action that
it may deem necessary or desirable in respect of this Agreement and the other
Basic Documents and the rights and duties of the parties to this Agreement and
the other Basic Documents and the interests of the Noteholders under this
Agreement and the other Basic Documents.
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ARTICLE VII
SERVICER DEFAULTS
SECTION 7.01. Servicer Defaults.
If any one of the following events (each, a "Servicer Default")
shall occur and be continuing:
(a) any failure by the Servicer to deposit or credit to the
Collection Account any amount required under this Agreement to be so deposited
or credited, which failure continues unremedied for a period of two Business
Days after discovery by the Servicer or receipt by the Servicer of written
notice of such failure from the Issuer, the Indenture Trustee or the Insurer or
after discovery of such failure by an officer of the Servicer;
(b) the Insurer, the Indenture Trustee or the Issuer shall not have
received a report in accordance with Section 3.08 by the Servicer Report Date
with respect to which such report is due and which shall continue unremedied for
a period of one day after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given;
(c) failure on the part of the Seller or the Servicer duly to
observe or to perform any other covenants or agreements of the Seller or the
Servicer set forth in this Agreement or any other Basic Document, which failure
shall (i) materially and adversely affect the rights of the Noteholders, the
Insurer, the Issuer, the Owner Trustee or the Indenture Trustee and (ii)
continue unremedied for a period of 30 days after the date on which the Seller,
the Custodian or the Servicer shall have knowledge of such failure or written
notice of such failure, requiring the same to be remedied, shall have been given
(A) to the Seller or the Servicer, as the case may be, by the Insurer, the
Issuer, the Owner Trustee or the Indenture Trustee or (B) to the Seller or the
Servicer, as the case may be, and to the Issuer and the Indenture Trustee by
Noteholders, acting together as a single class, evidencing in the aggregate not
less than 25% of the Outstanding Principal Amount of the Notes or, so long as no
Insurer Default has occurred and is continuing, by the Insurer;
(d) 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 its property, or ordering the winding
up or liquidation of the affairs of the Servicer or the Seller and the
continu-
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ance of any such decree or order unstayed and in effect for a period of 60
consecutive days or 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;
(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;
(f) any merger or consolidation or sale of assets of the Servicer in
violation of the covenant set forth in Section 6.02 hereof;
(g) the Servicer shall have failed in the reasonable opinion of the
Insurer to service the Contracts in accordance with the Servicing Standards and
such failure shall have continued unremedied for 30 days after written notice of
such failure shall have been delivered to the Servicer by the Insurer;
(h) any representation, warranty or statement of the Servicer or the
Seller made in this Agreement or the other Basic Documents 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 made in this Agreement or
any other Basic Document as to which Section 2.03 or 3.06 shall be applicable so
long as the Servicer or the Seller shall be in compliance with Section 2.03 or
3.06, as the case may be), and the incorrectness of such representation,
warranty or statement has a material adverse effect on the Noteholders or the
Insurer and, within 30 days after written notice thereof shall have been given
to the Servicer or the Seller by the Indenture Trustee or the Issuer or by
Noteholders, acting together as a single class, evidencing in the aggregate not
less than 25% of the Outstanding Principal Amount of the Notes, or so long as no
Insurer Default has occurred, by the Insurer, the circumstance or condition in
respect of which such representation, warranty or statement was incorrect shall
not have been eliminated or otherwise cured;
(i) the subservicing agreement between World Omni Financial Corp.
and the Servicer shall for any reason cease to be in full force and a successor
Subservicer acceptable to the Insurer shall not be appointed within 60 days, or
if any
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party thereto denies that it has any further liability thereunder or gives
notice to such effect;
(j) the Indenture Trustee shall, for any reason, fail to have a
valid perfected first priority security interest in Contracts pledged by the
Issuer to the Indenture Trustee the outstanding aggregate Principal Balance of
which exceeds 5.00% of the Pool Balance;
(k) unless authorized under Section 5.02, the Seller shall enter
into any transaction described in Section 5.02 regardless of the surviving
entity; or
(l) an Event of Default as defined in the Insurance Agreement;
then and in each and every case, so long as such Servicer Default shall not have
been remedied, (i) if no Insurer Default has occurred and is continuing, the
Insurer or (ii) if an Insurer Default has occurred and is continuing, the
Indenture Trustee acting at the direction of the Noteholders evidencing not less
than 25% of the outstanding amount of the Notes, acting together as a single
Class, by notice then given in writing to the Servicer (and to the Insurer, the
Indenture Trustee and the Issuer if given by the Noteholders) may terminate all
the rights and obligations of the Servicer under this Agreement. Upon such
termination, termination of the Servicer as custodian, if the Servicer is acting
as such, can be made pursuant to Section 2.08.
On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Notes, the Contracts or otherwise, shall, without further action, pass to
and be vested in the Indenture Trustee or such Successor Servicer as may be
appointed under Section 7.02 and, without limitation, the Indenture Trustee and
the Issuer are hereby authorized and empowered to execute and deliver on behalf
of the 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 Contracts and related documents, or
otherwise. The Servicer shall cooperate with the Indenture Trustee, the Insurer
and the Issuer in effecting the transfer of the responsibilities and rights of
the Servicer under this Agreement (whether due to termination, resignation or
otherwise), including the transfer to the Indenture Trustee or such Successor
Servicer, as applicable, for administration by it of all cash amounts that (i)
shall at the time be held by the Servicer for deposit in, or shall have been
deposited by the Servicer in, the Collection Account or (ii) shall thereafter be
received by it with respect to any Contract. The predecessor Servicer shall pay
all costs of the Successor Servicer associated with its transition to the role
of Successor Servicer (whether due to termination, resignation or otherwise).
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SECTION 7.02. Trustee to Act; Appointment of Successor.
(a) Upon the termination of the Servicer by the Insurer pursuant to
Section 7.01 or resignation of the Servicer pursuant to Section 6.04 or
otherwise, the Insurer may appoint a successor servicer ("Successor Servicer")
other than the Indenture Trustee. Until the Insurer has appointed a Successor
Servicer, the Indenture Trustee shall be the Successor Servicer for all purposes
of this Agreement. In the event that the Indenture Trustee is unable to so act
and the Insurer has not appointed a Successor Servicer within 60 days, the
Indenture Trustee may, with the consent of the Insurer, which consent will not
be unreasonably withheld, appoint, or petition a court of competent jurisdiction
for the appointment of, a successor acceptable to the Insurer with a net worth
of at least $50,000,000 and whose regular business includes the servicing of
automobile and light-duty retail installment sales contracts. If an Insurer
Default has occurred and is continuing, upon the termination of the Servicer by
the Indenture Trustee, the Noteholders shall appoint a Successor Servicer
pursuant to Section 7.01, or upon the resignation of the Servicer pursuant to
Section 6.04 in the event that the Insurer is not entitled to appoint a
Successor Servicer by operation of Section 9.08, (i) if the Notes have not been
paid in full, the Indenture Trustee shall be the Successor Servicer and (ii) if
the Notes have been paid in full, the Depositor shall appoint the Successor
Servicer. If the Indenture Trustee acts as Successor Servicer, the Indenture
Trustee shall be entitled to such compensation (whether payable out of the
Collection Account or otherwise) as the Servicer would have been entitled to
under this Agreement if no such notice of termination shall have been given, as
well as reasonable Transition Costs, which shall be payable as provided in
Section 4.03(a)(x). Pending appointment of any such Successor Servicer, the
Indenture Trustee shall act in such capacity as provided above.
(b) The Successor Servicer shall succeed to all the
responsibilities, duties and liabilities of the Servicer under this Agreement,
except that if the Indenture Trustee is the Successor Servicer, it shall not be
obligated to purchase Contracts pursuant to Section 3.06; provided, however, the
Successor Servicer (if the Indenture Trustee) shall be obligated to indemnify,
defend and hold harmless the Issuer, the Seller, the Noteholders and the Insurer
and their respective officers, directors, agents and employees from and against
any and all costs, expenses, losses, damages, claims and liabilities arising out
of or resulting from such Successor Servicer's failure to perform its
obligations under Sections 3.02, 3.04 or 3.05(a). Any Successor Servicer has the
right, with the prior written consent of the Insurer, to terminate the services
of any Subservicer in respect of the Contracts arising under the related
subservicing agreement between the predecessor Servicer and such Subservicer
which is in effect at the time such Successor Servicer assumes its
responsibilities as Successor Servicer and any termination fees in connection
with such termination shall be paid by the predecessor servicer. In connection
with any appointment of a Successor Servicer, the Indenture Trustee may make
arrangements for the compensation of such successor out of
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payments on Contracts as the Indenture Trustee, the Insurer and such Successor
Servicer shall agree; provided that such amount shall equal the product of a
fixed percentage rate and the Principal Balance, as of the commencement of each
Collection Period, of each Contract. The Indenture Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
SECTION 7.03. Notification to Noteholders.
Upon any termination of, or appointment of a successor to, the
Servicer pursuant to this Article, the Indenture Trustee shall give prompt
written notice thereof to each Noteholder of record at their respective
addresses appearing in the Note Register.
SECTION 7.04. Waiver of Past Defaults.
Unless an Insurer Default shall have occurred and be continuing, the
Insurer, and only the Insurer, may waive any default by the Servicer in the
performance of its obligations under this Agreement, any Servicer Default. If an
Insurer Default has occurred and is continuing, (i) the Noteholders evidencing
not less than 51% of the Outstanding Principal Amount of the Notes, acting
together as a single Class on behalf of all Noteholders, shall have the right to
waive any default by the Servicer in the performance of its obligations under
this Agreement or any Servicer Default except a Servicer Default in making any
required deposits to or payment from the Trust Accounts in accordance with this
Agreement. No such waiver shall impair the Insurer's or the Noteholders' rights
with respect to subsequent defaults.
SECTION 7.05. Insurer Direction of Insolvency Proceedings.
(a) The Indenture Trustee, upon the actual knowledge of a
Responsible Officer of the Indenture Trustee, shall promptly notify the Insurer
of (i) the commencement of any of the events or proceedings by or against any
Obligor, the Servicer, the Seller, the Issuer or the Originator under the United
States Bankruptcy Code or any other applicable federal or state bankruptcy,
insolvency, receivership, rehabilitation or similar law (individually, an
"Insolvency Proceeding") and (ii) the making of any claim in connection with any
Insolvency Proceeding seeking the avoidance as a preferential transfer (a
"Preference Claim") of any payment of principal of, or interest on, any Notes.
Any Preference Amounts paid by the Insurer shall be reimbursed to the Insurer as
provided in Section 4.03(a) and 4.04(b). Each Noteholder, by its purchase of
Notes, the Owner Trustee and the Indenture Trustee hereby agree that, so long as
no Insurer Default has occurred and is continuing, the Insurer may at any time
during the continuation of an Insolvency Proceeding direct all matters relating
to such Insolvency Proceeding, including, without limitation, (i) all matters
relating to
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any Preference Claim, (ii) the direction of any appeal of any order relating to
any Preference Claim and (iii) the posting of any surety or performance bond
pending any such appeal. The Insurer shall be subrogated to, and each Noteholder
and the Indenture Trustee hereby delegate and assign, to the fullest extent
permitted by law, the rights of the Indenture Trustee, the Owner Trustee and
each Noteholder in the conduct of any Insolvency Proceeding, 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 Insolvency
Proceeding.
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ARTICLE VIII
TERMINATION
SECTION 8.01. Optional Purchase of All Contracts; Satisfaction and
Discharge of The Indenture.
(a) On any Distribution Date as of which the Pool Balance is 10% or
less of the Original Pool Balance, the Servicer shall have the option to
purchase the remaining Contracts from the Trust (such purchase an "Optional
Purchase"). Notice of the exercise of such option shall be given by the Servicer
to the Issuer, the Indenture Trustee and the Insurer not later than the 10th day
prior to the specified Distribution Date and not earlier than the 15th day of
the month prior to the month of the specified Distribution Date. To exercise
such option, the Servicer shall pay to the Indenture Trustee for the benefit of
the Noteholders and the Insurer, by deposit in the Collection Account on the
Business Day immediately preceding the related Servicer Report Date, the greater
of (i) the sum of (x) the Pool Balance on the date of repurchase, plus (y) any
accrued and unpaid interest on the Contracts and (ii) the sum of (x) the
aggregate unpaid principal amount of the Notes, plus (y) any accrued and unpaid
interest thereon to such Distribution Date plus (z) all amounts due to the
Servicer, the Insurer, the Indenture Trustee and the Owner Trustee under the
Basic Documents. Such purchase shall be deemed to have occurred on the last day
of the related Collection Period.
Any Outstanding Notes will be redeemed concurrently with any
optional purchase described above.
(b) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee, the Insurer and the Indenture Trustee as soon as
practicable after the Servicer has received notice thereof. Such notice shall
conform to the notice described in Section 9.01(c) of the Owner Trust Agreement.
(c) Following the satisfaction and discharge of the Indenture and
the payment in full of the principal of and interest on the Notes and all
amounts owed to the Insurer and the Insurance Policy has been returned to the
Insurer for cancellation, the Residual Interest Certificateholder will succeed
to the rights of the Noteholders hereunder, and the Owner Trustee will succeed
to the rights of, and assume the obligations of, the Indenture Trustee pursuant
to this Agreement.
SECTION 8.02. Termination of this Agreement. This Agreement shall
terminate upon the termination of the Trust, except that obligations to make tax
reporting shall survive so long as such obligations exist.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendment.
(a) This Agreement may be amended by the Issuer, the Seller, the
Servicer and the Indenture Trustee, collectively without the consent of any
Noteholders or the Custodian but with the consent of the Insurer (which consent,
so long as an Insurer Default has occurred and is continuing, shall not be
unreasonably withheld), to cure any ambiguity, to correct or supplement any
provisions in this Agreement which are inconsistent with the provisions herein,
or to make any other provisions with respect to matters or questions arising
under this Agreement which are not inconsistent with the provisions of this
Agreement; provided that any such action shall not materially and adversely
affect the interests of any Noteholder; and provided, further, that any such
amendment shall be deemed not to materially and adversely affect the interests
of any Noteholder if the Person requesting the amendment obtains (i) a letter
from each Rating Agency to the effect that such amendment would not result in a
downgrading or withdrawal of the ratings then assigned to the applicable Notes
by such Rating Agency, without regard to the Insurance Policy and (ii) the
consent of the Insurer.
(b) This Agreement may also be amended by the Issuer, the Seller,
the Servicer and the Indenture Trustee, with the consent of the Insurer, without
the consent of the Custodian and, for so long as the Notes are outstanding and
an Insurer Default shall have occurred and be continuing, the Noteholders
evidencing in the aggregate not less than 51% of the principal amount of the
Notes then outstanding, acting together as a single Class, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the rights of the
Noteholders; provided that no such amendment may (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on the Contracts or distributions that shall be required to be made for
the benefit of the Noteholders, (ii) reduce the aforesaid percentage of the
Noteholders which are required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes or (iii) result in a taxable
event to any of the Noteholders for federal income tax purposes or result in the
Owner Trust being taxable as a corporation for federal income tax purposes.
(c) Promptly after the execution of any such amendment or consent,
the Owner Trustee and the Indenture Trustee shall furnish the written
notification of the substance of such amendment or consent to each Noteholder.
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(d) It shall not be necessary for the consent of Noteholders
pursuant to Section 9.01(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 of evidencing
the authorization by Noteholders of the execution thereof shall be subject to
such reasonable requirements as the Indenture Trustee may prescribe. Any consent
by a Noteholder to an amendment of the Agreement shall be conclusive and binding
on such Noteholder and upon all future Noteholders, of such Note and of any Note
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon such Note.
(e) The Indenture Trustee may, but shall not be obligated to, enter
into any such amendment which affects the Indenture Trustee's own rights, duties
or immunities under this Agreement or otherwise and any such amendment shall be
unenforceable in its entirety absent the execution of such amendment by the
Indenture Trustee. Before consenting to any amendment pursuant to Section
9.01(a), the Indenture Trustee shall, if it requests, be entitled to receive an
Opinion of Counsel (not at its own expense) stating that such amendment is
authorized and permitted under the terms of this Agreement and the Indenture. To
the extent such Opinion of Counsel is provided to the Indenture Trustee, the
Insurer shall also be a recipient thereof.
SECTION 9.02. Protection of Title to Trust.
(a) The Servicer shall execute and file such financing statements
and cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of the Issuer, the Noteholders, the Indenture Trustee
and the Insurer in the Contracts and in the proceeds thereof. The Servicer shall
deliver (or cause to be delivered) to the Indenture Trustee and the 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 nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
Section 9.02(a) seriously misleading within the meaning of Section 9-402(7) of
the UCC, unless it shall have given the Insurer and the Indenture Trustee at
least 30 days' prior written notice thereof and shall promptly file appropriate
amendments to all previously filed financing statements or file new financing
statements, as applicable. Promptly thereafter, the Servicer shall deliver to
the Trust, the Indenture Trustee and the Insurer an Opinion of Counsel stating
that in the opinion of counsel, all actions necessary fully to preserve and
protect the interest of the Trust, the Indenture Trustee, the Noteholders
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and the Insurer in the Contracts, the related Financed Vehicles and the proceeds
thereof have been taken and reciting the details thereof.
(c) The Seller and the Servicer shall give the Insurer, the Owner
Trustee and the Indenture Trustee at least 30 days' prior written notice of any
relocation of the principal executive office or state of incorporation of the
Seller and the Servicer if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall promptly file appropriate amendments or new financing
statements. Promptly thereafter, the Servicer shall deliver to the Trust, the
Indenture Trustee and the Insurer an Opinion of Counsel stating that in the
opinion of counsel, all actions necessary fully to preserve and protect the
interest of the Trust, the Indenture Trustee, the Noteholders and the Insurer in
the Trust Property have been taken and reciting the details thereof. The
Servicer shall at all times maintain each office from which it shall service
Contracts, and its principal executive office, within the United States.
(d) The Servicer shall maintain or cause to be maintained accounts
and records as to each Contract accurately and in sufficient detail to permit
(i) the reader thereof to know at any time the status of such Contract,
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 Contract and the amounts from time to time deposited in or credited to
the Collection Account in respect of such Contract.
(e) The Servicer shall maintain or cause to be maintained its or its
agent's computer systems so that, from and after the time of sale under this
Agreement of the Contracts to the Issuer, the Servicer's master computer records
(including any backup archives) that shall refer to a Contract indicate clearly
the interest of the Issuer and the Indenture Trustee in such Contract and that
such Contract is owned by the Issuer and has been pledged to the Indenture
Trustee.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
retail installment sales contracts to any prospective purchaser, lender or other
transferee, the Servicer shall give or cause to be given to such prospective
purchaser, lender or other transferee computer tapes, records or print-outs
(including any restored from back-up archives) that, if they shall refer in any
manner whatsoever to any Contract, shall indicate clearly that such Contract has
been sold and is owned by the Issuer and has been pledged to the Indenture
Trustee.
(g) The Servicer shall permit the Owner Trustee, the Indenture
Trustee and the Insurer and their respective agents, at any time during normal
business
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hours, to inspect, audit and make copies of and abstracts from the Servicer's
records regarding any Contract.
(h) Upon request, the Servicer shall furnish to the Owner Trustee,
the Indenture Trustee and the Insurer, within five Business Days, a list of all
Contracts then held as part of the Trust Property.
(i) The Servicer shall deliver to the Indenture Trustee and the
Insurer:
(i) promptly after the execution and delivery of this Agreement and
of each amendment hereto, an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) all financing statements and
continuation statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Issuer and the Indenture
Trustee in the Contracts, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given, or
(B) no such action shall be necessary to preserve and protect such
interest; and
(ii) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cut-Off Date an Opinion of Counsel, dated as of a date during
such 90-day period, stating that, in the opinion of such counsel, either
(A) all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the
interest of the Issuer and the Indenture Trustee in the Contracts, and
reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given or (B) no such action shall be
necessary to preserve and protect such interest.
(j) Each Opinion of Counsel referred to in clause (i) or (ii) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(k) The Seller shall, to the extent required by applicable law,
cause the Notes to be registered with the Securities and Exchange Commission
pursuant to Section 12(b) or Section 12(g) of the Securities Exchange Act of
1934, as amended, within the time periods specified in such sections.
(l) For the purpose of facilitating the execution of this Agreement
and for other purposes, this Agreement may be executed simultaneously in any
number of counterparts, each of which counterpart shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same
instrument.
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SECTION 9.03. Governing Law.
This Agreement shall, in accordance with Section 5-1401 of the
General Obligations Law of the State of New York, be governed by, and construed
in accordance with, the laws of the State of New York without regard to its
conflict of laws principles.
SECTION 9.04. 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 in the case
of
(i) the Seller, at AutoNation Receivables Corporation, 200 South
Andrews Avenue, Fort Lauderdale, Florida 33301, Attention: Leland Wilson,
facsimile (954)769-4521;
(ii) the Servicer, at AutoNation Financial Services Corp., 200 South
Andrews Avenue, Fort Lauderdale, Florida 33301, Attention: Leland Wilson,
facsimile (954)769-4521, with a copy to World Omni Financial Corp., 3120
Rider Trail South, Earth City, MO 63045, as Custodian;
(iii) the Insurer, at MBIA Insurance Corporation, 113 King Street,
Armonk, New York 10504, Attention: Insured Portfolio Management -
Structured Finance (ANRC Auto Owner Trust 1999-A), facsimile
(914)765-3810;
(iv) the Issuer or the Owner Trustee, at the Owner Trustee Corporate
Trust Office (with, in the case of the Issuer, a copy to the Seller);
(v) the Indenture Trustee, at the Corporate Trust Office;
(vi) Moody's, to Moody's Investors Service, Inc., ABS Monitoring
Department, 99 Church Street, New York, New York 10007;
(vii) Standard & Poor's, to Standard & Poor's Ratings Services, 55
Water Street, New York, New York 10041, Attention: Asset Backed
Surveillance Department; and
(viii) the Custodian, to AutoNation Financial Services Corp., 200
South Andrews Avenue, Fort Lauderdale, Florida 33301, Attention: Leland
Wilson, facsimile (954)769-4521;
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or, as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties. Any notice required or permitted to be
mailed to a Noteholder shall be given by first class mail, postage prepaid, at
the address of such Noteholder as shown in the Note Register. Any notice so
mailed within the time prescribed herein shall be conclusively presumed to have
been duly given, whether or not such Noteholder shall receive such notice.
SECTION 9.05. Severability of Provisions.
If 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 Notes or the rights of the Noteholders thereof.
SECTION 9.06. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 5.02 and 6.02, neither the Seller nor the Servicer may
transfer or assign all, or a portion of, its rights, obligations and duties
under this Agreement unless such transfer or assignment (i) (A) will not result
in a reduction or withdrawal by any Rating Agency of the rating then assigned by
it to the Notes, without regard to the Insurance Policy and (B) the Issuer, the
Indenture Trustee, acting at the direction of 51% of the Noteholders, and the
Insurer have consented to such transfer or assignment, or (ii) the Insurer, the
Issuer, the Indenture Trustee and the Noteholders of each Class evidencing not
less than 51% of the outstanding amount of Notes of such Class consent thereto.
Any transfer or assignment with respect to the Servicer of all of its rights,
obligations and duties will not become effective until a Successor Servicer has
assumed the Servicer's rights, duties and obligations under this Agreement. In
the event of a transfer or assignment pursuant to clause (ii) above, each Rating
Agency shall be provided with notice of such transfer or assignment.
SECTION 9.07. Third Party Beneficiaries.
The parties hereto intend for the Insurer to be, and the Insurer
hereby is an express third party beneficiary entitled to enforce the provisions
hereof as if it were a party hereto. Except as otherwise specifically provided
herein, the parties to this Agreement hereby manifest their intent that no third
party other than the Insurer shall be deemed a third party beneficiary of this
Agreement, and specifically that the Obligors are not third party beneficiaries
of this Agreement.
SECTION 9.08. Certain Matters Relating to the Insurer.
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So long as an Insurer Default shall not have occurred and be
continuing, the Insurer shall have the right to exercise all rights, including
voting rights, which the Noteholders are entitled to exercise pursuant to this
Agreement, without any consent of such Noteholders; provided that without the
consent of each Noteholder affected thereby, the Insurer shall not exercise such
rights to amend this Agreement in any manner that would (i) reduce the amount
of, or delay the timing of, collections of payments on the Contracts or
distributions which are required to be made on any Note, (ii) adversely affect
in any material respect the interests of any Noteholders, (iii) alter the rights
of any such Noteholder to consent to such amendment or (iv) shall not be
permitted under Section 9.01(b).
All notices, statements or reports required by this Agreement to be
sent to any other party hereto or to the Noteholders at any time shall also be
sent to the Insurer unless the Insurance Policy is no longer in effect (and the
Insurer has been paid all amounts owing to it under this Agreement and the
Insurance Agreement).
Notwithstanding any provision in this Agreement to the contrary, for
so long as an Insurer Default shall have occurred and be continuing, the Insurer
shall not have the right to take any action under this Agreement or to control
or direct the actions of the Trust, the Seller, the Indenture Trustee pursuant
to the terms of this Agreement, nor shall the consent of the Insurer be required
with respect to any action (or waiver of a right to take action) to be taken by
the Trust, the Seller, the Indenture Trustee or the Noteholders; provided that
the consent of the Insurer shall be required at all times (which consent, so
long as an Insurer Default has occurred and is continuing, shall not be
unreasonably withheld) with respect to any amendment of this Agreement.
SECTION 9.09. Headings.
The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 9.10. Assignment by Issuer.
The Seller hereby acknowledges and consents to any mortgage, pledge,
assignment and grant of a security interest by the Issuer to the Indenture
Trustee pursuant to the Indenture for the benefit of the Noteholders and the
Insurer of all right, title and interest of the Issuer in, to and under the
Contracts and/or the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
SECTION 9.11. Limitation of Liability of Owner Trustee.
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Notwithstanding anything contained herein to the contrary, this
instrument has been executed by The Bank of New York (Delaware), not in its
individual capacity but in its capacity as Owner Trustee of the Issuer, and in
no event shall The Bank of New York (Delaware), in its individual capacity or
any beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder,
as to all of which recourse shall be had solely to the assets of the Issuer.
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IN WITNESS WHEREOF, the parties hereto have caused this Sale and
Servicing Agreement to be duly executed by their respective officers as of the
day and year first above written.
ANRC AUTO OWNER TRUST 1999-A,
as Issuer
By: THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity
but solely as Owner Trustee
By: /s/ Reyne A. Macadaeg
------------------------------------
Name: Reyne A. Macadaeg
Title: Assistant Vice President
AUTONATION RECEIVABLES
CORPORATION, as Seller
By: /s/ Leland F. Wilson
------------------------------------
Name: Leland F. Wilson
Title: Treasurer
AUTONATION FINANCIAL SERVICES CORP.,
as Servicer and as Custodian
By: /s/ Kathleen W. Hyle
------------------------------------
Name: Kathleen W. Hyle
Title: Assistant Vice President
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By: /s/ Jennifer Richardson
------------------------------------
Name: Jennifer Richardson
Title: Assistant Vice President
<PAGE>
EXHIBIT A
List of Contracts
(Delivered to the Indenture Trustee at Closing)
A-2
<PAGE>
EXHIBIT B
Location and Account Numbers of Trust Accounts
B-1
<PAGE>
EXHIBIT C
Distribution Date Statement
C-1
<PAGE>
================================================================================
ADMINISTRATION AGREEMENT
by and among
ANRC AUTO OWNER TRUST 1999-A,
as Issuer,
AUTONATION FINANCIAL SERVICES CORP.,
as Administrator,
AUTONATION RECEIVABLES CORPORATION,
as Seller,
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
================================================================================
Dated as of October 1, 1999
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. Duties of the Administrator ........................................3
SECTION 2. Records ...........................................................10
SECTION 3. Compensation ......................................................10
SECTION 4. Additional Information to be Furnished to the Issuer ..............10
SECTION 5. Independence of the Administrator .................................11
SECTION 6. No Joint Venture ..................................................11
SECTION 7. Other Activities of Administrator .................................11
SECTION 8. Term of Agreement; Resignation and Removal of Administrator .......11
SECTION 9. Action upon Termination, Resignation or Removal ..................13
SECTION 10. Notices ..........................................................13
SECTION 11. Amendments .......................................................14
SECTION 12. Successors and Assigns ...........................................15
SECTION 13. Governing Law ....................................................15
SECTION 14. Headings .........................................................15
SECTION 15. Counterparts .....................................................15
SECTION 16. Severability .....................................................15
SECTION 17. Not Applicable to AutoNation Financial Services in
Other Capacities .................................................16
SECTION 18. Limitation of Liability of Owner Trustee and Indenture
Trustee ..........................................................16
SECTION 19. Third-Party Beneficiary ..........................................16
SECTION 20. Nonpetition Covenants ............................................16
SECTION 21. Certain Matters Regarding the Insurer ............................17
i
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This ADMINISTRATION AGREEMENT, dated as of October 1, 1999 (as
amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), is by and among ANRC AUTO OWNER TRUST 1999-A, a Delaware
business trust (the "Issuer"), AUTONATION FINANCIAL SERVICES CORP. ("AutoNation
Financial Services" or in its capacity as administrator, the "Administrator"),
AUTONATION RECEIVABLES CORPORATION (the "Seller") and THE CHASE MANHATTAN BANK,
as Indenture Trustee (the "Indenture Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer is a business trust under the Delaware Business
Trust Act created by an amended and restated owner trust agreement dated as of
October 1, 1999 (as amended, supplemented or otherwise modified and in effect
from time to time, the "Owner Trust Agreement") between the Seller, as
Depositor, and The Bank of New York (Delaware), as Owner Trustee (together with
its successors and assigns in such capacity, the "Owner Trustee").
WHEREAS, the Issuer is issuing 6.16625% Asset-Backed Notes, Class
A-1, 6.54% Asset-Backed Notes, Class A-2, 6.75% Asset-Backed Notes, Class A-3
and 6.94% Asset-Backed Notes, Class A-4 (collectively, the "Notes") pursuant to
an Indenture, dated as of the date hereof (as amended, supplemented or otherwise
modified and in effect from time to time, the "Indenture"), between the Issuer
and the Indenture Trustee (capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto in, or incorporated by
reference into, the Indenture);
WHEREAS, the Issuer is issuing Residual Interest Certificates (the
"Residual Interest Certificates") pursuant to the Owner Trust Agreement;
WHEREAS, the Issuer has entered into certain agreements in
connection with the issuance of the Notes including (i) the sale and servicing
agreement, dated as of the date hereof (as amended, supplemented or otherwise
modified and in effect from time to time, the "Sale and Servicing Agreement"),
between the Issuer, the Seller, AutoNation Financial Services Corp., as
custodian and as servicer (in such capacity, the "Servicer") and the Indenture
Trustee, (ii) a Letter of Representations, dated October 22, 1999, among the
Issuer, the Indenture Trustee, the Owner Trustee and The Depository Trust
Company ("DTC") relating to the Notes (as amended, supplemented or otherwise
modified and in effect from time to time, the "Depository Agreement"), (iii) the
Owner Trust Agreement, (iv) the Insurance Agreement (as defined in the Sale and
Servicing Agreement) and (v) the Indenture (the Sale and Servicing Agreement,
the
<PAGE>
Depository Agreement, the Owner Trust Agreement, the Insurance Agreement and the
Indenture being referred to hereinafter collectively as the "Related
Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer and the
Owner Trustee are required to perform certain duties in connection with (i) the
Notes and the collateral therefor pledged pursuant to the Indenture (the
"Collateral") and (ii) the beneficial ownership interest in the Issuer (the
holder of such interest being referred to herein as the "Depositor");
WHEREAS, the Issuer and the Owner Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Owner Trustee
referred to in the preceding clause and to provide such additional services
consistent with the terms of this Agreement and the Related Agreements as the
Issuer and the Owner Trustee may from time to time request; and
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Duties of the Administrator.
(a) Duties with Respect to the Related Agreements and the Indenture.
(i) The Administrator agrees to perform all its duties as
Administrator and the duties of the Issuer and the Owner Trustee
under the Depository Agreement. In addition, the Administrator shall
consult with the Owner Trustee regarding the duties of the Issuer or
the Owner Trustee under the Related Agreements. The Administrator
shall monitor the performance of the Issuer and shall advise the
Owner Trustee when action is necessary to comply with the respective
duties of the Issuer and the Owner Trustee under the Related
Agreements. The Administrator shall prepare for
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execution by the Issuer, or shall cause the preparation by other
appropriate persons of, all such documents, reports, filings,
instruments, certificates and opinions that it shall be the duty of
the Issuer or the Owner Trustee to prepare, file or deliver pursuant
to the Related Agreements. In furtherance of the foregoing, the
Administrator shall take all appropriate action that the Issuer or
the Owner Trustee is required to take pursuant to the Indenture
including, without limitation, such of the foregoing as are required
with respect to the following matters under the Indenture
(references are to Sections of the Indenture):
(A) the preparation of or obtaining of the documents and
instruments required for execution and authentication of the Notes
and delivery of the same to the Indenture Trustee (Section 2.02);
(B) the duty to cause the Note Register to be kept and to give
the Indenture Trustee and the Insurer notice of any appointment of a
new Note Registrar and the location, or change in location, of the
Note Register (Section 2.04);
(C) the duty to cause the replacement of lost or mutilated
Notes upon the request of the Issuer (Section 2.05);
(D) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the
release of Collateral (Section 2.12);
(E) the duty to cause newly appointed Paying Agents, if any,
to deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 3.03);
4
<PAGE>
(F) the direction to the Paying Agent to deposit monies with
the Indenture Trustee (Section 3.03);
(G) 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 and the Collateral
(Section 3.04);
(H) the preparation of all supplements and amendments to the
Indenture and all financing statements, continuation statements,
instruments of further assurance and other instruments and the
taking of such other action as is necessary or advisable to protect
the Collateral (Section 3.05);
(I) the delivery of the Opinion of Counsel on the Closing Date
as to the Collateral, and the annual delivery of the Officer's
Certificate and certain other statements as to compliance with the
Indenture (Sections 3.06 and 3.09);
(J) the identification to the Indenture Trustee and the
Insurer in an Officer's Certificate of a Person with whom the Issuer
has contracted to perform its duties under the Indenture (Section
3.07(b));
(K) the notification of the Indenture Trustee, the Insurer and
each Rating Agency of a Servicer Default under the Sale and
Servicing Agreement and, if such Servicer Default arises from the
failure of the Servicer to perform any of its duties or obligations
under the Sale and Servicing Agreement with respect to the
Contracts, the taking of all reasonable steps
5
<PAGE>
available to remedy such failure (Section 3.07(d));
(L) the duty to cause the Servicer to comply with the
Servicer's obligations under the Sale and Servicing Agreement
(Section 3.13);
(M) the delivery of written notice to the Indenture Trustee,
Owner Trustee, the Insurer and each Rating Agency of each Event of
Default under the Indenture and each default by the Servicer or the
Seller under the Sale and Servicing Agreement (Section 3.15);
(N) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of
an Officer's Certificate and the obtaining of the Opinion of Counsel
and the Independent Certificate relating thereto (Section 4.01);
(O) the compliance with any written directive of the Indenture
Trustee or the Insurer, as the case may be, with respect to the sale
of the Collateral in a commercially reasonable manner if an Event of
Default shall have occurred and be continuing (Section 5.04);
(P) the preparation of any written instruments required to
give effect to the authority of any co-trustee or separate trustee
and any written instruments necessary in connection with the
resignation or removal of the Indenture Trustee or any co-trustee or
separate trustee (Sections 6.08 and 6.10);
(Q) the preparation and, after execution by the Issuer, the
filing with the Commission, any applicable state agencies and the
Indenture Trustee of documents required to be filed on a periodic
basis with, and
6
<PAGE>
summaries thereof as may be required by rules and regulations
prescribed by, the Commission and any applicable state agencies and
the transmission of such summaries, as necessary, to the Noteholders
(Section 7.03);
(R) the preparation of an Issuer Request and Officer's
Certificate and the obtaining of an Opinion of Counsel and
Independent Certificates, if necessary, for the release of the Trust
Estate (Sections 8.03(b) and 8.04);
(S) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures (Sections 9.01, 9.02 and 9.03);
(T) arranging for the execution and delivery of new Notes
conforming to any supplemental indenture (Section 9.06);
(U) the duty to notify Noteholders, the Insurer and the Rating
Agencies of redemption of the Notes or to cause the Indenture
Trustee to provide such notification (Section 10.02);
(V) the preparation and delivery of all Officer's
Certificates, Opinions of Counsel and Independent Certificates with
respect to any requests by the Issuer to the Indenture Trustee to
take any action under the Indenture (Section 11.01(a));
(W) the preparation and delivery of Officer's Certificates and
the obtaining of Independent Certificates, if necessary, for the
release of property from the lien of the Indenture (Section
11.01(b));
7
<PAGE>
(X) the notification of the Rating Agencies and the Insurer,
upon the failure of the Issuer or the Indenture Trustee to give such
notification, of the information required pursuant to Section 11.04
of the Indenture (Section 11.04); and
(Y) the preparation and delivery to the Indenture Trustee of
any agreements with respect to alternate payment and notice
provisions (Section 11.06).
(ii) The Administrator will:
(A) pay the Indenture Trustee from time to time reasonable
compensation for all services rendered by the Indenture Trustee
under the Indenture (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust);
(B) except as otherwise expressly provided in the Indenture,
reimburse the Indenture Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Indenture Trustee in accordance with any provision of the Indenture
(including the reasonable compensation, expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence, bad faith or
wilful misconduct;
(C) indemnify the Indenture Trustee and its agents for, and
hold them harmless against, any loss, liability or expense incurred
without negligence, bad faith or wilful misconduct on their part,
arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Indenture,
including the reasonable
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costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of
their powers or duties under the Indenture; and
(D) to the extent not paid by the Depositor, indemnify the
Owner Trustee and its agents for, and hold them harmless against,
any loss, liability or expense incurred without willful misconduct
or negligence on their part, arising out of or in connection with
the acceptance or administration of the transactions contemplated by
the Owner Trust Agreement, including the reasonable costs and
expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers
or duties under the Owner Trust Agreement.
(b) Additional Duties.
(i) In addition to the duties set forth in Section I (a)(i),
the Administrator shall perform such calculations and shall prepare
or shall cause the preparation by other appropriate persons of, and
shall execute on behalf of the Issuer or the Owner Trustee, all such
documents, reports, filings, instruments, certificates and opinions
that it shall be the duty of the Issuer or the Owner Trustee to
prepare, file or deliver pursuant to the Related Agreements, and at
the request of the Owner Trustee shall take all appropriate action
that the Issuer or the Owner Trustee is required to take pursuant to
the Related Agreements. In furtherance thereof, the Owner Trustee
shall on behalf of itself and of the Issuer, execute and deliver to
the Administrator and to each successor Administrator appointed
pursuant to the terms hereof, one or more powers of attorney
substantially in the forms of Exhibits A and B hereto, appointing
the Administrator the attorney-in-fact of the Owner Trustee and the
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Issuer for the purpose of executing on behalf of the Owner Trustee
and the Issuer all such documents, reports, filings, instruments,
certificates and opinions. Subject to Section 5 of this Agreement,
and in accordance with the directions of the Owner Trustee, the
Administrator shall administer, perform or supervise the performance
of such other activities in connection with the Collateral
(including the Related Agreements) as are not covered by any of the
foregoing provisions and as are expressly requested by the Owner
Trustee and are reasonably within the capability of the
Administrator.
(ii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible
for promptly notifying the Owner Trustee in the event that any
withholding tax is imposed on the Trust's payments (or allocations
of income) to the Depositor as contemplated in Section 5.02(c) of
the Owner Trust Agreement. Any such notice shall specify the amount
of any withholding tax required to be withheld by the Owner Trustee
pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the
Related Agreements to the contrary, the Administrator shall be
responsible for performance of the duties of the Owner Trustee set
forth in Section 5.05(a), (c) and (d) Section 5.06(a) of the Owner
Trust Agreement with respect to, among other things, accounting and
reports to the Depositor.
(iv) As soon as practicable, but not later than the
Availability Date (as defined below), the Administrator will make
generally available to the Noteholders an earnings statement of the
Trust covering a period of at least 12 months beginning after the
Effective Date which
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will satisfy the provisions of Section 11(a) of the Securities Act.
For the purpose of the preceding sentence, "Availability Date" means
the 90th day after the end of the Trust's fourth fiscal quarter
following the fiscal quarter that includes such Effective Date.
(v) The Administrator shall provide written notice to the
Indenture Trustee upon notification to the Administrator that the
Clearing Agency is no longer willing or able to properly discharge
its responsibilities as described in the Depository Agreement. Upon
the receipt of such notification from the Clearing Agency, the
Administrator shall use reasonable efforts to locate and appoint a
qualified successor Clearing Agency.
(vi) The Administrator shall have the duties of the
Administrator specified in Section 10.02 of the Owner Trust
Agreement required to be performed in connection with the
resignation or removal of the Owner Trustee, and any other duties
expressly required to be per formed by the Administrator under the
Owner Trust Agreement.
(vii) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into
transactions or otherwise deal with any of its Affiliates; provided
that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer or the
Insurer and shall be, in the Administrator's opinion, no less
favorable to the Issuer than would be available from unaffiliated
parties.
(c) Non-Ministerial Matters.
(i) With respect to matters that in the reasonable judgment of
the Administrator
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are non-ministerial, the Administrator shall not take any action
unless authorized pursuant to the Basic Documents and within a
reasonable time before the taking of such action, the Administrator
shall have notified the Owner Trustee and the Insurer of the
proposed action and the Owner Trustee and the Insurer shall not have
unreasonably withheld consent or shall not have provided an
alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include, without limitation:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against
the Issuer (other than in connection with the collection of the
Contracts);
(C) the amendment, change or modification of the Related
Agreements;
(D) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of a successor Administrator or a
Successor Servicer, or the consent to the assignment by the Note
Registrar, Paying Agent or Indenture Trustee of its obligations
under the Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this
Agreement, the Administrator shall not be obligated to, and shall
not, (A) make any payments to the Noteholders under the Related
Agreements, (B) sell the Collateral
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pursuant to clause (iv) of Section 5.04(a) of the Indenture, (C)
take any other action that the Issuer directs the Administrator not
to take on its behalf or (D) take any other action which may be
construed as having the effect of varying the investment of the
Holders.
SECTION 2. Records. The Administrator shall maintain appropriate
books of account and records relating to services performed hereunder, which
books of account and records shall be accessible for inspection by the Issuer,
the Indenture Trustee and the Insurer at any time during normal business hours.
SECTION 3. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to an annual
payment of compensation of $1,000 which shall be solely an obligation of the
Servicer.
SECTION 4. Additional Information to be Furnished to the Issuer. The
Administrator shall furnish to the Issuer, the Indenture Trustee and the Insurer
from time to time such additional information regarding the Collateral as the
Issuer, the Indenture Trustee or the Insurer shall reasonably request.
SECTION 5. Independence of the Administrator. For all purposes of
this Agreement, the Administrator shall be an independent contractor and shall
not be subject to the supervision of the Issuer or the Owner Trustee with
respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the
Administrator shall have no authority to act for or represent the Issuer or the
Owner Trustee in any way and shall not otherwise be deemed an agent of the
Issuer or the Owner Trustee.
SECTION 6. No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the
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Administrator and any of the Issuer, the Owner Trustee or the Indenture Trustee
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
SECTION 7. Other Activities of Administrator. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other Person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Owner
Trustee or the Indenture Trustee.
SECTION 8. Term of Agreement; Resignation and Removal of
Administrator. This Agreement shall continue in force until the dissolution of
the Issuer, upon which event this Agreement shall automatically terminate.
(a) Subject to Sections 8(d) and 8(e), the Administrator may resign
its duties hereunder by providing the Issuer, the Indenture Trustee and the
Insurer with at least 60 days' prior written notice.
(b) Subject to Sections 8(d) and 8(e), the Issuer, with the prior
written consent of the Insurer may, and shall at the direction of the Insurer,
remove the Administrator without cause by providing the Administrator with at
least 60 days' prior written notice.
(c) Subject to Sections 8(d) and 8(e), at the sole option of the
Issuer, the Administrator may, with the prior written consent of the Insurer,
and shall at the direction of the Insurer, be removed immediately upon written
notice of termination from the Issuer to the Administrator and the Insurer if
any of the following events shall occur:
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(i) the Administrator shall default in the performance of any
of its duties under this Agreement and, after notice of such
default, shall not cure such default within 30 days (or, if such
default cannot be cured in such time, shall not give within ten days
such assurance of cure as shall be reasonably satisfactory to the
Issuer and the Insurer);
(ii) a court having jurisdiction in the premises shall enter a
decree or order for relief, and such decree or order shall not have
been vacated within 60 days, in respect of the Administrator in any
involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect or appoint a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official for the Administrator or any substantial part of its
property or order the winding-up or liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for
relief in an involuntary case under any such law, or shall consent
to the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator or similar official for the Administrator or
any substantial part of its property, shall consent to the taking of
possession by any such official of any substantial part of its
property, shall make any general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become
due.
The Administrator agrees that if any of the events specified in
clauses (ii) or (iii) above shall occur, it shall give written notice thereof to
the Issuer,
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the Insurer and the Indenture Trustee within seven days after the occurrence of
such event.
(d) No resignation or removal of the Administrator pursuant to this
Section shall be effective until (i) a successor Administrator acceptable to the
Insurer and the Indenture Trustee shall have been appointed by the Issuer with
the consent of the Insurer and the Indenture Trustee and (ii) such successor
Administrator shall have agreed in writing to be bound by the terms of this
Agreement in the same manner as the Administrator is bound hereunder.
(e) The appointment of any successor Administrator shall be
effective only after satisfaction of the Rating Agency Condition with respect to
the proposed appointment.
SECTION 9. Action upon Termination, Resignation or Removal. Promptly
upon the effective date of termination of this Agreement pursuant to the first
sentence of Section 8 or the resignation or removal of the Administrator
pursuant to Section 8(a), (b) or (c), respectively, the Administrator shall be
entitled to be paid all fees and reimbursable expenses accruing to it to the
date of such termination, resignation or removal. The Administrator shall
forthwith upon such termination pursuant to the first sentence of Section 8
deliver to the Issuer all property and documents of or relating to the
Collateral then in the custody of the Administrator. In the event of the
resignation or removal of the Administrator pursuant to Section 8(a), (b) or
(c), respectively, the Administrator shall cooperate with the Issuer and take
all reasonable steps requested to assist the Issuer in making an orderly
transfer of the duties of the Administrator. The Administrator's payment and
indemnification obligations pursuant to this Agreement which arose as a result
of Administrator's actions while acting as Administrator shall survive the
termination of this Agreement and the resignation and removal of the
Administrator.
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SECTION 10. Notices. Any notice, report or other communication given
hereunder shall be in writing and addressed as follows:
(a) if to the Issuer or the Owner Trustee, to:
ANRC AUTO OWNER TRUST 1999-A
c/o The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
Telecopy: (302)
(b) if to the Administrator, to:
AUTONATION FINANCIAL SERVICES CORP.
200 South Andrews Avenue
Fort Lauderdale, Florida 33301
Attention: Leland Wilson
Telecopy: (954)769-4521
(c) if to the Indenture Trustee, to:
The Chase Manhattan Bank
450 West 33rd Street
14th Floor
New York, New York 10001-2697
Attention: Capital Markets Funding Services
Telecopy: (212)946-8302
(d) if to the Insurer, to:
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Insured Portfolio Management - Structured Finance
(ANRC Auto Owner Trust 1999-A)
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Telecopy: (914)765-3810
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.
SECTION 11. Amendments. This Agreement may be amended from time to
time by a written amendment duly executed and delivered by the parties hereto,
with the prior written consent of the Insurer and the Owner Trustee, but without
the consent of the Noteholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders; provided that such
amendment will not, as so evidenced, upon the request of the Indenture Trustee
or the Insurer, by an Opinion of Counsel satisfactory to the Indenture Trustee
and the Insurer, materially and adversely affect the interest of any Noteholder.
This Agreement may also be amended by the parties hereto with the prior written
consent of the Owner Trustee, the Insurer and the holders of Notes evidencing at
least a majority of the Outstanding Principal Amount of the Notes for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
Noteholders; provided, further, that no such amendment may (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on the Contracts or distributions that are required to
be made for the benefit of the Noteholders or (ii) reduce the aforesaid
percentage of the holders of Notes which are required to consent to any such
amendment, without the consent of the holders of all outstanding Notes.
Notwithstanding the foregoing, the Administrator may not amend this Agreement
without the permission of the Seller, which permission shall not be unreasonably
withheld.
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SECTION 12. Successors and Assigns. This Agreement may not be
assigned by the Administrator unless such assignment is previously consented to
in writing by the Issuer, the Owner Trustee, the Insurer and the Indenture
Trustee and subject to the satisfaction of the Rating Agency Condition in
respect thereof. An assignment with such consent and satisfaction, if accepted
by the assignee, shall bind the assignee hereunder in the same manner as the
Administrator is bound hereunder. Notwithstanding the foregoing, this Agreement
may be assigned by the Administrator without the consent of the Issuer, the
Insurer, the Indenture Trustee or the Owner Trustee to a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator; provided that each Rating Agency shall have
notified the Seller, the Servicer, the Insurer and the Issuer in writing that
such action will not result in a qualification, reduction or withdrawal of its
then-current rating of any Class of Notes (without regard to the Insurance
Policy) and such successor organization executes and delivers to the Issuer,
the Insurer, the Owner Trustee and the Indenture Trustee an agreement, in form
and substance reasonably satisfactory to the Issuer, the Owner Trustee, the
Indenture Trustee and the Insurer, in which such corporation or other
organization agrees to be bound hereunder by the terms of said assignment in the
same manner as the Administrator is bound hereunder. Subject to the foregoing,
this Agreement shall bind any successors or assigns of the parties hereto.
SECTION 13. Governing Law. This Agreement shall, in accordance with
Section 5-1401 of the General Obligations Law of the State of New York, be
governed by, and construed in accordance with, the laws of the State of New York
without regard to conflict of law provisions thereof.
SECTION 14. Headings. The section and subsection headings hereof
have been inserted for convenience of reference only and shall not be construed
to affect the meaning, construction or effect of this Agreement.
SECTION 15. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same agreement.
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SECTION 16. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 17. Not Applicable to AutoNation Financial Services in Other
Capacities. Nothing in this Agreement shall affect any obligation AutoNation
Financial Services Corp. may have in any other capacity.
SECTION 18. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
instrument has been countersigned by The Bank of New York (Delaware), not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer,
and in no event shall The Bank of New York (Delaware) in its individual capacity
or any beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII, of the Owner Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by The Chase Manhattan Bank, as Indenture
Trustee and in no event shall The Chase Manhattan Bank have any liability for
the representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely to
the assets of the Issuer.
20
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SECTION 19. Third-Party Beneficiary. The Owner Trustee and the
Insurer are third-party beneficiaries to this Agreement and are entitled to the
rights and benefits hereunder and may enforce the provisions hereof as if they
were parties hereto.
SECTION 20. Nonpetition Covenants.
(a) Notwithstanding any prior termination of this Agreement, each
party hereto shall not, at any time, acquiesce, petition or otherwise invoke or
cause the Issuer to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Issuer under any
Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, each
party hereto shall not, at any time, acquiesce, petition or otherwise invoke or
cause the Seller to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Seller under any
Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Seller or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Seller.
SECTION 21. Certain Matters Regarding the Insurer. Notwithstanding
any provision in this Agreement to the contrary, in the event an Insurer Default
(as defined in the Sale and Servicing Agreement) shall have occurred and be
continuing, the Insurer shall not have the right to take any action under this
Agreement or to control or direct the actions of the Issuer, the Administrator,
the Indenture Trustee, the Seller or the Owner Trustee pursuant to the terms of
this Agreement, nor
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shall the consent of the Insurer be required with respect to any action (or
waiver of right to take action) to be taken by the Issuer, the Administrator,
the Indenture Trustee, the Seller, the Owner Trustee or the holders of the
Notes; provided that the consent of the Insurer shall be required at all times
with respect to any amendment of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Administration Agreement to be duly executed and delivered as of the day and
year first above written.
ANRC AUTO OWNER TRUST 1999-A,
as Issuer
By: THE BANK OF NEW YORK
(DELAWARE), not in its individual
capacity but solely as Owner Trustee
By: /s/ Betty A. Cocozza
------------------------------------
Name: Betty A. Cocozza
Title: Agent
AUTONATION RECEIVABLES
CORPORATION, as Seller
By: /s/ Leland F. Wilson
------------------------------------
Name: Leland F. Wilson
Title: Treasurer
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By: /s/ Jennifer Richardson
------------------------------------
Name: Jennifer Richardson
Title: Assistant Vice President
AUTONATION FINANCIAL
SERVICES CORP., as Administrator
By: /s/ Kathleen W. Hyle
------------------------------------
Name: Kathleen W. Hyle
Title: Assistant Treasurer
<PAGE>
EXHIBIT A
FORM OF
POWER OF ATTORNEY
STATE OF____________ )
)
COUNTY OF _________ )
KNOW ALL MEN BY THESE PRESENTS, that THE BANK OF NEW YORK (DELAWARE), a
Delaware banking corporation, not in its individual capacity but solely as owner
trustee ("Owner Trustee") for the ANRC Auto Owner Trust 1999-A (the "Trust"),
does hereby make, constitute, and appoint AUTONATION FINANCIAL SERVICES CORP.
as Administrator under the Administration Agreement (as defined below), and its
agents and attorneys, as Attorneys-in-Fact to execute on behalf of the Owner
Trustee or the Trust all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Owner Trustee or the
Trust to prepare, file or deliver pursuant to the Related Agreements (as defined
in the Administration Agreement), including, without limitation, to appear for
and represent the Owner Trustee and the Trust in connection with the
preparation, filing and audit of federal, state and local tax returns pertaining
to the Trust, and with full power to perform any and all acts associated with
such returns and audits that the Owner Trustee could perform, including without
limitation, the right to distribute and receive confidential information,
defend and assert positions in response to audits, initiate and defend
litigation, and to execute waivers of restriction on assessments of
deficiencies, consents to the extension of any statutory or regulatory time
limit, and settlements. For the purpose of this Power of Attorney, the term
"Administration Agreement" means the Administration Agreement, dated as of
October 1, 1999, by and among the Trust, AutoNation Financial Services Corp., as
Administrator, AutoNation Receivables Corporation, as Seller, and The Chase
Manhattan Bank, as Indenture Trustee, as such may be amended, supplemented or
otherwise modified and in effect from time to time.
A-1
<PAGE>
All powers of attorney for this purpose heretofore filed or executed
by the Owner Trustee are hereby revoked.
A-2
<PAGE>
EXECUTED this ___ day of ____________, ____
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity but
solely as Owner Trustee
By:
------------------------------------
Name:
Title:
A-3
