<PAGE>
EXHIBIT 4.3
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FIRST SECURITY BANK, N.A.
As Seller and Servicer,
AND
FIRST SECURITY AUTO OWNER TRUST 20__-__
---------------------------------
SALE AND SERVICING AGREEMENT
---------------------------------
Dated as of _______, 20__
FIRST SECURITY AUTO OWNER TRUST 20__-__
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
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Section 1.1 Definitions................................................................. 1
Section 1.2 Usage of Terms.............................................................. 22
Section 1.3 Calculations................................................................ 22
Section 1.4 References.................................................................. 22
Section 1.5 Section References.......................................................... 22
Section 1.6 Action by or Consent of Securityholders..................................... 23
ARTICLE II
THE TRUST PROPERTY
Section 2.1 Conveyance of Trust Property................................................ 23
Section 2.2 Warranties of the Seller as to Each Receivable.............................. 23
Section 2.3 Warranties as to the Receivables in the Aggregate and Actions
of the Seller............................................................... 27
Section 2.4 Repurchase upon Breach...................................................... 28
Section 2.5 Custody of Receivable Files................................................. 29
Section 2.6 Duties of the Servicer as Custodian......................................... 29
Section 2.7 Instructions; Authority to Act.............................................. 30
Section 2.8 Custodian's Indemnification................................................. 31
Section 2.9 Effective Period and Termination............................................ 31
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
Section 3.1 Duties of the Servicer...................................................... 31
Section 3.2 Collection of Receivable Payments; Credit Deferrals; Optional
Payment Deferrals........................................................... 34
Section 3.3 Realization upon Receivables................................................ 36
Section 3.4 Physical Damage Insurance................................................... 36
Section 3.5 Maintenance of Security Interests in Financed Vehicles...................... 37
Section 3.6 Covenants of the Servicer................................................... 37
Section 3.7 Purchases by the Servicer................................................... 38
Section 3.8 Servicing Compensation...................................................... 39
Section 3.9 Servicer's Certificate...................................................... 39
Section 3.10 Annual Statement as to Compliance........................................... 39
Section 3.11 Independent Certified Public Accountants' Reports........................... 39
Section 3.12 Access to Certain Documentation and Information Regarding Receivables....... 40
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Section 3.13 Reports to the Commission.................................................... 40
Section 3.14 Reports to the Rating Agencies............................................... 40
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO SECURITYHOLDERS
Section 4.1 Establishment of Accounts.................................................... 41
Section 4.2 Collections.................................................................. 43
Section 4.3 Advances..................................................................... 45
Section 4.4 Additional Deposits; Net Deposits............................................ 45
Section 4.5 Distributions................................................................ 46
Section 4.6 Reserve Account.............................................................. 47
Section 4.7 Statements to Securityholders................................................ 48
ARTICLE V
THE SELLER
Section 5.1 Representations and Warranties of the Seller................................. 49
Section 5.2 Liability of the Seller; Indemnities......................................... 50
Section 5.3 Merger or Consolidation of the Seller........................................ 51
Section 5.4 Limitation on Liability of the Seller and Others............................. 52
Section 5.5 Seller May Own Securities.................................................... 52
ARTICLE VI
THE SERVICER
Section 6.1 Representations and Warranties of the Servicer............................... 52
Section 6.2 Liability of the Servicer; Indemnities....................................... 53
Section 6.3 Merger or Consolidation of the Servicer...................................... 55
Section 6.4 Limitation on Liability of the Servicer and Others........................... 55
Section 6.5 Servicer Not to Resign....................................................... 55
Section 6.6 Servicer May Own Certificates................................................ 55
ARTICLE VII
SERVICING TERMINATION
Section 7.1 Events of Servicing Termination.............................................. 56
Section 7.2 Trustee to Act; Appointment of Successor Servicer............................ 58
Section 7.3 Effect of Servicing Transfer................................................. 59
Section 7.4 Notification to Securityholders.............................................. 59
Section 7.5 Waiver of Past Events of Servicing Termination............................... 60
Section 7.6 Transfer of Accounts......................................................... 60
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ARTICLE VIII
TERMINATION
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Section 8.1 Termination of this Agreement................................................ 60
Section 8.2 Optional Purchase of All Receivables......................................... 61
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment.................................................................... 62
Section 9.2 Protection of Title to Trust................................................. 63
Section 9.3 Limitation on Rights of Securityholders...................................... 64
Section 9.4 Governing Law................................................................ 65
Section 9.5 Notices...................................................................... 65
Section 9.6 Severability of Provisions................................................... 65
Section 9.7 Assignment................................................................... 65
Section 9.8 Assignment................................................................... 65
Section 9.9 Intention of Parties......................................................... 65
Section 9.10 Counterparts................................................................. 66
Section 9.11 Limitation of Liability of the Trustees...................................... 66
SCHEDULES
Schedule A Schedule of Receivables
Schedule B Receivables File Locations
EXHIBITS
Exhibit A Form of Servicer's Certificate
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<PAGE>
SALE AND SERVICING AGREEMENT
SALE AND SERVICING AGREEMENT, dated as of ______, 20__ (as amended,
supplemented or otherwise modified and in effect, this "Agreement"), by and
---------
among FIRST SECURITY BANK, N.A., a national banking association, as Seller and
Servicer, and FIRST SECURITY AUTO OWNER TRUST 20__-__, a Delaware business trust
(the "Trust").
In consideration of the premises and of the mutual agreements herein
contained, and other good and valuable consideration, the receipt of which is
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the
-----------
following words and phrases, unless the context otherwise requires, whenever
capitalized shall have the following meanings:
"Account Property" means all amounts and investments held from time to
----------------
time in any Account or the Reserve Account, as the case may be (whether in the
form of deposit accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
"Accounts" mean, collectively, the Collection Account and the Note
--------
Distribution Account.
"Advances" shall have the meaning specified in Section 4.3.
--------
"Administration Agreement" means the Administration Agreement, dated
------------------------
______, 20__ between the Issuer, the Administrator and the Indenture Trustee.
"Administrator" means, First Security Bank, N.A., or any successor
-------------
Administrator under the Administration Agreement.
"Affiliate" means, with respect to any Person, any other Person
---------
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agency Office" means the office of the Issuer maintained pursuant to
-------------
Section 3.2 of the Indenture.
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"Aggregate Class A Noteholders' Interest Distributable Amount" means,
------------------------------------------------------------
with respect to any Distribution Date, the sum of the Class A Noteholders'
Interest Distributable Amounts for all classes of Class A Notes and the Class A
Noteholders' Interest Carryover Shortfall as of the preceding Distribution Date.
"Aggregate Net Losses" means, for any Collection Period, the aggregate
--------------------
amount allocable to principal of all Receivables newly designated during such
Collection Period as Liquidating Receivables minus all Liquidation Proceeds to
the extent allocable to principal collected during such Collection Period with
respect to all Liquidating Receivables (whether or not newly designated as
such).
"Aggregate Receivables Balance" means, as of any date, the sum of the
-----------------------------
Receivable Balance of all outstanding Receivables (other than Liquidating
Receivables) held by the Trust on such date.
"Aggregate Starting Receivables Balance" means $___________.
--------------------------------------
"Amount Financed" in respect of a Receivable means the amount advanced
---------------
under the Receivable and related costs and shown as such in the contract
evidencing such Receivable and as disclosed for truth in lending purposes.
"Authorized Officer" means:
------------------
(a) with respect to the Indenture Trustee, any officer within the
Corporate Trust Office of the Indenture Trustee, including any managing
director, principal, vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
this Agreement and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject,
(b) with respect to the Owner Trustee, any officer of the Owner Trustee
who is authorized to act for the Owner Trustee and whose name appears on a list
of such Authorized Officers furnished to the Indenture Trustee on the Closing
Date by the Owner Trustee, as such list may be amended or supplemented from time
to time, or
(c) with respect to the Issuer, any Authorized Officer of the Owner
Trustee.
"Available Amount" means, with respect to any Distribution Date, the
----------------
sum of Available Interest and Available Principal.
"Available Interest" means, with respect to any Distribution Date, the
------------------
excess of (a) the sum of (i) Interest Collections for such Distribution Date and
(ii) all Advances made by the Servicer with respect to such Distribution Date,
over (b) the amount of Outstanding Advances to be reimbursed on or with respect
to such Distribution Date.
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"Available Principal" means, with respect to any Distribution Date,
-------------------
the sum of the following amounts with respect to the related Collection Period:
(i) that portion of all Collections allocable to principal in accordance with
the terms of the Receivables and the Servicer's customary servicing procedures;
(ii) to the extent attributable to principal, the Repurchase Amount received
with respect to each Receivable repurchased by the Seller or purchased by the
Servicer as of any day in the related Collection Period; (iii) all related
Recoveries, to the extent allocable to principal, and (iv) all related
Liquidation Proceeds, to the extent allocable to principal. "Available
Principal" on any Distribution Date shall exclude all payments and proceeds of
any Receivables the Repurchase Amount of which has been distributed on a prior
Distribution Date.
"Average Delinquency Ratio" means, as of any Distribution Date, the
-------------------------
average of the Delinquency Ratios for the preceding three Collection Periods.
"Average Net Loss Ratio" means, as of any Distribution Date, the
----------------------
average of the Net Loss Ratios for the preceding three Collection Periods.
"Bank " means First Security Bank, N.A., a national bank
----
association.
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
---------------
this Sale and Servicing Agreement, the Administration Agreement, the Indenture
and the other documents and certificates delivered in connection therewith.
"Basic Reserve Account Percentage" means ___%.
--------------------------------
"Book-Entry Notes" mean beneficial interests in the Notes, ownership
----------------
of which shall be evidenced, and transfers of which shall be made, through book
entries by a Clearing Agency as described in Section 2.4 of the Indenture.
"Business Day" means a day on which the Indenture Trustee and
------------
commercial banks located in the State of Utah, the State of Idaho, the State of
Delaware and the City of New York, are open for the purpose of conducting
commercial banking business; provided, however, that for purposes of determining
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any Distribution Date, the term "Business Day" shall mean a day on which the
Indenture Trustee and commercial banks located in the State of New York
generally and the City of New York are open for the purpose of conducting a
commercial banking business.
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
----------------------
Code, 12 Del. Code (S)3801 et seq., as the same may be amended from time to
--------- -------
time.
"Certificate" means any one of the certificates executed by the Owner
-----------
Trustee and authenticated by or on behalf of the Owner Trustee in substantially
the form set forth in Exhibit A to the Trust Agreement.
---------
"Certificate Distribution Account" means the account designated as
--------------------------------
such, established and maintained pursuant to Section 5.1(a) of the Trust
Agreement.
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"Certificate of Trust" means the Certificate of Trust of First
--------------------
Security Auto Owner Trust 20__-__ filed with the Delaware Secretary of State.
"Certificated Security" has the meaning, as of any date, given to such
---------------------
term under the applicable UCC in effect on such date.
"Certificateholder" means the Person in whose name a Certificate shall
-----------------
be registered pursuant to the terms of the Trust Agreement.
"Certificate Register" means the register of Certificates specified in
--------------------
Section 3.4 of the Trust Agreement.
"Certificate Registrar" means the registrar at any time of the
---------------------
Certificate Register, appointed pursuant to Section 3.4(a) of the Trust
Agreement.
"Class A Noteholders' Interest Carryover Shortfall" means, as of the
-------------------------------------------------
close of any Distribution Date, the excess, if any, of the Aggregate Class A
Noteholders' Interest Distributable Amount for such Distribution Date over the
amount that was actually deposited in the Note Distribution Account on the
related Deposit Date in respect of interest on the Class A Notes.
"Class A Noteholders' Interest Distributable Amount" means, (A) with
--------------------------------------------------
respect to the Class A-1 Notes and any Distribution Date, the product of (1) the
outstanding principal balance of the Class A-1 Notes on the preceding
Distribution Date after giving effect to all payments of principal in respect of
the Class A-1 Notes on such preceding Distribution Date (or, in the case of the
first Distribution Date the outstanding principal balance on the Closing Date)
and (2) the product of the Interest Rate for the Class A-1 Notes and a fraction,
the numerator of which is the actual number of days elapsed from the most recent
Distribution Date (or the Closing Date, in the case of the initial period), and
the denominator of which is 360 and (B) with respect to the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes and any Distribution Date, the product
of (i) the outstanding principal balance of such class of Class A Notes on the
preceding Distribution Date after giving effect to all payments of principal in
respect of such Class of Class A Notes on such preceding Distribution Date (or,
in the case of the first Distribution Date, the outstanding principal balance on
the Closing Date) and (ii) the product of the Interest Rate for such class and
1/12 (multiplied by, in the case of the first Distribution Date, a fraction, the
numerator of which is the number of days elapsed from the Closing Date and the
denominator of which is 30).
"Class A Noteholders' Principal Carryover Shortfall" means, on a
--------------------------------------------------
Distribution Date, the excess, if any, of the Class A Noteholders' Principal
Distributable Amount over the amount paid to the Class A Noteholders in respect
of principal on such Distribution Date.
"Class A Noteholders' Principal Distributable Amount" means, for any
---------------------------------------------------
Distribution Date, the sum of (i) the Class A Principal Distributable Amount,
(ii) the Class A Noteholders' Principal Carryover Shortfall for the prior
Distribution Date, and (iii) without duplication, on the Final Scheduled
Distribution Date for a class of Class A Notes, the amount necessary to reduce
the outstanding balance of such Class A Notes to zero.
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"Class A Principal Distributable Amount" means, with respect to any
--------------------------------------
Distribution Date and the related Collection Period, the product of (i) the
Class A Principal Percentage and (ii) the Principal Distributable Amount.
"Class A Notes" means, collectively, the Class A-1 Notes, the Class A-
-------------
2 Notes, the Class A-3 Notes and the Class A-4 Notes.
"Class A-1 Notes" means the Class A-1 ____% Asset Backed Notes in the
---------------
aggregate principal amount of $__________.
"Class A-2 Notes" means the Class A-2 _____% Asset Backed Notes in the
---------------
aggregate principal amount of $___________.
"Class A-3 Notes" means the Class A-3 ____% Asset Backed Notes in the
---------------
aggregate principal amount of $_________.
"Class A-4 Notes" means the Class A-4 ___% Asset Backed Notes in the
---------------
aggregate principal amount of $__________.
"Class B Notes" means the Class B ___% Asset Backed Notes in the
-------------
aggregate principal amount of $__________.
"Class A Principal Percentage" means, with respect to any Distribution
----------------------------
Date, the quotient of (i) the sum of the initial principal balance of the Class
A-2 Notes, the Class A-3 Notes and the Class A-4 Notes divided by (ii) the sum
of the initial principal balance of the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes and the Class B Notes.
"Class B Noteholders' Interest Carryover Shortfall" means, as of the
-------------------------------------------------
close of any Distribution Date, the excess, if any, of the Class B Noteholders'
Interest Distributable Amount for such Distribution Date over the amount that
was actually deposited in the Note Distribution Account on the related Deposit
Date in respect of payment of interest on the Class B Notes.
"Class B Noteholders' Interest Distributable Amount" means, with
--------------------------------------------------
respect to any Distribution Date, the sum of (i) the Class B Noteholders'
Monthly Interest Distributable Amount for such Distribution Date and (ii) the
Class B Noteholders' Interest Carryover Shortfall as of the preceding
Distribution Date.
"Class B Noteholders' Monthly Interest Distributable Amount" means,
----------------------------------------------------------
with respect to any Distribution Date, the product of (i) the outstanding
principal balance of the Class B Notes on the preceding Distribution Date after
giving effect to all payments of principal in respect of the Class B Notes on
such preceding Distribution Date (or, in the case of the first Distribution
Date, the outstanding principal balance on the Closing Date) and (ii) the
product of the Interest Rate for the Class B Notes and 1/12 (multiplied by, in
the case of the first Distribution Date, a fraction, the numerator of which is
the number of days elapsed from the Closing Date and the denominator of which is
30).
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"Class B Noteholders' Principal Carryover Shortfall" means, on a
--------------------------------------------------
Distribution Date, the excess, if any, of the Class B Noteholders' Principal
Distributable Amount over the amount paid to the Class B Noteholders in respect
of principal on such Distribution Date.
"Class B Noteholders' Principal Distributable Amount" means, for any
---------------------------------------------------
Distribution Date, the sum of (i) the Class B Principal Distributable Amount,
(ii) the Class B Noteholders' Principal Carryover Shortfall for the prior
Distribution Date, and (iii) without duplication, on the Final Scheduled
Distribution Date for the Class B Notes, the amount necessary to reduce the
outstanding balance of the Class B Notes to zero.
"Class B Principal Distributable Amount" means, with respect to any
--------------------------------------
Distribution Date and the related Collection Period, the product of (i) the
Class B Principal Percentage and (ii) the Principal Distributable Amount.
"Class B Principal Percentage" means, with respect to any Distribution
----------------------------
Date, the quotient of (i) the initial principal balance of the Class B Notes
divided by (ii) the sum of the initial principal balance of the Class A-2 Notes,
the Class A-3 Notes, the Class A-4 Notes and the Class B Notes.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The initial Clearing Agency shall be The Depository Trust Company.
"Clearing Agency Participant" means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers of securities deposited with the Clearing
Agency.
"Closing Date" means _______, 20__-__.
------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Code Collateral" means any property a security interest in which may
---------------
be perfected by filing under the Relevant UCC.
"Collateral" shall have the meaning given such term in the Granting
----------
Clause of the Indenture.
"Collection Account" means the account designated as such, established
------------------
and maintained pursuant to Section 4.1 of this Agreement.
"Collection Period" means, during the term of this Agreement, the
-----------------
period from and including the 24th day of a calendar month to and including the
23rd day of the next succeeding calendar month or, in the case of the initial
Collection Period, the period from the close of business of the Servicer on the
Cutoff Date to and including _____, 20__. With respect to any Determination
Date, Deposit Date or Distribution Date, the "related Collection Period" shall
mean the Collection
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Period ending during the preceding month in which such Determination Date,
Deposit Date or Distribution Date occurs.
"Collections" means all collections on the Receivables.
-----------
"Commission" means the Securities and Exchange Commission, or any
----------
successor thereto.
"Computer Tape" means the computer tape generated by the Seller which
-------------
provides information relating to the Receivables and which was used by the
Seller in selecting the Receivables conveyed to the Trust hereunder.
"Contract Rate" means, with respect to a Receivable, the rate per
-------------
annum of interest charged on the outstanding receivable balance of such
Receivable.
"Control" over a Security Entitlement shall be considered obtained by
-------
the Indenture Trustee or the Owner Trustee, as applicable, if:
(i) the Indenture Trustee or the Owner Trustee, as applicable, is the
Securities Intermediary for the Account in which such Security
Entitlement is held, or (b) the Indenture Trustee or the Owner
Trustee, as applicable, (1) is registered on the records of the
Securities Intermediary as the person having such a Security
Entitlement against the Securities Intermediary, or (2) has
obtained the agreement, in writing, of the Securities
Intermediary for such Security Entitlement that it will comply
with orders of the Indenture Trustee or the Owner Trustee, as
applicable, regarding the sale or redemption of the Security
Entitlement without further consent of any other person; and
(ii) the "Securities Intermediary" for such Security Entitlement (a)
is the registered owner of the related Financial Asset, (b) is
the holder of the Security Certificate for the related Financial
Asset, or (c) holds its interest in the related Financial Asset
directly through a clearing corporation (as defined in Revised
Article 8).
"Corporate Trust Office" means:
----------------------
(a) with respect to the Indenture Trustee, the principal office of
the Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at date of execution of this
Agreement is located at _______________________, _________________________
Attention: [_________________________], or at such other address as the
Indenture Trustee may designate from time to time by notice to the
Noteholders, the Seller and the Servicer, or the principal corporate trust
office of any successor Indenture Trustee (the address of which the
successor Indenture Trustee will notify the Noteholders, the Seller and the
Servicer); or
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(b) with respect to the Owner Trustee, the principal office of the
Owner Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this
Agreement is located at: ________________________, ________________________
Attention: _________________________, or at such other address as the Owner
Trustee may designate from time to time by notice to the
Certificateholders, the Seller and the Servicer, or the principal corporate
trust office of any successor Owner Trustee (the address of which the
successor Owner Trustee will notify the Certificateholders, the Seller and
the Servicer).
"Credit Deferral" has the meaning specified in Section 3.2.
---------------
"Cumulative Gross Losses" shall equal, on any Distribution Date, the
-----------------------
aggregate amount allocable to principal of all Receivables which have been
designated as Liquidating Receivables with respect to all Collection Periods
ending prior to such Distribution Date.
"Custodian" means First Security Service Company or another custodian
---------
named from time to time.
"Cutoff Date" means _______, 20__.
-----------
"Dealer" means, with respect to a Receivable, the seller of the
------
related Financed Vehicle, who originated and assigned the Receivable relating to
such Financed Vehicle to the Seller under a Dealer Agreement and a Dealer
Assignment.
"Dealer Agreement" means an agreement between the Seller and a Dealer
----------------
relating to the assignment of Receivables to the Seller and all documents and
instruments (other than the related Dealer Assignments) relating thereto.
"Dealer Assignment" means the executed assignment conveying a
-----------------
Receivable from a Dealer to the Seller.
"Dealer Loan" means a motor vehicle retail installment sale contract
-----------
originated by a Dealer and conveyed to the Seller pursuant to a Dealer
Assignment.
"Default Trigger" means _______.
---------------
"Deferral Fee" means the fee associated with any Optional Payment
------------
Deferral or Credit Deferral.
"Definitive Notes" shall mean the Notes specified in Section 2.2 of
----------------
the Indenture.
"Delinquency Ratio" means, for any Collection Period, the ratio,
-----------------
expressed as a percentage, of (i) the principal amount of all outstanding
Receivables (other than Purchased Receivables and Liquidating Receivables) which
are 60 or more days delinquent as of the last day
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of such Collection Period, determined in accordance with the Servicer's
customary practices, divided by (i) the Aggregate Receivables Balance as of the
last day of such Collection Period.
"Delinquency Trigger" means _____%.
-------------------
"Deposit Date" means, with respect to any Distribution Date, the
------------
Business Day preceding such Distribution Date.
"Determination Date" means the tenth day of each month (or, if such
------------------
day is not a Business Day, the next succeeding Business Day).
"Direct Motor Vehicle Loan" means a Receivable that is a motor vehicle
-------------------------
retail installment loan originated by the Seller.
"Distribution Date" means the 15th day of each month (or, if such day
-----------------
is not a Business Day, the next succeeding Business Day), commencing ______ 15,
20__.
"Electronic Ledger" means the electronic master record of the retail
-----------------
installment sale contracts and retail installment loans of the Seller.
"Eligible Deposit Account" means either (i) a segregated account with
------------------------
an Eligible Institution or (ii) a segregated trust account with the trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having trust powers and acting as
trustee for funds deposited in such account, so long as the long-term unsecured
debt rating of such depository institution shall have a credit rating from each
Rating Agency in one of its generic rating categories which signifies investment
grade.
"Eligible Institution" means any depository institution with trust
--------------------
powers (which may include the Seller, the Servicer or either Trustee), organized
under the laws of the United States, any state thereof, the District of Columbia
or any domestic branch of a foreign bank, having combined capital and surplus in
excess of $100,000,000, the deposits of which are insured to the full extent
permitted by law by the Federal Deposit Insurance Corporation, which is subject
to supervision and examination by Federal or state banking authorities and which
has (i) a rating of at least P-1 from Moody's and A-l+ from S&P with respect to
short-term deposit obligations, and (ii) if such institution has issued long-
term unsecured debt obligations, a rating of A2 or higher from Moody's and AA-
or higher from S&P with respect to long-term unsecured debt obligations (or a
depositary institution that otherwise satisfies the Rating Agency Condition).
The Indenture Trustee is an Eligible Institution if it satisfies clause (i) and
(ii) above. If such depository institution publishes reports of condition at
least annually, pursuant to law or the requirements of the aforesaid supervising
or examining authority, then 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.
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"Eligible Investments" shall mean, at any time, any one or more of the
--------------------
following types of investments, each of which shall mature on or prior to the
next succeeding Deposit Date (or, to the extent overnight investments are
permitted under Section 4.1(a)(ii), on the next Distribution Date):
(a) direct marketable obligations of the United States having a
maturity of not more than 30 days from the date of acquisition;
(b) marketable obligations directly and fully guaranteed by the
United States as to the full and timely payment of principal and interest
having a maturity of not more than 30 days from the date of acquisition;
(c) bankers' acceptances and certificates of deposit denominated in
U.S. Dollars in each case having a maturity of not more than 30 days from
the date of acquisition, and issued by any bank with capital, surplus and
undivided profits aggregating at least $100,000,000, the short-term
unsecured securities of which are rated at least A-1+ by S&P and P-1 by
Moody's; and
(d) commercial paper having a maturity of not more than 30 days and
which is rated at least A-l+ by S&P and P-1 by Moody's;
(e) freely redeemable shares in no-load money market funds which
invest solely in obligations, bankers' acceptances, certificates of deposit
and commercial paper of the types described in clauses (a) through (d),
without regard to the limitations as to the maturity of such obligations,
bankers' acceptances, certificates of deposit or commercial paper set forth
in such clauses, rated at least AAAm by S&P and Aaa by Moody's; and
(f) any money market fund so long as it shall be rated by each Rating
Agency as either AAAm, Aaa, as an eligible investment for AAA/Aaa rated
transactions, or, with respect to each Rating Agency, in the highest short-
term rating assigned by such Rating Agency.
Eligible Investments may include, if otherwise eligible pursuant to
paragraphs (a) to (f) above, debt securities of either Trustee, the Seller or
any of their Affiliates for which either Trustee, the Seller or any of their
Affiliates is an investment manager or investment advisor.
"Eligible Servicer" means (a) any Affiliate of the Seller, (b) the
-----------------
Indenture Trustee or (c) any Person which, at the time of its appointment as
Servicer or as a subservicer, (i) has a net worth of not less than $50,000,000,
(ii) is servicing a portfolio of motor vehicle retail installment sale contracts
and/or motor vehicle loans, (iii) is legally qualified, and has the capacity, to
service the Receivables, (iv) has demonstrated the ability to service a
portfolio of motor vehicle retail installment sale contracts and/or motor
vehicle loans similar to the Receivables professionally and competently in
accordance with standards of skill and care that are consistent with prudent
industry standards, and (v) is qualified and entitled to use pursuant to a
license or other written agreement, and agrees to maintain the confidentiality
of, the software which the Servicer or any subservicer uses
-10-
<PAGE>
in connection with performing its duties and responsibilities under this
Agreement or the related subservicing agreement or obtains rights to use, or
develops at its own expense, software which is adequate to perform its duties
and responsibilities under this Agreement or the related subservicing agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Event of Default" has the meaning specified in Section 5.1 of the
----------------
Indenture.
"Event of Servicing Termination" means an event specified in Section
------------------------------
7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Executive Officer" means, with respect to a corporation, the Chief
-----------------
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice Presidents, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"Federal Book-Entry Security" means an obligation issued by the U.S.
---------------------------
Treasury, the Federal Home Loan Mortgage Corporation or the Federal National
Mortgage Association, or any other direct obligation of, or obligation fully
guaranteed as to timely payment of principal and interest by, the United States
of America, that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations.
"Final Scheduled Distribution Date" means, with respect to a class of
---------------------------------
Securities, the Distribution Date occurring in the month set forth below
opposite such Securities:
Class A-1 Notes: _________
Class A-2 Notes: _________
Class A-3 Notes: _________
Class A-4 Notes: _________
Class B Notes: _________
"Financed Vehicle" means the Motor Vehicle, together with all
----------------
accessions thereto, securing an Obligor's indebtedness under a Receivable.
"Financial Asset" has the meaning given such term in Revised Article
---------------
8. As used herein, the Financial Asset "related to" a Security Entitlement is
the Financial Asset in which the entitlement holder (as defined in Revised
Article 8) holding such Security Entitlement has the rights and property
interest specified in Revised Article 8.
"Further Transfer and Servicing Agreements" means the Sale and
-----------------------------------------
Servicing Agreement, Trust Agreement and the Indenture.
-11-
<PAGE>
"Grant" means, 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 the 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 moneys 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.
"Gross Loss Ratio" means, on any Distribution Date, an amount
----------------
expressed as a percentage equal to the quotient of (i) the Cumulative Gross
Losses as of such Distribution Date divided by (ii) the Aggregate Starting
Receivables Balance.
A "Gross Loss Trigger Event" shall occur if, on any Distribution Date,
------------------------
the Gross Loss Ratio exceeds ___.
"Holder" means the Person in whose name a Note or Certificate is
------
registered on the Note Register or the Certificate Register, as applicable.
"Indenture" means the Indenture dated as of the dated hereof between
---------
the Trust and __________________________, as Indenture Trustee, as amended and
supplemented from time to time.
"Indenture Trustee" means _________________________, or any successor
-----------------
indenture trustee under the Indenture.
"Independent" means, when used with respect to a specific Person, that
-----------
the Person (i) is in fact independent of the Issuer, and any other obligor upon
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (ii)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (iii) is not connected with the Issuer, any
such other obligor, the Seller or any Affiliate of any of the foregoing Persons
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
"Initial Receivable Balance" means, with respect to a Receivable, the
--------------------------
aggregate amount advanced toward the purchase price of all Financed Vehicles
related to such Receivable, including insurance premiums, federal excise taxes,
sales taxes and other items customarily financed as part of Motor Vehicle Loans
and related costs, less payments received from the Obligor prior to the related
Cutoff Date allocable to principal in accordance with the terms of the
Receivable.
"Insurance Policies" means all comprehensive and collision, fire and
------------------
theft insurance policies maintained by the Obligors naming the Seller as an
additional insured or loss payee and any credit and disability and physical
damage insurance policies maintained by the Obligors and benefitting any holder
of the Receivables.
-12-
<PAGE>
"Interest Accrual Date" means _______, 20__.
---------------------
"Interest Collections" means, for any Distribution Date, the sum of
--------------------
the following amounts for the related Collection Period: (i) that portion of the
Collections on the Receivables received during the related Collection Period
that is allocable to interest in accordance with the terms of the Receivables
and the Servicer's customary procedures, (ii) all related Liquidation Proceeds,
to the extent allocable to interest, (iii) to the extent allocable to interest,
all related Recoveries, and (iv) to the extent attributable to interest, the
Repurchase Amount of all Receivables that are repurchased by the Seller or
purchased by the Servicer as of any day in the related Collection Period.
"Interest Collections" for any Distribution Date shall exclude all payments and
proceeds of any Receivables the Repurchase Amount of which has been distributed
on a prior Distribution Date.
"Interest Rate" means, with respect to the Class A-1 Notes, _____% per
-------------
annum, with respect to the Class A-2 Notes, _____% per annum, with respect to
the Class A-3 Notes, ____% per annum, with respect to the Class A-4 Notes,
_____% per annum and, with respect to the Class B Notes, ____% per annum.
"Interested Parties" means the Trust and each other party identified
------------------
in the Transfer and Servicing Agreements as having an interest as owner,
trustee, secured party or Securityholder with respect to the Trust Property.
"Investment Company Act" means the Investment Company Act of 1940, as
----------------------
amended and supplemented from time to time.
"Issuer" means First Security Auto Owner Trust 2000-1, a Delaware
------
business trust.
"Issuer Order" and "Issuer Request" means a written order or request
------------ --------------
signed in the name of the Issuer by an Authorized Officer of the Owner Trustee
and delivered to the Indenture Trustee.
"Lien" means any security interest, lien, charge, pledge, equity or
----
encumbrance of any kind other than liens for taxes not yet due and payable,
mechanics' liens, any liens that attach by operation of law, and any liens being
contested by appropriate measures.
"Liquidating Receivable" means, with respect to any Collection Period,
----------------------
a Receivable (other than a Purchased Receivable) which the Servicer, on behalf
of the Trust, has determined to charge off during such Collection Period in
accordance with its customary servicing practices; provided, however, that any
-------- -------
Receivable which the Seller or the Servicer is obligated to repurchase or
purchase shall be deemed not to be a Liquidating Receivable during a Collection
Period unless the Seller or the Servicer fails to deposit the Repurchase Amount
on the related Deposit Date when due, unless such Receivable is otherwise
repurchased or purchased on or prior to the last day of the Collection Period in
which such Receivable is determined to be a Liquidating Receivable.
"Liquidation Proceeds" means, with respect to any Distribution Date
--------------------
and a Receivable that became a Liquidating Receivable during the related
Collection Period, (i) insurance proceeds
-13-
<PAGE>
received during such Collection Period by the Servicer, with respect to
insurance policies relating to the Financed Vehicles or the Obligors, (ii)
amounts received by the Servicer during such Collection Period from a Dealer in
connection with such Liquidating Receivable pursuant to the exercise of rights
under a Dealer Agreement, and (iii) the monies collected by the Servicer (from
whatever source, including proceeds of a sale of a Financed Vehicle or
deficiency balance recovered after the charge-off of the related Receivable)
during such Collection Period on such Liquidating Receivable, net of any
expenses incurred by the Servicer in connection with the collection of such
Receivable and the disposition of the Financed Vehicle and any payments required
by law to be remitted to the Obligor, but, in any event, not less than zero.
Liquidation Proceeds shall be applied first to the Receivable Balance thereof
and then to accrued and unpaid interest on the Receivable.
"Moody's" means Moody's Investors Service, Inc.
-------
"Motor Vehicle" means a new or used automobile or light-duty truck
-------------
which is the subject of a retail installment sale contract originated by a
dealer or a retail installment loan originated by the Seller.
"Net Loss Ratio" means, for any Collection Period, an amount,
--------------
expressed as a percentage, equal to (i) the product of (a) the Aggregate Net
Losses minus Recoveries for such Collection Period, and (b) twelve divided by
(ii) the average of the Aggregate Receivables Balances on each of the first day
of such Collection Period and the last day of such Collection Period.
"Note Depositary " means the depositary from time to time selected by
---------------
the Indenture Trustee on behalf of the Trust in whose name the Notes are
registered prior to the issuance of Definitive Notes. The first Note Depositary
shall be Cede & Co., the nominee of the initial Clearing Agency.
"Note Distribution Account" means the account designated as such,
-------------------------
established and maintained pursuant to Section 4.1(a)(ii) of this Agreement.
"Note Owner" means with respect to a Book-Entry Note, the Person who
----------
is the beneficial owner 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.
"Note Pool Factor" means, for each class of Notes, a seven-digit
----------------
decimal which the Servicer will compute prior to each distribution with respect
to such class of Notes expressing the remaining outstanding principal balance of
such class of Notes, as of the close of such date (after giving effect to
payments to be made on such date), as a fraction of the initial outstanding
principal balance of such class of Notes.
"Noteholders" means holders of record of the Notes pursuant to the
-----------
Indenture and, with respect to any class of Notes, holders of record of such
class of Notes pursuant to the Indenture.
-14-
<PAGE>
"Noteholders' Principal Distributable Amount" means, for any
-------------------------------------------
Distribution Date, the sum of (i) the Class A Noteholders' Principal
Distributable Amount and (ii) the Class B Noteholders' Principal Distributable
Amount.
"Note Register" means, with respect to any class of Notes, the
-------------
register of such Notes specified in Section 2.4 of the Indenture.
"Note Registrar" means, the registrar at any time of the Note
--------------
Register, appointed pursuant to Section 2.4 of the Indenture.
"Notes" means, collectively, the Class A-1 Notes, the Class A-2 Notes,
-----
the Class A-3 Notes, the Class A-4 Notes and the Class B Notes.
"Obligations" means any principal, interest, penalties, fees,
-----------
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any indebtedness.
"Obligor" means the purchaser or the co-purchasers of a Financed
-------
Vehicle purchased in part or in whole by the execution and delivery of the
related Receivable or the borrower or co-borrowers under the related Receivables
the proceeds of which were applied to purchase in part or in whole the Financed
Vehicle, and any other co-signer of the Receivable who owes or may be liable for
payments under such Receivable.
"Officer's Certificate" means a certificate signed by the Chairman,
---------------------
the President, any Vice President, the Treasurer or the Cashier of the Seller or
the Servicer, as the case may be, and delivered to the Indenture Trustee or the
Owner Trustee, as applicable.
"Opinion of Counsel" means a written opinion of counsel (who may be
------------------
outside counsel to the Seller or the Servicer). In addition, for purposes of the
Indenture: (i) such counsel shall be satisfactory to the Indenture Trustee; (ii)
the opinion shall be reasonably acceptable in form and substance to the
Indenture Trustee and addressed to the Indenture Trustee and (iii) the opinion
shall comply with any applicable requirements of Section 11.1 of the Indenture
and shall be in form and substance satisfactory to the Indenture Trustee.
"Optional Payment Deferral" shall have the meaning specified in
-------------------------
Section 3.2(c).
"Outstanding" means, with respect to the Notes, as of the date of
-----------
determination, all Notes theretofore authenticated and delivered under the
Indenture except:
(i) Notes theretofore cancelled by the Indenture Trustee or delivered
to the Indenture Trustee 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,
-------
-15-
<PAGE>
notice of such redemption has been duly given pursuant to the Indenture or
provision therefor, satisfactory to the Indenture Trustee, has been made;
and
(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 in determining whether the Holders of the requisite
-------- -------
outstanding amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Indenture Trustee shall
be fully protected in conclusively relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that an
Authorized Officer of the Indenture Trustee actually knows to be so owned shall
be so disregarded.
"Outstanding Advances" means, with respect to any Distribution Date,
--------------------
the aggregate of all Advances made by the Servicer with respect to prior
Distribution Dates that have not been reimbursed pursuant to Section 4.3(c).
"Owner Trust Estate" means all right, title and interest of the Trust
------------------
in and to the property and rights assigned to the Trust pursuant to Article II
of this Agreement, all funds on deposit from time to time in the Collection
Account and the Certificate Distribution Account and all other property of the
Trust from time to time, including any rights of the Owner Trustee and the Trust
pursuant to this Agreement and the Administration Agreement.
"Owner Trustee" means _____________________, a _____________________,
-------------
or any successor owner trustee under the Trust Agreement.
"Paying Agent" means, with respect to the Indenture, the Indenture
------------
Trustee or any other Person that meets the eligibility standards for the
Indenture Trustee specified in Section 6.11 of the Indenture and is authorized
by the Trust to make the payments to and distributions from the Collection
Account and the Note Distribution Account, including payment of principal of or
interest on the Notes on behalf of the Trust and, with respect to the Trust
Agreement, any paying agent or co-paying agent appointed pursuant to Section 3.9
of the Trust Agreement that meets the eligibility standards for the Owner
Trustee specified in Section 6.13 of the Trust Agreement.
"Person" means a legal person, including any individual, corporation,
------
limited liability company, estate, partnership, joint venture, association,
joint stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Physical Property" means (i) bankers' acceptances, commercial paper,
-----------------
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of
-16-
<PAGE>
Section 9-105(1)(i) of the Relevant UCC and are susceptible of physical delivery
and (ii) certificated securities (as defined in Section 8-102 of the Relevant
UCC).
"Predecessor Note" means, 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 2.5 of the Indenture 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.
"Principal Distributable Amount" means, with respect to any
------------------------------
Distribution Date, the excess of (i) Available Principal for such Distribution
Date plus Realized Losses with respect to the related Collection Period over
(ii) all related Recoveries, to the extent allocable to principal with respect
to the related Collection Period.
"Principal Payment Amount" means, with respect to any Distribution
------------------------
Date, the lesser of (x) the Noteholders' Principal Distributable Amount and (y)
the Total Available Amount remaining after payment of the Total Servicing Fee,
the Aggregate Class A Noteholders' Interest Distributable Amount and the Class B
Noteholders' Interest Distributable Amount.
"Proceeding" means any suit in equity, action at law or other judicial
----------
or administrative proceeding.
"Purchased Receivable" means, at any time, a Receivable as to which
--------------------
payment of the Repurchase Amount has previously been made by the Seller or the
Servicer pursuant to this Agreement.
"Rating Agency" means at any time any nationally recognized
-------------
statistical rating agency providing a rating for the Notes at the request of the
Seller at such time.
"Rating Agency Condition" means, with respect to any action, the
-----------------------
condition that each Rating Agency shall have been given at least 10 days (or
such shorter period as is acceptable to each Rating Agency) prior notice thereof
and that each of the Rating Agencies (other than Moody's) shall have notified
the Seller, the Servicer, the Indenture Trustee and the Issuer in writing that
such action shall not result in a downgrade or withdrawal of the then current
rating of the Notes.
"Realized Losses" means, with respect to any Distribution Date and a
---------------
Receivable that became a Liquidating Receivable during the related Collection
Period, the excess of (i) the Receivable Balance of such Receivable as of the
first day of the related Collection Period over (ii) Liquidation Proceeds
received with respect to such Receivable during such Collection Period, to the
extent allocable to principal.
"Receivable" means a motor vehicle retail installment sale contract or
----------
a motor vehicle retail installment loan described in the Schedule of Receivables
and all proceeds thereof and payments thereunder, but excluding any Purchased
Receivables.
-17-
<PAGE>
"Receivable Balance" means, as of the last day of the related
------------------
Collection Period, with respect to any Receivable, the Initial Receivable
Balance minus the sum, in each case computed in accordance with the terms of the
Receivable, of (i) that portion of payments due on and after the Cutoff Date and
on or prior to the last day of the related Collection Period allocated to
principal, (ii) any prepayments applied by the Servicer to reduce the Receivable
Balance and (iii) that portion of the following received and allocated to
principal by the Servicer: proceeds from any Insurance Policies covering the
Financed Vehicle or Financed Vehicles, Liquidation Proceeds and proceeds from
any Dealer Agreement. The Obligor on a Receivable secured by multiple Financed
Vehicles may prepay an amount corresponding to the outstanding principal balance
for one or more of such Financed Vehicles and the security interest in such
vehicles will generally be released.
"Receivable File" means, with respect to a Receivable, the electronic
---------------
entries, documents, instruments and writings specified in Section 2.5.
"Record Date" means, with respect to each Collection Period and the
-----------
related Distribution Date, the day immediately preceding such Distribution Date
(or, if Definitive Notes are issued, the last day of such Collection Period).
"Recoveries" means, with respect to any Distribution Date, all monies
----------
received by the Servicer with respect to any Liquidating Receivable during the
related Collection Period if such Collection Period follows the Collection
Period in which such Receivable became a Liquidating Receivable, net of the sum
of (i) any expenses incurred by the Servicer in connection with the collection
of such Receivable and the disposition of the Financed Vehicle (to the extent
not previously reimbursed) and (ii) any payments required by law to be remitted
to the Obligor but, in any event, not less than zero.
"Redemption Price" means, in the case of a redemption of the Notes
----------------
pursuant to Section 10.01 of the Indenture, the unpaid principal amount of the
Class A-4 Notes and the Class B Notes to be redeemed pursuant to Section 10.1 of
the Indenture plus accrued and unpaid interest thereon.
"Relevant UCC" shall mean the Uniform Commercial Code as in effect in
------------
the relevant jurisdiction, as amended from time to time.
"Repurchase Amount" of any Receivable means, with respect to any
-----------------
Deposit Date, an amount equal to the sum of (i) the outstanding Receivable
Balance of such Receivable as of the last day of the related Collection Period
and (ii) an amount equal to the amount of accrued and unpaid interest on such
Receivable Balance at the related Contract Rate through the last day of the
related Collection Period, in each case, after giving effect to Collections on
such Receivable in such Collection Period.
"Required Rating" means a rating with respect to short-term deposit
---------------
obligations of at least P-1 by Moody's and at least A-1 by S&P and, if such
institution has issued long-term unsecured debt obligations, a rating of A2 or
higher from Moody's and A or higher from S&P with respect to long-term unsecured
debt obligations.
-18-
<PAGE>
"Reserve Account" means the fund established pursuant to Section 4.1
---------------
and maintained as such pursuant to Section 4.6.
"Reserve Account Floor Amount" means $__________.
----------------------------
"Reserve Account Increase Percentage" means ___%.
-----------------------------------
"Reserve Account Initial Deposit" means, with respect to the Closing
-------------------------------
Date, $_________.
"Reserve Account Property" has the meaning specified in the Granting
------------------------
Clause of the Indenture.
"Reserve Account Trigger Starting Date" means the _________, 20__
-------------------------------------
Distribution Date.
"Responsible Officer" means, with respect to the Owner Trustee, any
-------------------
officer within the Corporate Trust Office of the Owner Trustee with direct
responsibility for the administration of the Trust and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"Revised Article 8" means Revised Article 8 (1994 Version) (and
-----------------
corresponding amendments to Article 9) as promulgated in 1994 by the National
Conference of Commissioners on Uniform State Laws, in the form in which it has
been adopted in the State of New York.
"S&P" means Standard & Poor's Ratings Service, a Division of the
---
McGraw Hill Companies.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
----------------------------
dated as of _____, 20__ between the Bank and the Trust, as amended and
supplemented from time to time.
"Scheduled Payment" means, for any Collection Period for any
-----------------
Receivable, the amount indicated in such Receivable as required to be paid by
the Obligor in such Collection Period (without giving effect to deferments of
payments pursuant to Section 3.2 or any rescheduling in any insolvency or
similar proceedings).
"Schedule of Receivables" means the list identifying the Receivables
-----------------------
attached hereto as Schedule A.
"Secretary of State" means the Secretary of State of Delaware unless a
------------------
different jurisdiction is specified.
"Securities" means the Notes and the Certificates.
----------
"Securities Act" means the Securities Act of 1933, as amended.
--------------
-19-
<PAGE>
"Security Certificate" has the meaning given such term in Revised
--------------------
Article 8.
"Security Entitlement" has the meaning given such term in Revised
--------------------
Article 8.
"Securityholder" means any of the Noteholders or Certificateholders.
--------------
"Seller" means First Security Bank, N.A. (including all Persons merged
------
into or otherwise consolidated with, and all other predecessors thereto) in its
capacity as seller of the Receivables to the Trust under this Agreement, and
each successor thereto (in the same capacity) pursuant to Section 6.3.
"Servicer" means First Security Bank, N.A., in its capacity as
--------
servicer of the Receivables under this Agreement, each successor thereto (in the
same capacity) pursuant to Section 7.3, and each successor servicer appointed
and acting pursuant to Section 7.2.
"Servicer's Certificate" has the meaning specified in Section 3.9.
----------------------
"Servicing Fee" means, with respect to any Distribution Date, an
-------------
amount equal to the product of (i) one-twelfth of the Servicing Fee Rate and
(ii) the Aggregate Receivables Balance as of the first day of the preceding
Collection Period.
"Servicing Fee Rate" shall be 1.0% per annum, calculated on the basis
------------------
of a 360-day year consisting of twelve 30-day months.
"Servicing Officer" means any officer of the Servicer involved in, or
-----------------
responsible for, the administration and servicing of the Receivables, whose name
appears on a list of servicing officers attached to an Officer's Certificate
furnished to the Indenture Trustee and the Owner Trustee by the Servicer on the
Closing Date, as such list may be amended from time to time by the Servicer in
writing.
"Simple Interest Method" means the method of allocating a fixed level
----------------------
payment between principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the Contract
Rate multiplied by the unpaid Receivable Balance multiplied by the period of
time elapsed since the preceding payment of interest was made and the remainder
of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
--------------------------
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Account Balance" with respect to any Distribution
---------------------------------
Date, will equal the Basic Reserve Account Percentage of the Aggregate
Receivables Balance, except that the Specified Reserve Account Balance will
never be less than the lesser of (i) the Reserve Account Floor Amount and (ii)
the aggregate outstanding principal amount of the Notes. The Specified Reserve
Account Balance will be calculated as the Reserve Account Increase Percentage of
the
-20-
<PAGE>
Aggregate Receivables Balance for any Distribution Date (beginning on the
Reserve Account Trigger Starting Date) on which the Average Net Loss Ratio
exceeds the Default Trigger or the Average Delinquency Ratio exceeds the
Delinquency Trigger. The Specified Reserve Account Balance may be reduced or the
definition thereof otherwise modified without the consent of the Noteholders if
the Rating Agencies confirm in writing, after having received notice thereof,
that such reduction or modification will not result in a reduction or withdrawal
of the rating of the Notes; provided, however that Moody's shall receive such
notice but not be required to issue a confirmation of ratings.
"Supplemental Servicing Fee" shall have the meaning set forth in
--------------------------
Section 3.8.
"Temporary Notes" means the Notes specified in Section 2.3 of the
---------------
Indenture.
"TIA" means the Trust Indenture Act of 1939, as amended and
---
supplemented from time to time.
"Total Available Amount" means, for each Distribution Date, the sum of
----------------------
the Available Amount and all cash or other immediately available funds on
deposit in the Reserve Account immediately prior to such Distribution Date
(excluding investment earnings).
"Total Servicing Fee" means, on any Distribution Date, the Servicing
-------------------
Fee for the related Collection Period and any unpaid Servicing Fees from prior
Distribution Dates.
"TRADES" means regulations promulgated by the U.S. Department of the
------
Treasury governing book-entry Treasury bonds, notes and bills, 31 C.F.R. Part
357, which replace prior Treasury regulations and which designate Revised
Article 8 as the applicable governing law.
"TRADES Effective Date" means with respect to a Federal Book-Entry
---------------------
Security, the date (which was January 1, 1997, in the case of securities issued
by the U.S. Treasury) on which TRADES or an equivalent set of regulations
becomes effective.
"Transfer and Servicing Agreements" means this Agreement, the Trust
---------------------------------
Agreement and the Indenture.
"Trust" means the First Security Auto Owner or Trust 20__-__ created
-----
by the Trust Agreement.
"Trust Agreement" means the Amended and Restated Trust Agreement dated
---------------
as of the date hereof between the Seller and _________________________, as Owner
Trustee, as amended and supplemented from time to time.
"Trustees" means the Owner Trustee and the Indenture Trustee.
--------
"Trust Estate" means all money, instrument, rights and other property
------------
that are subject to or intended to be subject to the lien and security interest
of the Indenture Trustee for the benefit
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of the Noteholders (including all property and interests Granted to the
Indenture Trustee), including all proceeds thereof, the Reserve Account and the
Reserve Account Property pledged to the Indenture Trustee pursuant to the
Indenture.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended and supplemented from time to time.
"Trust Property" means the Receivables; all monies due or received
--------------
under the Receivables after the close of business of the Servicer on the Cutoff
Date; the Collection Account and the Certificate Distribution Account and such
amounts as from time to time may be held therein (including the Account Property
related thereto); security interests in the Financed Vehicles; the Seller's
rights (if any) to receive proceeds from claims on Insurance Policies covering
the Financed Vehicles or the Obligors; the Seller's rights relating to the
Receivables under the Dealer Agreements and Dealer Assignments; the Seller's
rights to all documents and information contained in the Receivable Files; the
rights of the Trust under this Agreement (including the right to receive
payments under the circumstances specified herein from the Reserve Account); and
all proceeds (within the meaning of the Relevant UCC) of the foregoing.
"UCC" means the Uniform Commercial Code, as amended from time to time.
---
"Uncertificated Security" as of any date, has the meaning given to
-----------------------
such term under the Relevant UCC as in effect on such date.
Section 1.2 Usage of Terms. With respect to all terms used in this
--------------
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation."
Section 1.3 Calculations. All calculations of the amount of
------------
interest accrued on the Certificates during any Collection Period and all
calculations of the amount of the Servicing Fee payable with respect to a
Collection Period shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
Section 1.4 References. All references to the first day of a
----------
Collection Period shall refer to the opening of business on such day. All
references to the last day of a Collection Period shall refer to the close of
business of the Servicer on such day.
Section 1.5 Section References. All section references shall be to
------------------
Sections in this Agreement unless otherwise specified.
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Section 1.6 Action by or Consent of Securityholders. Whenever any
---------------------------------------
provision of this Agreement refers to action to be taken, or consented to, by
Securityholders, such provision shall be deemed to refer to Securityholders of
record as of the Record Date immediately preceding the date on which such action
is to be taken, or consented to by Securityholders.
ARTICLE II
THE TRUST PROPERTY
Section 2.1 Conveyance of Trust Property. (a) In consideration of
----------------------------
the Trust's delivery of the Securities to, or upon the written order of, the
Seller, the Seller hereby sells, transfers, assigns and conveys to the Trust,
upon the terms and conditions hereof, the Trust Property, without recourse. The
sale, transfer, assignment and conveyance made hereunder shall not constitute
and is not intended to result in an assumption by any Trustee, the Trust or any
Securityholder of any obligation of the Seller to the Obligors, the Dealers, or
any other Person in connection with the Receivables and the other Trust Property
or any agreement, document or instrument related thereto.
(b) The Seller intends that the transfer and conveyance of the Trust
Property to the Trust hereunder constitutes a complete sale and assignment of
all of the Seller's right, title and interest in, to and under the Trust
Property to the Trust and that the beneficial interest of the Seller in, and
title to, the Trust Property will not be a part of the Seller's estate in the
event of any liquidation, reorganization or similar insolvency proceeding with
respect to the Seller. In the event that the transfer hereunder is not
respected as a complete sale and assignment of the Trust Property to the Trust,
then, in such event, the Seller hereby grants to the Trust a security interest
in all of the Seller's right, title and interest in the Trust Property. This
Agreement shall constitute a security agreement under applicable law.
Section 2.2 Warranties of the Seller as to Each Receivable. The
----------------------------------------------
Seller hereby makes the following warranties as to each Receivable conveyed by
it to the Trust hereunder on which the Trust shall rely in accepting the Trust
Property in trust and executing and delivering the Securities. Unless otherwise
indicated, such warranties shall speak as of the Closing Date, but shall survive
the sale, transfer, and assignment of the Receivables and the other Trust
Property to the Trust and the pledge under the Indenture.
(i) Characteristics of Receivables. The Receivable
------------------------------
has been fully and properly executed by the parties thereto and (a) (x) has
been originated by the Seller in the ordinary course of its business or (y)
has been originated by a Dealer for the retail sale of a Motor Vehicle in
the ordinary course of such Dealer's business, and has been purchased by
the Seller from such Dealer in the ordinary course of the Seller's business
and has been validly assigned by such Dealer to the Seller, (b) is secured
by a valid, subsisting, and enforceable security interest in favor of the
Seller in the Financed Vehicle (subject to administrative delays and
clerical errors on the part of the applicable government agency) prior in
right to the security interest of any other creditor, which security
interest is assignable together with such Receivable, and has been so
assigned, by the Seller to the
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Trust, (c) contains or is accompanied by a security agreement which
contains customary and enforceable provisions such that the rights and
remedies of the secured party are adequate for realization of the benefits
of the security interest in the subject collateral, (d) provides at
origination for level monthly payments (provided that the first and the
--------
last payment may be less than or minimally more than the level payment),
which fully amortize the Amount Financed over the original term and
provides for interest at the related Contract Rate and (e) in the event of
a complete prepayment, provides for a payment that will fully pay the
Receivable Balance of such Receivable as of the first day of the Collection
Period in which the Receivable is fully prepaid, together with interest
accrued at least to the date of prepayment at the related Contract Rate.
(ii) Schedule of Receivables. The information set
-----------------------
forth in the Schedule of Receivables with respect to such Receivable has
been produced from the Electronic Ledger and was true and correct as of the
close of business of the Servicer on the Cutoff Date; and the Initial
Receivable Balance and the Contract Rate of the Receivable have been
accurately and correctly calculated as of the Cutoff Date.
(iii) Compliance with Laws. To the best knowledge of
--------------------
the Seller, the Receivable, and the sale of the related Financed Vehicle,
complied at the time it was originated or made, and will comply as of the
Closing Date, in all material respects with all requirements of applicable
federal, state, and local laws, and regulations thereunder, including, to
the extent applicable, usury laws, the Federal Truth-in-Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, Federal Reserve
Board Regulations B and Z, and any other consumer credit, equal
opportunity, and disclosure laws; provided, however, that if,
-------- -------
notwithstanding the best knowledge of the Seller, any Receivable, or the
sale of the related Financed Vehicle, fails to comply with applicable law
in the manner and to the extent set forth herein, the Seller shall
repurchase such Receivable in accordance with the terms and conditions set
forth in Section 2.4, but such failure to comply with such laws shall not
constitute a breach of this warranty except for purposes of Section 2.4.
(iv) Binding Obligation. The Receivable constitutes
------------------
the genuine, legal, valid, and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally.
(v) No Government Obligor. The Obligor on the
---------------------
Receivable is not the United States of America or any State thereof or any
local government, or any agency, department, political subdivision or
instrumentality of the United States of America or any State thereof or any
local government.
(vi) Receivables in Force. The Receivable has not
--------------------
been satisfied, subordinated, or rescinded and the Financed Vehicle has not
been released from the lien granted by the Receivable in whole or in part.
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(vii) No Amendment or Waiver. No material provision of
----------------------
the Receivable has been amended, waived, altered or modified in any
respect, except pursuant to a document, instrument or writing included in
the Receivable File and reflected in the Electronic Ledger and no such
amendment, waiver, alteration or modification causes such Receivable not to
conform to the other warranties contained in this Section.
(viii) No Defenses. The Receivable is not subject to
-----------
any right of rescission, setoff, counterclaim or defense, including the
defense of usury, and the operation of any of the terms of the Receivable,
or the exercise of any right thereunder, will not render the Receivable
unenforceable in whole or in part or subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and no
such right of rescission, setoff, counterclaim or defense has been asserted
with respect thereto.
(ix) No Liens. To the best knowledge of the Seller,
--------
there are no liens or claims, including liens for work, labor, materials or
unpaid state or federal taxes relating to the Financed Vehicle, that are or
may be liens prior to, or equal to or coordinate with, the lien granted by
the Obligor.
(x) No Default. Except for payment delinquencies
----------
continuing for a period of not more than 30 days as of the Cutoff Date, no
default, breach, violation, or event permitting acceleration under the
terms of any Receivable exists and no continuing condition that with notice
or lapse of time, or both, would constitute a default, breach, violation,
or event permitting acceleration under the terms of any Receivable has
arisen; and the Seller has not waived any of the foregoing.
(xi) Insurance. Except to the extent the Servicer
---------
does not customarily force place insurance, the Financed Vehicle securing
each Receivable is insured under an Insurance Policy, the premiums for
which have been paid in full, and such Insurance Policy is in full force
and effect.
(xii) Good Title. The Receivable has not been sold,
----------
assigned, pledged or otherwise conveyed by the Seller to any Person other
than the Trust, and, immediately prior to the transfer and assignment
herein contemplated, the Seller had good and marketable title to the
Receivable free and clear of any encumbrance, equity, lien, pledge, charge,
claim, security interest or other right or interest of any other Person,
was the sole owner thereof and had full right and power to transfer and
assign the Receivable to the Trust. Immediately upon the transfer and
assignment of the Receivable to the Trust, the Trust shall have good and
marketable title to the Receivable, free and clear of any encumbrance,
equity, lien, pledge, charge, claim, security interest or other right or
interest of any other Person; and all filings and actions required by the
Relevant UCC with respect to the transfer of Receivables associated with
the sale of the same have been accomplished for the purpose of complying
with the Relevant UCC provisions governing the relative priority of
interests of parties in the Receivables.
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(xiii) Lawful Assignment. The Receivable has not been
-----------------
originated in, and is not subject to the laws of, any jurisdiction under
which the sale, transfer, and assignment of such Receivable hereunder or
pursuant to transfers of the Securities are unlawful, void, or voidable.
(xiv) All Filings Made. All filings have been made,
----------------
including filings under the Relevant UCC, which are necessary in any
jurisdiction to cause the ownership and title interests of the Trust in the
Receivables to be afforded priority over competing claims of the holders of
security interests or other claims against whom such filings can assure
priority.
(xv) Valid Security Interest. On the Closing Date,
-----------------------
there will exist a valid, subsisting and enforceable first priority
perfected security interest in the Financed Vehicle securing the Receivable
(subject to administrative delays and clerical errors on the part of the
applicable government agency and to any statutory or other lien arising by
operation of law after the Closing Date which is prior to such security
interest). With respect to the foregoing, the Seller hereby covenants to
take all action necessary such that, at such time as enforcement of such
security interest is sought, there shall exist a valid, subsisting and
enforceable first priority perfected security interest in the Financed
Vehicle for the benefit of the Trust (subject to administrative delays and
clerical errors on the part of the applicable government agency and any
statutory or other lien arising by operation of law after the Closing Date
which is prior to such interest).
(xvi) Capacity of Parties. All parties to the
-------------------
Receivable had capacity to execute the Receivable.
(xvii) Chattel Paper. The Receivable is "chattel
-------------
paper" as defined in the Relevant UCC.
(xviii) One Original. There is only one executed
------------
original of each Receivable.
(xix) Obligations; No Impairment. The Seller has duly
--------------------------
fulfilled all obligations on its part to be fulfilled under, or in
connection with, the Receivable and has done nothing to impair the rights
of the Trust or the Securityholders in the Receivable or the proceeds
thereof.
(xx) No Fraud or Misrepresentation. To the best
-----------------------------
knowledge of the Seller, in the case of a Receivable originated by a
Dealer, the Receivable was originated by a Dealer and sold by such Dealer
to the Seller without any conduct constituting fraud or misrepresentation
on the part of such Dealer; provided, however, that if, notwithstanding the
-------- -------
best knowledge of the Seller, any Receivable was originated and sold under
conduct constituting fraud or misrepresentation on the part of such Dealer,
the Seller shall repurchase such Receivable in accordance with the terms
and conditions of Section 2.4, with the
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existence of such conduct not constituting a breach of this warranty,
except for purposes of Section 2.4.
(xxi) Possession. Immediately prior to the Closing
----------
Date, the Seller (or an Affiliate thereof) will have possession of the
original Receivable and the related Receivable File, and there are and
there will be no custodial agreements in effect materially adversely
affecting the right or ability of the Seller to make, or cause to be made,
any delivery required hereunder.
(xxii) Bulk Transfer Laws. The transfer, assignment
------------------
and conveyance of the Receivable and Receivable Files by the Seller
pursuant to this Agreement is not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction.
Section 2.3 Warranties as to the Receivables in the Aggregate and
-----------------------------------------------------
Actions of the Seller. The Seller hereby makes the following warranties as to
---------------------
the Receivables conveyed by it to the Trust hereunder on which the Trust shall
rely in accepting the Trust Property in trust and executing and delivering the
Securities. Unless otherwise indicated, such warranties shall speak as of the
Closing Date, but shall survive the sale, transfer, and assignment of the
Receivables and the other Trust Property to the Trust and the pledge under the
Indenture.
(i) Amounts. The aggregate Initial Receivables
-------
Balance of the Receivables are equal to the Aggregate Starting Receivables
Balance.
(ii) Individual Characteristics. The Receivables have
--------------------------
the following individual characteristics as of the close of business of the
Servicer on the Cutoff Date: (a) the obligations of the Obligors on the
Receivables are secured by security interests in new or used automobiles or
light-duty trucks; (b) each Receivable has a Contract Rate of at least
_____ and less than _____; (c) each Receivable had a remaining maturity, as
of the Cutoff Date, of not less than ___ months and not more than ___
months; (d) each Receivable had a remaining Receivable Balance of not less
than _____ and not more than _________ as of the Cutoff Date; (e) no
Receivable was more than ___ days delinquent as of the Cutoff Date; (f) no
Financed Vehicle had been repossessed as of the Cutoff Date; (g) each
Receivable is a motor vehicle retail installment sale contract or motor
vehicle retail installment loan; (h) each Receivable provides for
allocation of payments between principal and interest by the Simple
Interest Method; (i) the Dealers of the Financed Vehicles, if any, have no
participation in, or other right to receive, any proceeds of the
Receivable; and (j) each Receivable was originated on or after __________.
The Receivables were selected utilizing selection procedures that were not
adverse to the Securityholders.
(iii) Aggregate Characteristics. The Receivables had
-------------------------
the following characteristics in the aggregate as of the Cutoff Date: (a)
approximately _____ of the Aggregate Starting Receivables Balance was
attributable to loans for purchases of new Financed Vehicles, and
approximately _____ of the Aggregate Starting Receivables Balance was
attributable to loans for purchases of used Financed Vehicles; (b)
approximately _____
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of the Aggregate Starting Receivables Balance was attributable to
Receivables the mailing addresses of the Obligors with respect to which are
located in the States of [Washington, Idaho and Utah]; (c) the weighted
average Contract Rate of the Receivables was _____; (d) approximately _____
of the Aggregate Starting Receivables Balance was attributable to
Receivables originated by the Seller; (e) approximately __________ of the
Aggregate Starting Receivables Balance was attributable to Receivables that
are Dealer Loans; and (f) approximately ______ of the Aggregate Starting
Receivables Balance was attributable to Receivables that are subject to a
repurchase obligation by the originating Dealer upon default and
repossession.
(iv) Computer Tape. The Computer Tapes made available
-------------
by the Seller to the Trustees were complete and accurate as of the Cutoff
Date and include a description of the same Receivables that are described
in the Schedule of Receivables.
(v) Marking Records. By the Closing Date, the Seller
---------------
will have caused the portions of the Electronic Ledger relating to the
Receivables to be clearly and unambiguously marked to show that such
Receivables constitute part of the Trust Property and are owned by the
Trust in accordance with the terms of the trust created hereunder.
(vi) No Assignment. As of the Closing Date, the
-------------
Seller shall not have taken any action to convey any right to any Person
that would result in such Person having a right to payments received under
the Insurance Policies, the Dealer Agreements, the Dealer Assignments or
payments due under the Receivables that is senior to, or equal with, that
of the Trust.
Section 2.4 Repurchase upon Breach. The Seller, the Servicer, the
----------------------
Owner Trustee or the Indenture Trustee, as the case may be, shall inform the
other parties promptly, in writing, upon the actual discovery of any breach or
failure to be true of the warranties (including in the case of Sections
2.2(iii), (ix) and (xx) any breach or failure which would have occurred if such
warranty had not been made to the best knowledge of the Seller) made by the
Seller pursuant to Section 2.2 or Section 2.3. Unless the breach or failure
shall have been cured by the last day of the Collection Period which includes
the 30th day after the date on which the Seller becomes aware of, or receives
written notice from the Owner Trustee, the Indenture Trustee or the Servicer of,
such breach or failure, the Seller shall repurchase from the Trust, without
recourse, representation or warranty, other than that the Owner Trustee, on
behalf of the Trust, has not imposed any liens on the Receivable to be
repurchased, any Receivable, the interests of the Trust and the Securityholders
in which is materially and adversely affected by such breach or failure. Such
purchase shall occur as of the last day of such Collection Period. In
consideration of the repurchase of a Receivable hereunder, the Seller shall
remit the Repurchase Amount of such Receivable, no later than the close of
business (New York time) on the applicable Deposit Date, in the manner specified
in Section 4.3(b). Any breach of a representation relating to the status of a
Receivable as a Simple Interest Receivable or the Contract Rate of a Receivable
shall be deemed to materially and adversely affect the Securityholders. Except
as provided in Section 5.2, the sole remedy of the Trust, the Owner Trustee, the
Indenture Trustee, or the Securityholders with respect to a breach or failure to
be true of the
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warranties made by the Seller pursuant to Section 2.2 or Section 2.3 shall be to
require the Seller to repurchase Receivables pursuant to this Section.
Section 2.5 Custody of Receivable Files. To assure uniform quality
---------------------------
in servicing the Receivables and to reduce administrative costs, the Trust, upon
the execution and delivery of this Agreement, revocably appoints the Servicer,
as custodian, and the Servicer accepts such appointment and revocably appoints
First Security Service Company, its agent to act as custodian on behalf of the
Trust and on behalf of the Indenture Trustee which was granted a security
interest pursuant to the Indenture, of the following documents or instruments,
which are hereby constructively delivered to the Trust and the Indenture Trustee
with respect to each Receivable (collectively, a "Receivable File"):
---------------
(i) the original of the Receivable;
(ii) any documents evidencing the existence of any
Insurance Policies customarily held by the Servicer;
(iii) copies (which may be electronic copies) of the
original credit application, fully executed by the Obligor;
(iv) either (x) the original certificate of title, or
such other documents as the Seller shall keep on file, in accordance with
its customary procedures, evidencing the security interest of the Seller in
the Financed Vehicle or the efforts (including the proof of application for
notice of lien or other evidence of such security interest) made by the
Seller to perfect such security interest; or (y) with respect to
jurisdictions in which the certificate of title or other evidence of
ownership is not issued to the holder of a lien, evidence of the Seller's
security interest in the Financed Vehicle (or the efforts made by the
Seller to perfect such security interest (including the proof of
application for notice of lien or other evidence of such security
interest)), in each case issued by the appropriate governmental agency of
the State in which such Financed Vehicle is registered;
(v) electronic entries and originals or true copies
of all documents, instruments or writings relating to extensions,
amendments or waivers of the Receivable;
(vi) in the case of a Dealer Loan, the Dealer
Assignment; and
(vii) any and all other documents or electronic
records that the Seller or the Servicer, as the case may be, shall keep on
file, in accordance with its customary procedures, relating to the
Receivable, the Obligor or the Financed Vehicle.
Section 2.6 Duties of the Servicer as Custodian. (a) Safekeeping.
----------------------------------- -----------
The Servicer, in its capacity as custodian, shall hold, or cause an Affiliate to
hold, the Receivable Files on behalf of the Trust and the Indenture Trustee for
the benefit of all present and future Securityholders, and maintain such
accurate and complete accounts, records, and computer systems pertaining to each
Receivable as shall enable the Servicer and the Trust and the Trustees to comply
with the terms and
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provisions of this Agreement applicable to it. In performing its duties as
custodian hereunder, the Servicer shall act with reasonable care, exercising the
degree of skill and care that the Servicer exercises with respect to similar
motor vehicle retail installment sale contracts owned and/or serviced by it and
that is consistent with industry standards. The Servicer shall implement written
policies and procedures, signed by a Servicing Officer, with respect to the
handling and custody of the Receivable Files, so that the integrity and physical
possession of the Receivable Files shall be maintained, and, in general, shall
attend to all details in connection with maintaining custody of the Receivable
Files as agent of the Trust and on behalf of the Indenture Trustee. The Servicer
shall also maintain a current inventory of the Receivables and conduct, or cause
to be conducted, periodic audits (to the extent required by Section 3.11) of the
Receivable Files held by it under this Agreement and the related accounts,
records, and computer systems, and shall otherwise maintain the Receivable Files
in such a manner as shall enable the Owner Trustee to verify, if the Owner
Trustee so elects, the accuracy of the record keeping of the Servicer; provided
that the Indenture Trustee shall have no obligation to perform such verification
unless directed in writing by a majority of the Noteholders. The Servicer shall
promptly report to the Trustees any failure on its part to hold the Receivable
Files and maintain its accounts, records, and computer systems as herein
provided, and promptly take appropriate action to remedy any such failure.
(b) Maintenance of and Access to Records. The Servicer shall
------------------------------------
maintain each Receivable File at the location specified in Schedule B to this
Agreement, or at such other office of the Servicer or an Affiliate within the
State of Utah or Idaho (or, in the case of any successor servicer, within the
State in which its principal place of business is located) as shall be specified
to the Trustees by 30 days' prior written notice. The Servicer shall make
available to the Trustees or their Authorized Officers (or, when requested in
writing by either Trustee, to its attorneys or auditors) and to Securityholders
(only in such cases where a Securityholder is required by applicable statutes or
regulations to review such documentation) the Receivable Files and the related
accounts, records, and computer systems maintained by the Servicer at such times
during the normal business hours of the Servicer as the Trustees shall
reasonably instruct.
(c) Release of Documents. Upon written instructions from the Trust,
--------------------
the Servicer shall release any document in the Receivable Files to the Trust,
the Trust's agent, or the Trust's designee, as the case may be, at such place or
places as the Trust may designate, as soon thereafter as is practicable. Any
document so released shall be handled by the Trust with due care and returned to
the Servicer for safekeeping as soon as the Trust or its agent or designee, as
the case may be, shall have no further need therefor.
(d) Title to Receivables. The Servicer agrees that, in respect of any
--------------------
Receivable held by it as custodian hereunder, the Servicer will not at any time
have or in any way attempt to assert any interest in such Receivable or the
related Receivable File, other than solely for the purpose of collecting or
enforcing the Receivable for the benefit of the Trust and that the entire
equitable interest in such Receivable and the related Receivable File shall at
all times be vested in the Trust, subject to the lien of the Indenture Trustee.
Section 2.7 Instructions; Authority to Act. The Servicer shall be
------------------------------
deemed to have received proper instructions from the Trust with respect to the
Receivable Files upon its receipt of
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written instructions signed by an Authorized Officer of the Trust (or, as
appropriate, the Owner Trustee on behalf of the Trust). A certified copy of
excerpts of bylaws or certain resolutions of the Board of Directors of the Trust
(or, as appropriate, the Owner Trustee on behalf of the Trust) shall constitute
conclusive evidence of the authority of any such Authorized Officer to act and
shall be considered in full force and effect until receipt by the Servicer of
written notice to the contrary.
Section 2.8 Custodian's Indemnification. The Servicer, in its
---------------------------
capacity as custodian, shall indemnify and hold harmless the Trust and each
Trustee, their officers, directors, employees and agents and the Securityholders
from and against any and all liabilities, obligations, losses, compensatory
damages, payments, costs or expenses (including legal fees if any) of any kind
whatsoever that may be imposed on, incurred, or asserted against the Trust or
either of the Trustees as the result of any act or omission relating to the
maintenance and custody of the Receivable Files; provided, however, that the
-------- -------
Servicer shall not be liable hereunder to the extent, but only to the extent,
that such liabilities, obligations, losses, compensatory damages, payments,
costs or expenses result from the willful misfeasance, bad faith, or negligence
of the Trust or any Trustee, respectively. The obligations of the Servicer, in
its capacity as custodian under this Section 2.8, shall survive the resignation
or removal of the Servicer as custodian under Section 2.9 hereof.
Section 2.9 Effective Period and Termination. The Servicer's
--------------------------------
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section 2.9.
If the Servicer resigns as a Servicer under Section 7.5, or if all of the rights
and obligations of the Servicer shall have been terminated under Section 8.1,
the appointment of the Servicer as custodian hereunder may be terminated by the
Trust or by any Persons to whom the Trust has assigned its rights hereunder, in
the same manner as the Trust or such Persons may terminate the rights and
obligations of the Servicer under Section 7.1. The Trust may terminate the
Servicer's appointment as a custodian hereunder at any time with cause, or with
30 days' prior notice without cause, upon written notification to the Servicer.
As soon as practicable after any termination of such appointment the Servicer,
at its own expense, shall deliver, or cause to be delivered, the Receivable
Files to the Trust, the Trust's agent or the Trust's designee at such place or
places as the Trust may reasonably designate. Notwithstanding any termination
of the Servicer as custodian hereunder (other than in connection with a
termination resulting from the termination of the Servicer, as such, pursuant to
Section 7.1), the Trust agrees that, from and after the date of such
termination, and for so long as the Servicer is acting as such pursuant to this
Agreement, the Trust or the Trust's Agent shall provide, or cause the successor
custodian to provide, access to the Receivable Files to the Servicer, at the
times as the Servicer shall request, for the purpose of carrying out its duties
and responsibilities with respect to the servicing of the Receivables hereunder.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
Section 3.1 Duties of the Servicer. (a) The Servicer, acting alone
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and/or through subservicers as provided in this Section 3.1, shall administer
the Receivables with reasonable care.
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The Servicer's duties shall include, but not be limited to, the collection and
posting of all payments, responding to inquiries by Obligors on the Receivables,
or by federal, state, or local governmental authorities, investigating
delinquencies, reporting tax information to Obligors, furnishing monthly and
annual statements to the Trustees with respect to distributions, monitoring the
status of the Insurance Policies with respect to Financed Vehicles and providing
collection and repossession services in the event of Obligor default. The
Servicer shall also administer and enforce all rights and responsibilities of
the holder of the Receivables provided for in the Dealer Agreements, the Dealer
Assignments and the Insurance Policies, to the extent that such Dealer
Agreements, Dealer Assignments and Insurance Policies relate to the Receivables,
the Financed Vehicles or the Obligors. In performing its duties as Servicer
hereunder, the Servicer will exercise that degree of skill and care that the
Servicer exercises with respect to similar motor vehicle retail installment sale
contracts or motor vehicle retail installment loans owned and/or serviced by the
Servicer and that is consistent with prudent industry standards. Without
limiting the generality of the foregoing, the Servicer is hereby authorized and
empowered by the Trust to execute and deliver, on behalf of all Interested
Parties, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Receivables or to the Financed Vehicles, all in accordance with this
Agreement; provided, however, that notwithstanding the foregoing, the Servicer
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shall not, except pursuant to an order from a court of competent jurisdiction,
release an Obligor from payment of any unpaid amount under any Receivable or
waive the right to collect the unpaid balance (including accrued interest) of
any Receivable from the Obligor, except in connection with a de minimis
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deficiency which the servicer would not attempt to collect in accordance with
its customary procedures. If the Servicer shall commence a legal proceeding to
enforce a Receivable, the Trust shall thereupon be deemed to have automatically
assigned such Recievable to the Servicer, which assignment shall be solely for
purposes of collection. The Trust shall furnish the servicer with any powers of
attorney and other documents or instruments necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties hereunder.
From time to time during the term of this Agreement, the Servicer may
enter into agreements with (i) one or more Affiliates for the servicing and
administration of certain of the Receivables; provided, however, that any such
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subservicer shall be and shall remain, for so long as it is acting as
subservicer, an Eligible Servicer, and any fees paid to such subservicer shall
be paid by the Servicer and not out of the proceeds of the Trust, and any such
subservicer shall agree to service the Receivables in a manner consistent with
the terms of this Agreement or (ii) subcontractors who are in the business of
performing specific duties delegated to it.
(b) References in this Agreement to actions taken, to be taken,
permitted to be taken, or restrictions on actions permitted to be taken by the
Servicer in servicing the Receivables and other actions taken, to be taken,
permitted to be taken, or restrictions on actions to be taken with respect to
the Trust Property shall include actions taken, to be taken, permitted to be
taken, or restrictions on actions permitted to be taken by a subservicer or
subcontractor on behalf of the Servicer and references herein to payments,
Recoveries or Liquidation Proceeds received by the Servicer shall include
payments, Recoveries or Liquidation Proceeds received by a subservicer or
subcontractor, irrespective of whether such payments, Recoveries or Liquidation
Proceeds are actually deposited in the Collection Account by such subservicer or
subcontractor. Any subservicing agreement will contain terms and provisions
substantially identical to the terms and provisions of
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this Agreement and such other terms and provisions as are not inconsistent with
this Agreement and as the Servicer and the subservicer have agreed.
(c) The Servicer shall be entitled to terminate any subservicing or
subcontracting agreement in accordance with the terms and conditions of such
subservicing or subcontracting agreement and without any limitation by virtue of
this Agreement; provided, however, that, in the event of termination of any
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subservicing or subcontracting agreement by the Servicer, the Servicer shall
either act directly as servicer of the related Receivable or enter into a
subservicing or subcontracting agreement with a successor subservicer or
subcontractor which will be bound by the terms of the related subservicing or
subcontracting agreement.
(d) As a condition to the appointment of any subservicer other than
an Affiliate of the Seller, the Servicer shall notify each Trustee in writing
and the Rating Agencies before such assignment becomes effective and such
subservicer shall be required to execute and deliver an instrument in which it
agrees that, for so long as it acts as subservicer of the Receivables and the
other Trust Property being serviced by it, the covenants, conditions,
indemnities, duties, obligations and other terms and provisions of this
Agreement applicable to the Servicer hereunder shall be applicable to it as
subservicer, that it shall be required to perform its obligations as subservicer
for the benefit of the Trust as if it were the Servicer hereunder (subject,
however, to the right of the Servicer to direct the performance of such
obligations in accordance with this Agreement) and that, notwithstanding any
provision of a subservicing agreement to the contrary, such subservicer shall be
directly liable to the Trust (notwithstanding any failure by the Servicer to
perform its duties and obligations hereunder) for the failure by such
subservicer to perform its obligations hereunder or under any subservicing
agreement, and that (notwithstanding any failure by the Servicer to perform its
respective duties and obligations hereunder) the Trust may enforce the
provisions of this Agreement and any subservicing agreement against the
subservicer, without diminution of such obligations or liabilities by virtue of
any subservicing agreement, by virtue of any indemnification provided thereunder
or by virtue of the fact that the Servicer is primarily responsible hereunder
for the performance of such duties and obligations, as if a subservicer alone
were servicing and administering, under this Agreement, the Receivables and the
other Trust Property being serviced by it under the subservicing agreement.
(e) Notwithstanding any subservicing or subcontracting agreement, any
of the provisions of this Agreement relating to agreements or arrangements
between the Servicer or a subservicer or subcontractor or reference to actions
taken through such Persons or otherwise, the Servicer shall remain obligated and
liable to the Trust, each Trustee and the Securityholders for the servicing and
administering of the Receivables and the other Trust Property in accordance with
the provisions of this Agreement (including for the deposit of payments,
Recoveries and Liquidation Proceeds received by a subservicer or subcontractor,
irrespective of whether such payments, Recoveries or Liquidation Proceeds are
actually remitted to the Servicer or deposited in the Collection Account by such
subservicer or subcontractor; provided that if such amounts are so deposited,
--------
the Servicer shall have no further obligation to do so) without diminution of
such obligation or liability by virtue of such subservicing or subcontracting
agreements or arrangements or by virtue of indemnification from a subservicer or
subcontractor, to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Receivables
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and the other Trust Property. The Servicer shall be entitled to enter into any
agreement with a subservicer or subcontractor for indemnification of the
Servicer, and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
(f) In the event the Servicer shall for any reason no longer be
acting as such (including by reason of the occurrence of an Event of Servicing
Termination), the successor servicer may, in its discretion, thereupon assume
all of the rights and obligations of the outgoing Servicer under a subservicing
agreement. In such event, the successor servicer shall be deemed to have assumed
all of the outgoing Servicer's interest therein and to have replaced the
outgoing Servicer as a party to such subservicing agreement to the same extent
as if such subservicing agreement had been assigned to the successor servicer,
except that the outgoing Servicer shall not thereby be relieved of any liability
or obligation on the part of the outgoing Servicer to the subservicer under such
subservicing agreement. The outgoing Servicer shall, upon request of the Trust,
but at the expense of the outgoing Servicer, deliver to the successor servicer
all documents and records relating to each such subservicing agreement and the
Receivables and the other Trust Property then being serviced thereunder and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the subservicing
agreement to the successor servicer. In the event that the successor servicer
elects not to assume a subservicing agreement, the outgoing Servicer, at its
expense, shall cause the subservicer to deliver to the successor servicer all
documents and records relating to the Receivables and the other Trust Property
being serviced thereunder and all amounts held (or thereafter received) by such
subservicer (together with an accounting of such amounts) and shall otherwise
use its best efforts to effect the orderly and efficient transfer of servicing
of the Receivables and the other Trust Property being serviced by such
subservicer to the successor servicer. The relationship of the Servicer (and of
any successor to the Servicer as servicers under this Agreement) to the Trust
under this Agreement is intended by the parties to be that of independent
contractors and not that of joint venturers, partners or agents.
Section 3.2 Collection of Receivable Payments; Credit Deferrals;
----------------------------------------------------
Optional Payment Deferrals. (a) The Servicer shall make reasonable efforts to
--------------------------
collect all payments called for under the terms and provisions of the
Receivables as and when the same shall become due, and otherwise act with
respect to the Receivables, the Dealer Agreements, the Dealer Assignments, the
Insurance Policies and the other Trust Property in such manner as will, in the
reasonable judgment of the Servicer, maximize the amount to be received by the
Trust with respect thereto, in accordance with the standard of care required by
Section 3.1. The Servicer shall be entitled to amend or modify any Receivable
in accordance with its customary procedures if the Servicer believes in good
faith that such amendment or modification is in the best interests of the Trust;
provided, however, that the Servicer may not (i) extend a Receivable beyond the
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last day of the Collection Period immediately preceding the Final Scheduled
Distribution Date for the Class B Notes; or (ii) amend or modify the Principal
Balance or Contract Rate of any Receivable, except as required by court order or
applicable law.
(b) The Servicer may grant to an Obligor one or more payment
deferrals (each, a "Credit Deferral") if (i) the Servicer determines that,
---------------
absent such deferral, a payment default by the Obligor is reasonably
foreseeable; (ii) the Servicer would grant such Credit Deferral if the
Receivable were serviced by it for its own account and in accordance with its
customary standards;
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(iii) the cumulative extensions with respect to any Receivable shall not cause
the term of such Receivable to extend beyond the last day of the Collection
Period immediately preceding the Final Scheduled Distribution Date for the Class
B Notes; (iv) such extensions in the aggregate do not exceed two months during
any twelve-month period; and (v) interest continues to accrue on the outstanding
Receivable Balance of the Receivable during the term of such Credit Deferral.
The Servicer may charge a fee in connection with the grant of Credit Deferrals
in accordance with its customary practices and procedures, which fee shall be
added to the Receivable Balance of the related Receivable. In the event that the
Servicer fails to comply with the provisions of the first sentence of this
Section 3.2(b), the Servicer shall be required to purchase the Receivable or
Receivables affected thereby in accordance with Section 3.7 hereof.
(c) On or after the Closing Date, the Servicer shall notify each
Obligor meeting the requirements set forth below, in writing, at least three
weeks prior to the first month with respect to which such Obligor would be
entitled to an optional extension pursuant to this Section 3.2(c), that such
qualifying Obligor, at such Obligor's option during the remaining term of the
Receivable, shall be entitled to a non-credit related extension of any regularly
scheduled payment due under a Receivable (each, an "Optional Payment Deferral")
-------------------------
if such qualifying Obligor satisfies the following conditions:
(i) at the time of such extension, such Receivable shall
not have been the subject of two such Optional Payment Deferrals in the
related fiscal year of the Trust;
(ii) such Receivable shall (x) not have been the subject of
any Credit Deferral within 90 days of the related Optional Payment
Deferral, or (y) not have been the subject of more than two Credit
Deferrals since its date of origination;
(iii) at the time of such Optional Payment Deferral, the
Receivable shall not have been more than 30 days past due three times or
more;
(iv) at the time of such Optional Payment Deferral, the
Receivable shall not be more than 15 days or more delinquent;
(v) at the time of such Optional Payment Deferral, (i) at
least 6 months of the Receivable's original term shall have elapsed, or
(ii) at least [20%] of the Receivable's original term shall have elapsed,
whichever is less; and
(vi) in the reasonable judgment of the Servicer, the
Receivable is not likely to become a Liquidating Receivable following such
Optional Payment Deferral.
The Servicer may charge a fee in connection with the grant of Optional
Payment Deferrals in accordance with its customary practices and procedures,
which fee shall be added to the Receivable Balance of the related Receivable.
If, as an inadvertent result of any extension granted pursuant to this Section
3.2(c), such extension breached any of the terms of the preceding criteria (i)
through (vi) or caused the term of such Receivable to extend beyond the last day
of the Collection
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Period immediately preceding the Final Scheduled Distribution Date for the Class
B Notes, then the Servicer shall be obligated to purchase such Receivable
typically pursuant to Section 3.7.
Section 3.3 Realization upon Receivables. (a) On behalf of the
----------------------------
Trust, the Servicer shall charge off a Receivable as a Liquidating Receivable in
accordance with its customary servicing procedures, generally no later than the
120th day of delinquency and, in no event, later than the 149th day of
delinquency, and shall use its best efforts to repossess and liquidate the
Financed Vehicle securing any Liquidating Receivable as soon as feasible after
default, in accordance with the standard of care required by Section 3.1,
typically after the Receivable is 90 days delinquent and, in no event, after the
Receivable is 100 days delinquent. In taking such action, the Servicer shall
follow such customary and usual practices and procedures as it shall deem
necessary or advisable in its servicing of motor vehicle retail installment sale
contracts, and as are otherwise consistent with the standard of care required
under Section 3.1, which shall include the exercise of any rights of recourse to
Dealers under the Dealer Agreements and Dealer Assignments (or rights to compel
repurchase against third Persons) and selling the Financed Vehicle at public or
private sale. The foregoing shall be subject to the provision that, in any case
in which a Financed Vehicle shall have suffered damage, the Servicer shall not
be obligated to expend funds in connection with the repair or the repossession
of such Financed Vehicle unless it shall determine in its discretion that such
repair and/or repossession will increase the Liquidation Proceeds of the related
Receivable by an amount equal to or greater than the amount of such expenses
(which, in any event, shall not be unreasonable).
(b) In the event that the Servicer determines that, after it has
exhausted all customary and usual collection practices and procedures, including
efforts to repossess and liquidate a Financed Vehicle or recover a deficiency
balance related to a Liquidating Receivable, further collection efforts by it as
to such Receivable will not result in the realization of additional proceeds to
the Trust, and the Servicer believes in good faith that a sale is in the best
interests of the Trust, the Servicer may, on behalf of the Trust, sell the
Receivable to any Person not affiliated with the Servicer free and clear of the
rights of the Trust. All proceeds of the sale of such Receivables hereunder
shall be deposited directly in or credited to the Collection Account.
(c) If the Servicer elects to commence a legal proceeding to enforce
a Dealer Agreement or Dealer Assignment, the act of commencement shall be deemed
to be an automatic assignment from the Trust to the Servicer of the rights of
recourse under such Dealer Agreement and Dealer Assignment. If, however, in any
enforcement suit or legal proceeding, it is held that the Servicer may not
enforce a Dealer Agreement or Dealer Assignment on the grounds that it is not a
real party in interest or a Person entitled to enforce the Dealer Agreement or
Dealer Assignment, the Trust, at the Servicer's expense, or the Seller, at the
Seller's expense, shall take such steps as the Servicer deems necessary to
enforce the Dealer Agreement or Dealer Assignment, including bringing suit in
its name or the names of the Securityholders.
Section 3.4 Physical Damage Insurance. (a) The Servicer shall
-------------------------
require that each Financed Vehicle be insured under an Insurance Policy naming
the Seller as loss payee. In the event that an Insurance Policy shall lapse or
shall be otherwise terminated, the Servicer, at its expense (and not at the
expense of the Trust), may procure a substitute policy of insurance, issued by
an insurer
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selected by the Servicer, consistent with the standard of care required by
Section 3.1, and naming the Servicer or the Seller as loss payee. Any substitute
Insurance Policy procured hereunder shall provide coverage against physical
damage to the Financed Vehicle and such other risks as determined by the
Servicer and shall contain such other provisions (including deductibles and loss
payable clauses) as determined by the Servicer, in each case, consistent with
the standard of care required by Section 3.1. The cost of such Insurance Policy
may, to the extent consistent with applicable law and the terms of the
applicable Receivable, be added to the amount owing by an Obligor, but shall be
treated as a separate receivable not owned by the Trust for all purposes
hereunder and, in furtherance of the foregoing, shall not be included in the
definition of Receivable Balance or Aggregate Receivables Balance and
collections with respect thereto shall not be part of Available Interest or
Available Principal. In the event that any payment by an Obligor is insufficient
to pay the payment currently due on the Receivable and the amount due on the
receivable arising from the cost of such Insurance Policy, the payment shall be
divided pro rata based on the amount currently due on each.
--- ----
(b) The Servicer may sue to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent for the Trust. If the
Servicer elects to commence a legal proceeding to enforce an Insurance Policy,
the act of commencement shall be deemed to be an automatic assignment of the
rights of the Trust under such Insurance Policy to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce an Insurance Policy on the grounds that
it is not a real party in interest or a holder entitled to enforce the Insurance
Policy, the Trust, at the Servicer's expense, or the Seller, at Servicer's
expense, shall take such steps as the Servicer deems necessary to enforce such
Insurance Policy, including bringing suit in its name or the names of the
Securityholders .
Section 3.5 Maintenance of Security Interests in Financed Vehicles.
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The Servicer, in accordance with the standard of care required under Section
3.1, shall take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle for
the benefit of the Trust. The Trust hereby authorizes the Servicer, and the
Servicer hereby agrees, to take such steps as are necessary to re-perfect such
security interest on behalf of the Trust in the event the Servicer receives
notice of the relocation of a Financed Vehicle. If there has been an Event of
Servicing Termination (or the occurrence of an event specified in clause (iii)
or (iv) of Section 7.1(a) with respect to the Seller), upon the request of the
Trust, the Servicer, at its expense, shall promptly and duly execute and deliver
such documents and instruments, and take such other actions as may be necessary,
as evidenced by an Opinion of Counsel delivered to the Trust, to perfect the
Trust's interest in the Trust Property against all other Persons, including the
delivery of the Receivables and the Receivable Files to the Trustee, its agent,
or its designee, the endorsement and delivery of the Insurance Policies or the
notification of the insurers thereunder, the execution of transfer instruments,
and the endorsement to the Trustee and the delivery of the certificates of title
to the Financed Vehicles to the appropriate department or departments of motor
vehicles (or other appropriate governmental agency).
Section 3.6 Covenants of the Servicer. The Servicer makes the
-------------------------
following covenants upon which the Trust relies in accepting the Trust Property
in trust and in executing and delivering the Securities:
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(i) Security Interest to Remain in Force. The
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Financed Vehicle securing each Receivable will not be released from the
security interest granted by the Receivable in whole or in part, except in
the event of payment in full by the Obligor thereunder or disposition of a
repossessed Financed Vehicle or except as may be required by an insurer in
order to receive proceeds from insurance covering such Financed Vehicle or
as otherwise contemplated herein.
(ii) No Impairment. The Servicer will not (nor
-------------
will it permit any subservicer to) impair in any material respect the
rights of any Interested Party in the Receivables, the Dealer Agreements,
the Dealer Assignments or the Insurance Policies or, subject to clause
(iii) below, otherwise amend or alter the terms thereof if, as a result of
such amendment or alteration, the interests of the Trust or any Interested
Party hereunder would be materially adversely affected.
(iii) Amendments. The Servicer will not amend or
----------
otherwise modify any Receivable (including, the grant of any extension
thereunder), except in accordance with Section 3.2.
Section 3.7 Purchases by the Servicer. The Seller, the Servicer,
-------------------------
the Indenture Trustee or the Owner Trustee, as the case may be, shall inform the
other parties promptly, in writing, upon the discovery (which, in the case of
either Trustee, shall occur only upon the actual knowledge of an Authorized
Officer of such Trustee) of any breach by the Servicer of its covenants under
Section 3.6. Unless the breach shall have been cured by the last day of the
Collection Period which includes the 30th day after the date on which the
Servicer becomes aware of, or receives written notice of, such breach, the
Servicer shall purchase from the Trust the Receivable or Receivables, without
recourse, representation or warranty, other than that the Owner Trustee, on
behalf of the Trust materially and adversely affected thereby on the last day of
such Collection Period has not imposed any liens on the Receivable or
Receivables to be repurchased from the Trust; provided, however, that in the
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case of a breach of the covenant contained in Section 3.6(iii), the Servicer
shall be obligated to purchase the affected Receivable or Receivables on the
last day of the Collection Period during which the Servicer becomes aware of, or
receives written notice of, such breach (which in all cases shall be deemed to
have a material adverse effect on the Securityholders). If the Servicer amends
or modifies a Receivable pursuant to Section 3.2(a), grants an Optional Payment
Deferral pursuant to Section 3.2(c) or a Credit Deferral pursuant to Section
3.2(b) and such amendment, modification or deferral causes the term of the
applicable Receivable to extend beyond the last day of the Collection Period
immediately preceding the Final Scheduled Distribution Date for the Class B
Notes, the Servicer shall be obligated to purchase the applicable Receivable on
the last day of the Collection Period during which the Servicer amends or
modifies such Receivable or grants such Optional Payment Deferral or Credit
Deferral. In consideration of the purchase of a Receivable hereunder, the
Servicer shall remit the Repurchase Amount of such Receivable in the manner
specified in Section 4.3 on the related Deposit Date. Except as provided in
Section 6.2, the sole remedy of the Trust, any Trustee, or the Securityholders
against the Servicer with respect to a breach pursuant to Section 3.6 shall be
to require the Servicer to purchase Receivables pursuant to this Section 3.7.
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Section 3.8 Servicing Compensation. On each Distribution Date, the
----------------------
Servicer shall be paid the Total Servicing Fee for such Distribution Date. In
addition, the Servicer shall retain any late fees, prepayment charges or other
fees and charges (other than Deferral Fees) collected during the Collection
Period (collectively, the "Supplemental Servicing Fee"). The Servicer shall be
--------------------------
required to pay all expenses incurred by it in connection with its activities
hereunder (including fees and expenses of either Trustee (and any custodian
appointed by such Trustee) and independent accountants, any subservicer, taxes
imposed on the Servicer or any subservicer, and expenses incurred in connection
with distributions and reports to the Trustees, the Rating Agencies and the
Securityholders) except expenses incurred in connection with realizing upon
Receivables under Section 3.3. No transfer, sale, pledge or other disposition
of the Servicer's right to receive all or any portion of the Total Servicing Fee
shall be made, and any such attempted transfer, sale, pledge or other
disposition shall be void, unless such transfer is made to one or more successor
servicers in connection with the assumption by any such successor servicer of
the duties hereunder pursuant to Section 7.2 and all (and not a portion) of the
Total Servicing Fee is transferred to any such successor servicer.
Section 3.9 Servicer's Certificate. On or before the Determination
----------------------
Date immediately preceding each Distribution Date, the Servicer shall deliver to
each Trustee a report of a Servicing Officer substantially in the form of
Exhibit A hereto, as certified by such officer (each, a "Servicer's
--------- ----------
Certificate") containing all information necessary to make the distributions
-----------
pursuant to Section 4.5 and all information required to be provided to
Certificateholders and Noteholders pursuant to Section 4.7. The Servicer also
shall separately identify (by account number of the Receivable as it appears in
the related Schedule of Receivables) in a written notice to the Trustees the
Receivables to be repurchased by the Seller or to be purchased by the Servicer,
as the case may be, on the related Deposit Date, and each Receivable which
became a Liquidating Receivable during the related Collection Period.
Section 3.10 Annual Statement as to Compliance. (a) The Servicer
---------------------------------
shall deliver to the Trust, the Owner Trustee and the Indenture Trustee, on or
before March 15 of each year, commencing March 15, 20__, an Officer's
Certificate, stating that (i) a review of the activities of the Servicer during
the preceding calendar year (or shorter period, in the case of the first such
Officer's Certificate) and of its performance of its obligations under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year (or shorter period, in
the case of the first such certificate), 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 Trust, the Owner Trustee and
the Indenture Trustee, promptly upon having knowledge thereof, but in no event
later than five Business Days thereafter, written notice in an Officer's
Certificate of any event which constitutes or, with the giving of notice or
lapse of time, or both, would become, an Event of Servicing Termination under
Section 7.1.
Section 3.11 Independent Certified Public Accountants' Reports. The
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Servicer shall cause a firm of independent certified public accountants (who may
also render audit and other
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services to the Servicer and the Seller) to deliver to the Trust, the Owner
Trustee and the Indenture Trustee on or before March 15 of each year, commencing
March 15, 20__, a report of examination addressed to the Board of Directors of
the Servicer and to the Trust, the Owner Trustee and the Indenture Trustee to
the effect that such firm has examined the automobile and light-duty truck
receivable servicing functions of the Servicer over the previous calendar year
(or shorter period, in the case of the first such report) and that such
examination (i) included tests relating to automobile and light-duty truck loans
serviced for others and such other auditing procedures as such firm considered
necessary under the circumstances and (ii) except as described in such report,
disclosed no exceptions or errors in the records relating to automobile and
light-duty truck loans serviced for others that in such firm's opinion, requires
such firm to report. In the event such firm requires the Trust, the Owner
Trustee and the Indenture Trustee to agree to the procedures performed by such
firm, the Servicer shall direct the Trust, the Owner Trustee and the Indenture
Trustee in writing to so agree; it being understood and agreed that the Trust,
the Owner Trustee and the Indenture Trustee will deliver such letter of
agreement in conclusive reliance upon the written direction of the Servicer, and
the Trust, the Owner Trustee and the Indenture Trustee make no independent
inquiry or investigation as to, and shall have no obligation or liability in
respect of, the sufficiency, validity or correctness of such procedures.
Section 3.12 Access to Certain Documentation and Information
-----------------------------------------------
Regarding Receivables. The Servicer shall provide the Trustees and the
---------------------
Securityholders with access to the Receivable Files (in the case of the
Securityholders, where the Securityholder shall be required by applicable
statutes or regulations to have access to such documentation). Such access shall
be afforded without charge, but only upon reasonable request and during normal
business hours at the office of the Servicer. 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. The Servicer shall deliver a copy of
all reports or notices furnished and delivered pursuant to Sections 3.9, 3.10
and 3.11 to a Securityholder upon written request of such Securityholder. Any
Securityholder, by its acceptance of a Security, shall be deemed to have agreed
to keep any information obtained by it pursuant to this Section confidential,
except as may be required by applicable law.
Section 3.13 Reports to the Commission. The Servicer shall, on
-------------------------
behalf of the Trust, cause to be filed with the Commission any periodic reports
required to be filed under the provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder.
Section 3.14 Reports to the Rating Agencies. The Servicer shall
------------------------------
deliver simultaneously to each Rating Agency, at such address as each Rating
Agency may request, a copy of all reports or notices furnished or delivered
pursuant to this Article and a copy of any amendments, supplements or
modifications to this Agreement and, if any subservicer is not an Affiliate of
the Seller, any subservicing agreement and any other information reasonably
requested by such Rating Agency to monitor this transaction.
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ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO SECURITYHOLDERS
Section 4.1 Establishment of Accounts.
-------------------------
(a) (i) The Indenture Trustee, for the benefit of the
Securityholders, shall establish and maintain in the name of the Indenture
Trustee one or more Eligible Deposit Accounts (the "Collection Account"),
------------------
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Securityholders.
(ii) The Indenture Trustee for the benefit of the
Noteholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Note Distribution Account"),
-------------------------
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Noteholders.
(iii) In the event the Bank is not the only
Certificateholder, the Owner Trustee, for the benefit of the
Certificateholders, shall establish and maintain in the name of the Trust
an Eligible Deposit Account (the "Certificate Distribution Account"),
--------------------------------
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Certificateholders.
(b) (i) Funds on deposit in the Accounts shall be
invested by the Indenture Trustee in Eligible Investments selected by the
Servicer (as provided in a writing signed by it); provided, however, it is
-------- -------
understood and agreed that Indenture Trustee shall not be liable for any
loss arising from such investment in Eligible Investments or incurred as a
result of the liquidation of any investment prior to its stated maturity or
the failure of the Servicer to provide timely written investment direction.
In no event shall the Indenture Trustee be liable for the selection of
Eligible Investments. The Indenture Trustee and the Owner Trustee shall
have no obligation to invest or reinvest any amounts held hereunder in the
absence of written investment direction. All such Eligible Investments
shall be held by the Indenture Trustee for the benefit of the beneficiaries
of the applicable Account; provided that, on each Distribution Date, all
--------
interest and other investment income (net of losses and investment
expenses) on funds on deposit therein shall be withdrawn from the Accounts
at the direction of the Servicer and shall be paid to the Seller. Funds on
deposit in the Accounts shall be invested in Eligible Investments that will
mature so that such funds will be available at the close of business (New
York time) on the Deposit Date preceding the following Distribution Date.
Funds deposited in an Account on a Deposit Date which immediately precedes
a Distribution Date upon the maturity of any Eligible Investments are not
required to be (but may be) invested overnight.
(ii) The Accounts shall initially be established
with the Indenture Trustee. The Indenture Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the
Accounts and in all proceeds thereof (other than income
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thereon which shall be paid to the Seller) and all such funds, investments
and proceeds shall be part of the Trust Property. The Accounts shall be
under the sole dominion and control of the Indenture Trustee for the
benefit of all Securityholders. If, at any time, any of the Accounts ceases
to be an Eligible Deposit Account, the Indenture Trustee (or the Servicer
on its behalf) shall within 10 Business Days (or such longer period, not to
exceed 30 calendar days, as to which each Rating Agency shall consent)
establish a new Account as an Eligible Deposit Account and shall transfer
any cash and/or any investments that are in the existing Account which is
no longer an Eligible Deposit Account to such new Account.
(iii) With respect to the Account Property in
respect of any Account:
(A) any Account Property that is held in
deposit accounts shall be held solely in an Eligible Deposit Account;
and each such Eligible Deposit Account shall be subject to the
exclusive custody and control of the Indenture Trustee, and the
Indenture Trustee shall have sole signature authority with respect
thereto;
(B) the Indenture Trustee shall maintain Control
over each Account in which any Account Property that constitutes a
Security Entitlement, an Uncertificated Security or a Federal Book-
Entry Security is held; and
(C) any Account Property that constitutes either
a Security Certificate or any other Account Property that constitutes
Physical Property and that is not a Security Entitlement shall be
transferred to the Indenture Trustee or its nominee or custodian by
physical delivery to the Indenture Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Trustee or its nominee
or custodian or endorsed in blank.
(iv) The Servicer shall have the power, revocable
by the Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Accounts for the purpose of permitting
the Servicer or the Owner Trustee to carry out its respective duties
hereunder or permitting the Indenture Trustee to carry out its duties under
the Indenture.
(c) (i) The Indenture Trustee, for the benefit of the
Securityholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Reserve Account") to include
---------------
money and other property deposited and held therein pursuant to this
Section 4.1(c)(i), Section 4.5(b)(v) and Section 4.6. On the Closing Date,
the Seller shall deposit the Reserve Account Initial Deposit with respect
to the Closing Date into the Reserve Account. The Reserve Account shall be
the property of the Trust subject to the rights of the Indenture Trustee in
the Reserve Account Property.
(ii) Funds on deposit in the Reserve Account
shall be invested by the Indenture Trustee in Eligible Investments selected
by the Servicer (as provided in writing signed by it); provided, however,
-------- -------
it is understood and agreed that the Indenture Trustee shall
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not be liable for any loss arising from such investment in Eligible
Investments or incurred as a result of the liquidation of any investment
prior to its stated maturity or the failure of the Servicer to provide
timely, written investment direction. In no event shall the Indenture
Trustee be liable for the selection of Eligible Investments. The Indenture
Trustee shall have no obligation to invest or reinvest any amounts held
hereunder in the absence of written investment direction. All such Eligible
Investments shall be held by the Indenture Trustee for the benefit of the
Securityholders; provided that on each Distribution Date all interest and
--------
other investment income (net of losses and investment expenses) on funds on
deposit therein shall be withdrawn from the Reserve Account at the
direction of the Servicer and shall be paid to the Seller. Funds on deposit
in the Reserve Account shall be invested in Eligible Investments that will
mature so that such funds will be available at the opening of business on
the next following Deposit Date; provided, however, that to the extent
-------- -------
permitted by the Rating Agencies, funds on deposit in the Reserve Account
may be invested in Eligible Investments that mature later than the next
Deposit Date.
(iii) The Reserve Account shall initially be
established with the Indenture Trustee and shall be under the sole dominion
and control of the Indenture Trustee. If, at any time, the Reserve Account
ceases to be an Eligible Deposit Account, the Servicer shall within 10
Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency may consent) establish a new Reserve Account as an
Eligible Deposit Account and shall instruct the Indenture Trustee to
transfer any cash and/or any investments that are in the existing Account
which is no longer an Eligible Deposit Account to such new Reserve Account.
(iv) With respect to the Account Property in
respect of the Reserve Account:
(A) any Account Property that is held in deposit
accounts shall be held solely in an Eligible Deposit Account; and each
such Eligible Deposit Account shall be subject to the exclusive
custody and control of the Indenture Trustee and the Indenture Trustee
shall have sole signature authority with respect thereto;
(B) the Indenture Trustee shall maintain Control
over each Account in which any Account Property that constitutes a
Security Entitlement, an Uncertificated Security or a Federal Book-
Entry Security is held; and
(C) any Account Property that constitutes either
a Security Certificate or any other Account Property that constitutes
Physical Property and that is not a Security Entitlement shall be
transferred to the Indenture Trustee or its nominee or custodian by
physical delivery to the Indenture Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Indenture Trustee or
its nominee or custodian or endorsed in blank.
Section 4.2 Collections. (a) Subject to the provisions of
-----------
subsections (b) and (c) below, the Servicer shall remit to the Collection
Account all payments by or on behalf of the
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Obligors on the Receivables, including all Liquidation Proceeds and Recoveries
received by the Servicer during any Collection Period, as soon as practicable,
but in no event after the close of business (New York time) on the second
Business Day after receipt thereof. Subject to the provisions of subsection (c)
hereof, on the Closing Date, the Servicer shall deposit in the Collection
Account all payments by or on behalf of the Obligors received by the Servicer
representing monies due or received under the Receivables after the close of
business of the Servicer on the Cutoff Date and on or prior to the second
Business Day immediately preceding the Closing Date.
(b) Notwithstanding the provisions of Section 4.2(a), if (i) the
Servicer shall have the Required Rating or (ii) (a) the Servicer shall have
obtained a letter of credit or surety bond (or similar form of performance
guaranty) from an entity with the Required Rating or otherwise acceptable to the
Rating Agencies in favor of the Trust for the benefit of the Securityholders,
providing that the Trust may demand payment (up to the amount then available
thereunder) in the event that the Servicer fails to make any payment or deposit
required hereunder (other than with respect to Advances) and (b) the Trust shall
have received written notice from each of the Rating Agencies (provided that
Moody's shall not be obligated to give any such notice) that the then
outstanding rating on the Notes would not be lowered or withdrawn as a result,
the Servicer may deposit the amounts referred to in subsection (a) above for any
Collection Period into the Collection Account not later than the close of
business on the related Deposit Date, for so long as the Servicer shall have the
Required Rating or such letter of credit, surety bond or similar form of
performance guaranty is in full force and effect, as the case may be; provided,
--------
however, that (i) if an Event of Servicing Termination has occurred and is
-------
continuing, (ii) the Servicer has been terminated as such pursuant to Section
7.1 or (iii) the Servicer ceases to have the Required Rating (and the Servicer
has not obtained a letter of credit (or similar form of performance guaranty)
satisfying the conditions specified above), the Servicer shall deposit such
amounts (including any amounts then being held by the Servicer) into the
Collection Account as provided in Section 4.2(a). Notwithstanding the
foregoing, the provisions of the proviso to the preceding sentence shall not be
applicable to a successor servicer solely by reason of the occurrence of an
event specified in clauses (i), (ii) and (iii) of such proviso with respect to
the outgoing Servicer. Prior to the occurrence of an event specified in clauses
(i), (ii) or (iii) in the preceding proviso, on a monthly basis, all Collections
shall be segregated by book-entry or similar form of identification on the
Servicer's books and records and identified as the property of the Trust. The
Servicer shall promptly notify the Trust and the Indenture Trustee in writing if
it shall obtain or lose the Required Rating or the benefit of such letter of
credit, surety bond, or similar form of performance guaranty.
(c) Notwithstanding the provisions of subsections (a) and (b) hereof,
the Servicer may retain, or will be entitled to be reimbursed, from amounts
otherwise payable into, or on deposit in, the Collection Account with respect to
a Collection Period and the Receivables originated by it any amounts previously
deposited in the Collection Account but later determined to have resulted from
mistaken deposits or postings or checks returned for insufficient funds, in each
case, with respect to which the Servicer has not been previously reimbursed
hereunder. The amount to be retained or reimbursed hereunder shall not be
included in Collections with respect to the related Distribution Date.
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(d) In those cases where a subservicer is servicing a Receivable, the
Servicer shall cause the subservicer to remit to the Collection Account as soon
as practicable, but in no event later than the close of business (New York time)
on the second Business Day after receipt thereof by the subservicer (but subject
to the provisions of Section 4.2 (b) and the limitations contained in Section
4.2(c) of this Agreement) the amounts referred to in Section 4.2(a) in respect
of a Receivable being serviced by the subservicer.
Section 4.3 Advances. (a) On each Deposit Date, the Servicer may
--------
make a payment with respect to each Receivable serviced by it (other than a
Liquidating Receivable) equal to the excess, if any, of (i) the product of the
Receivable Balance of such Receivable as of the first day of the related
Collection Period and one twelfth of its Contract Rate (calculated on the basis
of a 360-day year comprised of twelve 30-day months) over (ii) Interest
Collections actually received by the Servicer as of the last day of such
Collection Period with respect to such Receivable (each such payment, an
"Advance"). With respect to each Receivable, the Advance shall increase
-------
Outstanding Advances. If such calculation results in a negative number, (i)
Outstanding Advances shall be reduced by such amount or (ii) if Outstanding
Advances is equal to zero, such amount shall be paid to the Servicer. The
Servicer may elect not to make any Advance of due and unpaid interest with
respect to a Receivable to the extent that the Servicer, in its sole discretion,
determines that such Advance is not recoverable from subsequent payments on such
Receivable or from funds in the Reserve Account. The Servicer shall not make
any advance with respect to principal of Receivables.
(b) The Servicer shall remit to Indenture Trustee for deposit to the
Collection Account the aggregate Advances on Receivables serviced by the
Servicer pursuant to Section 4.3(a). To the extent that the Servicer does not
make an Advance pursuant to Section 4.3(a) on the date required, the Servicer
shall so notify the Indenture Trustee in writing, and the Indenture Trustee
shall withdraw such amount (or, if determinable, such portion of such amount as
does not represent advances for delinquent interest) from the Reserve Account
and deposit such amount in the Collection Account. The Servicer and the Seller
shall deposit or cause to be deposited in the Collection Account the aggregate
Repurchase Amount with respect to Purchased Receivables. All such deposits
shall be made in immediately available funds on the Deposit Date.
(c) On each Deposit Date, prior to making any of the distributions
set forth in Section 4.5, the Servicer shall be reimbursed for all Outstanding
Advances with respect to prior Distribution Dates and, to the extent such funds
are insufficient, to the extent of the funds in the Reserve Account. If it is
acceptable to each Rating Agency without reduction in the rating of the Notes,
the Outstanding Advances at the option of the Servicer may be paid at or as soon
as possible after the beginning of the related Collection Period out of the
first collections of interest received on the Receivables for such Collection
Period.
Section 4.4 Additional Deposits; Net Deposits. The Servicer may
---------------------------------
make the remittances to be made by it pursuant to Section 4.2 net of amounts to
be distributed to it pursuant to Section 4.5 (but subject to the priorities set
forth therein), for so long as (i) no Event of Servicing Termination has
occurred and is continuing and (ii) the Servicer has not been terminated as such
pursuant to Section 7.1 hereof; provided, however, that the Servicer shall
-------- -------
account for all of such amounts in the related Servicer's Certificate as if such
amounts were deposited and distributed
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separately; and provided further that, if an error is made by the Servicer in
-------- -------
calculating the amount to be deposited or retained by it and a shortfall in the
amount deposited into the Collection Account results, the Servicer shall make a
payment of the deficiency to the Collection Account, immediately upon becoming
aware, or receiving notice from the Trust, of such shortfall.
Section 4.5 Distributions. (a) On or before each Determination
-------------
Date, the Servicer shall calculate, with respect to the preceding Collection
Period and the related Distribution Date, the Available Amount, the Total
Available Amount, Collected Interest, the Total Servicing Fee, the Aggregate
Class A Noteholders' Interest Distributable Amount, the Class B Noteholders'
Interest Distributable Amount, the Class A Noteholders' Principal Distributable
Amount, the Class B Noteholders' Principal Distributable Amount, the
Noteholders' Principal Distributable Amount, the Principal Payment Amount and
all other amounts required to be deposited in or paid from each of the
Collection Account, the Note Distribution Account, the Certificate Distribution
Account and the Reserve Account on the next succeeding Distribution Date, which
calculations shall be set forth in the Servicer's Certificate delivered to the
Trustees on or before such Determination Date.
(b) On or before the Deposit Date based solely on the information
contained in the Servicer's Certificate, the Indenture Trustee shall cause to be
made the following withdrawals, deposits, transfers and distributions in the
amounts set forth in the Servicer's Certificate for such Distribution Date
pursuant to Section 3.9:
(i) from the Reserve Account to the Collection
Account, the lesser of (A) the amount of cash or other immediately
available funds on deposit in the Reserve Account on the Deposit Date and
(B) the amount, if any, by which (x) the sum of the Total Servicing Fee,
the Aggregate Class A Noteholders' Interest Distributable Amount, the Class
B Noteholders' Interest Distributable Amount and the Noteholders' Principal
Distributable Amount exceeds (y) the Available Amount for such Distribution
Date;
(ii) the amount to be withdrawn from the
Collection Account and paid to the Servicer in respect of reimbursement of
Outstanding Advances pursuant to Section 4.3(c);
(iii) the amount to be withdrawn from the
Collection Account and paid to the Servicer in respect of the Total
Servicing Fee for such Distribution Date;
(iv) the amount to be withdrawn from the
Collection Account in respect of the Aggregate Class A Noteholders'
Interest Distributable Amount, the Class B Noteholders' Interest
Distributable Amount and the Noteholders' Principal Distributable Amount
and deposited in the Note Distribution Account for payment to Noteholders
on such Distribution Date;
(v) the amount, if any, by which the Available
Amount for such Distribution Date exceeds the sum of the Total Servicing
Fee, the Aggregate Class A Noteholders' Distributable Amount, the Class B
Noteholders' Interest Distributable Amount
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and the Noteholders' Principal Distributable Amount will be withdrawn from
the Collection Account and deposited in the Reserve Account; and
(vi) the amount, if any, by which the amount on
deposit in the Reserve Account after all other deposits (including the
deposit pursuant to clause (v) above) and withdrawals on the Deposit Date
exceeds the Specified Reserve Account Balance for such Distribution Date
will be withdrawn from the Reserve Account and paid to the
Certificateholders.
(c) After making the reimbursement to the Servicer in respect of
Outstanding Advances to the extent provided in Section 4.3(c), on each
Determination Date, the Indenture Trustee at the written direction of the
Servicer, will allocate the Total Available Amount in the following order of
priority, to the extent available:
(i) the Total Servicing Fee;
(ii) the Aggregate Class A Noteholders' Interest
Distributable Amount;
(iii) the Class B Noteholders' Interest Distributable
Amount; and
(iv) the Noteholders' Principal Distributable
Amount.
(d) All amounts allocated pursuant to clauses (ii), (iii) and (iv)
above shall be deposited in the Note Distribution Account for distribution
pursuant to Section 8.2 of the Indenture, including the subordination provisions
contained therein.
Section 4.6 Reserve Account.
---------------
(a) On the Closing Date, the Seller shall deposit the Reserve Account
Initial Deposit into the Reserve Account.
(b) On each Deposit Date, an amount equal to the Available Amount
remaining with respect to such Distribution Date after the payment of the Total
Servicing Fee and the deposit of the Aggregate Class A Noteholders' Interest
Distributable Amount, the Class B Noteholders' Interest Distributable Amount and
the Noteholders' Principal Distributable Amount in the Note Distribution Account
shall be deposited in the Reserve Account.
(c) The amount to be withdrawn from the Reserve Account and paid to
the Certificateholders in accordance with Section 5.2(a) of the Trust Agreement
will equal the amount, if any, by which the amount on deposit in the Reserve
Account after all other deposits (including the deposit pursuant to clause (b)
above) exceeds the Specified Reserve Account Balance for such Distribution Date.
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Section 4.7 Statements to Securityholders. (a) On each
-----------------------------
Distribution Date, the Owner Trustee, or the Paying Agent, shall include with
each distribution to a Certificateholder, and the Indenture Trustee shall mail
to each Noteholder a statement prepared by the Servicer (which statement shall
also be provided to the Rating Agencies), based on information in the Servicer's
Certificate furnished pursuant to Section 3.9. Each such statement shall set
forth the following information as to the Securities with respect to such
Distribution Date or the preceding Collection Period, as applicable:
(i) the amount of the distribution allocable to
principal with respect to each class of Notes and any distributions on the
Certificates and the derivation of such amounts;
(ii) the amount of the distribution allocable to
interest on or with respect to each class of Notes and the Certificates;
(iii) amount of the Total Servicing Fee paid or
payable to the Servicer in respect of the related Collection Period;
(iv) the aggregate Outstanding Advances (if any) as
of the last day of the preceding Collection Period and the change in such
amount from the previous Collection Period;
(v) the Aggregate Receivables Balance as of the
close of business on the last day of the preceding Collection Period;
(vi) the aggregate outstanding principal balance and
the Note Pool Factor for each class of such Notes, in each case after
giving effect to all payments reported under clause (i) above on such date;
(vii) the amount of the aggregate Realized Losses, if
any, for the preceding Collection Period;
(viii) the Noteholders' Interest Carryover Shortfall,
the Class A Noteholders' Interest Carryover Shortfall, the Class B
Noteholders' Principal Carryover Shortfall, the Certificateholders'
Interest Carryover Shortfall and the Certificateholders' Principal
Carryover Shortfall, if any, in each case as applicable to each class of
Securities and the change in such amounts from the preceding statement;
(ix) the aggregate Repurchase Amount with respect to
Purchased Receivables, if any, that were repurchased by the Seller or
purchased by the Servicer in such Collection Period;
(x) the balance of the Reserve Account, as of such
date, after giving effect to changes therein on such date, calculation of
the Average Delinquency Ratio, the Average Net Loss Ratio and the Specified
Reserve Account Balance on such date; and
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(xi) the Gross Loss Ratio.
(b) Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law, the Servicer shall
furnish a report to the Indenture Trustee and the Owner Trustee and the
Indenture Trustee or the Owner Trustee, as applicable, shall furnish, or cause
to be furnished, to each Person who at any time during such calendar year shall
have been a Securityholder, such statement as to the sum of the amounts
determined in clauses (i), (ii), (iii), (viii) and (x) above for such calendar
year, or, in the event such Person shall have been a Securityholder during a
portion of such calendar year, for the applicable portion of such year, and such
other information as is available to the Servicer as the Servicer deems
necessary or desirable to enable the Securityholders to prepare their federal
income tax returns.
ARTICLE V
THE SELLER
Section 5.1 Representations and Warranties of the Seller. The
--------------------------------------------
Seller makes the following representations and warranties, on which the Trust
relies in accepting the Receivables and the other Trust Property in trust and
issuing the Securities. These representations are made as of the Closing Date,
but shall survive the sale, transfer and assignment of the Receivables and the
other Trust Property to the Trust and the pledge to the Indenture Trustee
pursuant to the Indenture.
(i) Organization and Good Standing. The Seller has
------------------------------
been duly incorporated and is validly existing as a national banking
association, with the power and authority to own its properties and to
conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and has,
full power, authority and legal right to acquire, own and sell its
Receivables.
(ii) Due Qualification. The Seller is duly qualified
-----------------
to do business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions where the
failure to do so would materially and adversely affect the ownership or
servicing of the Receivables or render any of the Receivables
unenforceable.
(iii) Power and Authority. The Seller has the power,
-------------------
authority and legal right to execute and deliver the Transfer and Servicing
Agreements to which it is a party and to carry out the terms of such
agreements and to sell and assign the property to be sold and assigned to
and deposited with the Trust as Trust Property; and the execution,
delivery, and performance of the Transfer and Servicing Agreements to which
it is a party and all of the documents required pursuant hereto have been
duly authorized by the Seller by all necessary action.
(iv) No Consent Required. The Seller is not required
-------------------
to obtain the consent of any other Person, or any consent, license,
approval or authorization or registration
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or declaration with, any governmental authority, bureau or agency in
connection with the execution, delivery or performance of the Transfer and
Servicing Agreements to which it is a party, other than as may be required
under the blue sky or securities laws of any State or the Securities Act of
1933, as amended, under state laws governing the perfection of the
interests created under such Transfer and Servicing Agreements and under
ERISA.
(v) Valid Sale; Binding Obligation. This Agreement
------------------------------
effects a valid sale, transfer and assignment of the Receivables and the
other Trust Property conveyed by the Seller to the Trust hereunder,
enforceable against creditors of and purchasers from the Seller; and each
Transfer and Servicing Agreement to which it is a party constitutes a
legal, valid, and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity).
(vi) No Violation. The execution, delivery and
------------
performance by the Seller of the Transfer and Servicing Agreements to which
it is a party, the consummation of the transactions contemplated thereby
and the fulfillment of the terms thereof will not conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the certificate of
incorporation or bylaws of the Seller, or conflict with, or breach any of
the terms or provisions of, or constitute (with or without notice or lapse
of time) a default under, any indenture, agreement, mortgage, deed of trust
or other instrument to which the Seller is a party or by which the Seller
is bound or any of its properties are subject, or result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust or other instrument
(other than as contemplated by this Agreement), or violate any law, order,
rule, or regulation, applicable to the Seller or its properties, of any
federal or state regulatory body, any court, administrative agency, or
other governmental instrumentality having jurisdiction over the Seller or
any of its properties.
(vii) No Proceedings. There are no proceedings or
--------------
investigations pending, or, to the knowledge of the Seller, threatened,
before any court, regulatory body, administrative agency, or other tribunal
or governmental instrumentality having jurisdiction over the Seller or its
properties: (a) asserting the invalidity of the Transfer and Servicing
Agreements, the Administration Agreement or the Securities, (b) seeking to
prevent the issuance of the Securities or the consummation of any of the
transactions contemplated by the Transfer and Servicing Agreements, (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, the Transfer and Servicing Agreements, the
Administration Agreement or the Securities, or (d) that may adversely
affect the federal or state income, excise, franchise or similar tax
attributes of the Securities.
Section 5.2 Liability of the Seller; Indemnities. (a) The Seller
------------------------------------
shall indemnify, defend and hold harmless the Trustees, their directors,
officers, employees and agents, the Trust and
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the Securityholders from and against any taxes that may at any time be asserted
against the Trustees, their directors, officers, employees and agents, the Trust
or a Securityholder with respect to, and as of the date of, the sale, transfer
and assignment of the Trust Property to the Trust or the issuance and original
sale of the Securities, including any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or license
taxes (but not, except as provided below, including any taxes asserted with
respect to ownership of the Trust Property or federal or other income taxes,
including franchise taxes measured by net income, arising out of the
transactions contemplated by this Agreement or transfer taxes arising in
connection with the transfer of the Securities), and reasonable costs and
expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust and the
Securityholders from and against any loss, liability or expense incurred by
reason of (i) the Seller's willful misfeasance, bad faith, or negligence in the
performance of its duties hereunder, or by reason of reckless disregard of the
obligations and duties hereunder; or (ii) any action taken, or failed to be
taken, by the Seller in respect of any portion of the Trust Property.
(c) The Seller shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust and the
Securityholders from and against any loss, liability or expense incurred by
reason of the violation by the Seller of federal or state securities laws in
connection with the registration or the sale of the Securities.
(d) The Seller shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust and the
Securityholders from and against any loss, liability or expense imposed upon, or
incurred by, the Trustees, the Trust or the Securityholders as the result of the
failure of any Receivable conveyed by it to the Trust hereunder, or the sale of
the related Financed Vehicle, to comply with all requirements of applicable law.
(e) Indemnification under this Section 5.2 shall include reasonable
fees and expenses of counsel and expenses of litigation and shall survive
termination of the Trust or the earlier resignation or removal of the Owner
Trustee or the Indenture Trustee. If the Seller shall have made any indemnity
payments pursuant to this Section 5.2 and the recipient thereafter shall collect
any of such amounts from Persons other than the Seller, the recipient shall
immediately upon receipt thereof repay such amounts to the Seller, without
interest.
Section 5.3 Merger or Consolidation of the Seller. Any corporation
-------------------------------------
or other entity (i) into which the Seller may be merged or consolidated, (ii)
that may result from any merger, conversion, or consolidation to which the
Seller is a party, or (iii) that may succeed by purchase and assumption to all
or substantially all of the business of the Seller, where the Seller is not the
surviving entity, which corporation or other entity shall execute an agreement
of assumption to perform every obligation of the Seller under this Agreement,
shall be the successor to the Seller hereunder without the execution or filing
of any document or any further act by any of the parties to this Agreement. The
Seller shall promptly inform the Owner Trustee and the Indenture Trustee and the
Rating Agency of any such merger, conversion, consolidation or purchase and
assumption, where the Seller is not the surviving entity.
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Section 5.4 Limitation on Liability of the Seller and Others. The
------------------------------------------------
Seller, and any of its directors, officers, employees or agents may rely in good
faith on any document of any kind, believed by it to be genuine and properly
executed and submitted by any Person respecting any matters arising hereunder.
The Seller shall be under no obligation under this Agreement to appear in,
prosecute or defend any legal action that shall be unrelated to its obligations
under this Agreement and that in its opinion may involve it in any expense or
liability.
Section 5.5 Seller May Own Securities. The Seller, and any
-------------------------
Affiliate of the Seller, may in its individual or any other capacity become the
owner or pledgee of Securities with the same rights as it would have if it were
not the Seller or an Affiliate thereof, except as otherwise provided in the
definition of "Securityholder," "Noteholder" and "Certificateholder" in Section
1.1. Securities so owned by or pledged to the Seller or such controlling,
controlled or commonly controlled Person shall have an equal and proportionate
benefit under the provisions of this Agreement, without preference, priority, or
distinction as among all of the Securities.
ARTICLE VI
THE SERVICER
Section 6.1 Representations and Warranties of the Servicer. The
----------------------------------------------
Servicer makes the following representations and warranties on which the Trust
relies in accepting the Receivables and the other Trust Property in trust and in
issuing the Securities. These representations are made as of the Closing Date,
but shall survive the sale, transfer and assignment of the Receivables and the
other Trust Property to the Trust and the pledge to the Indenture Trustee
pursuant to the Indenture.
(i) Organization and Good Standing. The Servicer
------------------------------
has been duly incorporated and is validly existing as a national banking
association, with the power and authority to own its properties and to
conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and shall
have, the power, authority and legal right to service the Receivables.
(ii) Due Qualification. The Servicer is duly
-----------------
qualified to do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions where
the failure to do so would materially and adversely affect the ability of
the Servicer to service, or the enforceability of, the Receivables.
(iii) Power and Authority. The Servicer has the
-------------------
power, authority and legal right to execute and deliver the Transfer and
Servicing Agreements to which it is a party and to carry out the respective
terms of such agreements; and the execution, delivery and performance of
the Transfer and Servicing Agreements to which it is a party has been duly
authorized by the Servicer by all necessary corporate action.
(iv) No Consent Required. The Servicer is not
-------------------
required to obtain the consent of any other Person, or any consent,
license, approval or authorization or
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registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery or performance of the
Transfer and Servicing Agreements to which it is a party other than as may
be required under ERISA.
(v) Binding Obligation. Each of the Transfer and
------------------
Servicing Agreements to which it is a party constitutes a legal, valid, and
binding obligation of the Servicer, enforceable against the Servicer in
accordance with the respective terms of such agreement subject, as to
enforceability, to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(vi) No Violation. The execution, delivery and
------------
performance of the Transfer and Servicing Agreements to which it is a
party, the consummation of the transactions contemplated thereby and the
fulfillment of the terms thereof will not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the certificate of
incorporation or bylaws of the Servicer, or conflict with or breach any of
the terms or provisions of, or constitute (with or without notice or lapse
of time) a default under, any indenture, agreement, mortgage, deed of trust
or other instrument to which the Servicer is a party or by which the
Servicer is bound or to which any of its properties are subject, or result
in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument (other than the Transfer and Servicing
Agreements), or violate any law, order, rule, or regulation applicable to
the Servicer or its properties of any federal or state regulatory body, any
court, administrative agency, or other governmental instrumentality having
jurisdiction over the Servicer or any of its properties.
(vii) No Proceedings. There are no proceedings or
--------------
investigations pending, or, to the Servicer's knowledge, threatened, before
any court, regulatory body, administrative agency, or tribunal or other
governmental instrumentality having jurisdiction over the Servicer or its
properties: (a) asserting the invalidity of the Transfer and Servicing
Agreements or the Securities, (b) seeking to prevent the issuance of the
Securities or the consummation of any of the transactions contemplated by
the Transfer and Servicing Agreements, (c) seeking any determination or
ruling that might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability of,
the Transfer and Servicing Agreements or the Securities, or (d) that may
adversely affect the federal or state income, excise, franchise or similar
tax attributes of the Securities.
Section 6.2 Liability of the Servicer; Indemnities. (a) The
--------------------------------------
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer under this Agreement and
shall have no other obligations or liabilities hereunder.
(b) The Servicer shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust, and the
Securityholders from and against any
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and all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation, arising out
of or resulting from the use, ownership, or operation by the Servicer or any
Affiliate thereof of any Financed Vehicle or in respect of any action taken, or
failed to be taken, by the Servicer with respect to any Receivable or other
portion of the Trust Property.
(c) The Servicer shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust and the
Securityholders from and against any taxes that may at any time be asserted
against the Trustees, the Trust or the Securityholders with respect to the
transactions contemplated hereby, including any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or license
taxes (but not including any taxes asserted with respect to, and as of the date
of, the sale, transfer and assignment of the Trust Property to the Trust or the
issuance and original sale of the Securities, or asserted with respect to
ownership of the Receivables or other Trust Property, federal or other income
taxes, including franchise taxes measured by net income, arising out of
distributions on the Securities or any other transactions contemplated by the
Basic Documents or transfer taxes arising in connection with transfers of the
Securities) and reasonable costs and expenses in defending against the same.
(d) The Servicer shall indemnify, defend and hold harmless the
Trustees, their directors, officers, employees and agents, the Trust and the
Securityholders from and against any and all costs, expenses, losses, claims,
damages, and liabilities, to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon, or incurred by, the
Trust, the Trustees or the Securityholders as a result of the willful
misfeasance, negligence, or bad faith of the Servicer in the performance of its
duties under the Basic Documents.
(e) The Servicer (other than the Indenture Trustee in its capacity as
successor Servicer pursuant to Section 7.2 hereof) shall indemnify, defend and
hold harmless the Trustees and their directors, officers, employees and agents,
from and against all costs, expenses, losses, claims, damages and liabilities
arising out of or incurred in connection with (x) in the case of the Owner
Trustee, the Indenture Trustee's performance of its duties under the Basic
Documents, (y) in the case of the Indenture Trustee, the Owner Trustee's
performance of its duties under the Basic Documents or (z) the acceptance,
administration or performance by, or action or inaction of, the applicable
Trustee of the trusts and duties contained in this Agreement, the Basic
Documents, the Indenture (in the case of the Indenture Trustee) and the Trust
Agreement (in the case of the Owner Trustee), including the administration of
the Trust Property, and in the case of the Indenture Trustee, in the transfer of
the servicing duties hereunder to a successor Servicer, except in such case to
the extent that such cost, expense, loss, claim, damage or liability: (i) is
due to the willful misfeasance, bad faith or negligence of the Person seeking to
be indemnified, (ii) to the extent otherwise payable to the Indenture Trustee,
arises from the Indenture Trustee's breach of any of its representations or
warranties in Section 6.13 of the Indenture or (iii) to the extent otherwise
payable to the Owner Trustee, arises from the Owner Trustee's breach of any of
its representations or warranties set forth in Section 6.6 of the Trust
Agreement.
(f) Indemnification under this Section 6.2 shall include reasonable
fees and expenses of counsel and expenses of litigation. The indemnity
obligations of the Servicer hereunder
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shall survive any termination of the Servicer pursuant to Section 7.1, but only
with respect to obligations arising prior thereto, and any payment of the amount
owing under, or the Repurchase Amount with respect to, any Receivable and shall
survive the termination of the Trust or the earlier removal or resignation of
the Owner Trustee or the Indenture Trustee. If the Servicer shall have made any
indemnity payments pursuant to this Section 6.2 and the recipient thereafter
collects any of such amounts from others, the recipient shall, as soon as
practicable upon receipt thereof, repay such amounts to the Servicer, without
interest.
Section 6.3 Merger or Consolidation of the Servicer. Any
---------------------------------------
corporation or other entity (i) into which the Servicer may be merged or
consolidated, (ii) that may result from any merger, conversion, or consolidation
to which the Servicer is a party, or (iii) that may succeed by purchase and
assumption to all or substantially all of the business of the Servicer, where
the Servicer is not the surviving entity, which corporation or other entity
shall be an Eligible Servicer and shall execute an agreement of assumption to
perform every obligation of the Servicer under this Agreement, shall be the
successor to the Servicer under this Agreement (without relieving the outgoing
Servicer of its responsibilities hereunder, if it survives such merger,
conversion or consolidation) without any further act on the part of any of the
parties to this Agreement. The Servicer shall promptly inform the Owner Trustee
and the Indenture Trustee and the Rating Agencies of any such merger,
conversion, consolidation or purchase and assumption where the Servicer is not
the surviving entity.
Section 6.4 Limitation on Liability of the Servicer and Others.
--------------------------------------------------
(a) Except as provided in this Agreement, the Servicer shall be under no
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its duties to service the Receivables in accordance with this
Agreement and that in its opinion may cause it to incur any expense or
liability; provided, however, that the Servicer may undertake, at its expense,
-------- -------
any reasonable action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties to this Agreement and the
interests of the Securityholders under this Agreement.
(b) The Servicer, and any director or officer or employee or agent of
the Servicer, may rely in good faith on any document of any kind, believed by it
to be genuine and properly executed and submitted by any Person respecting any
matters arising hereunder.
Section 6.5 Servicer Not to Resign. The Servicer shall not resign
----------------------
from its obligations and duties under this Agreement except upon a determination
that the performance of its duties is no longer permissible under applicable
law. Any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel (which counsel shall be outside counsel to
the Servicer) to such effect delivered to each Trustee. No such resignation
shall become effective until the Indenture Trustee or a successor servicer shall
have assumed the responsibilities and obligations of the outgoing Servicer in
accordance with Section 7.2.
Section 6.6 Servicer May Own Certificates. The Servicer, and any
-----------------------------
Affiliate of the Servicer, may, in its individual or any other capacity, become
the owner or pledgee of Securities with the same rights as it would have if it
were not the Servicer or an Affiliate thereof, except as otherwise provided in
the definition of "Securityholder," "Noteholder" and "Certificateholder" in
Section 1.1.
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Securities so owned by or pledged to the Servicer 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 Securities.
ARTICLE VII
SERVICING TERMINATION
Section 7.1 Events of Servicing Termination. (a) If any one of the
-------------------------------
following events ("Events of Servicing Termination") shall occur and be
-------------------------------
continuing:
(i) Any failure by the Servicer to deliver to the
Trustees the Servicer's Certificate for any Collection Period, which shall
continue beyond the earlier of three Business Days from the date the
Servicer's Certificate was due to be delivered and the related Deposit
Date, or any failure by the Servicer to deliver to any of the Accounts or
the Reserve Account any proceeds or payment required to be so delivered
under the terms of the Securities and this Agreement, which shall continue
unremedied for a period of five Business Days following the due date
therefor (or, in the case of a payment or deposit to be made no later than
a Deposit Date immediately preceding a Distribution Date, the failure to
make such payment or deposit by such Distribution Date); or
(ii) Any failure on the part of the Servicer duly to
observe or to perform in any material respect any other covenants or
agreements set forth in the Transfer and Servicing Agreements, which
failure shall (a) materially and adversely affect the rights of
Securityholders and (b) continue unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given (1) to the Servicer by either Trustee, or
(2) to the Owner Trustee or the Indenture Trustee and the Servicer by the
holders of the Notes (so long as Notes are outstanding) evidencing not less
than a majority of the principal amount of such Notes then outstanding (or,
if no Notes are outstanding, Certificates evidencing not less than a
majority of the Certificate Balance then outstanding);
(iii) The entry of a decree or order by a court or
agency or supervisory authority of competent jurisdiction for the
appointment of a conservator, receiver, liquidator or trustee for the
Servicer in any bankruptcy, insolvency, readjustment of debt, marshaling of
assets and liabilities, or similar proceedings, or for the winding up or
liquidation of its affairs, and any such decree or order continues unstayed
and in effect for a period of 60 consecutive days; or
(iv) The consent by the Servicer to the appointment
of a conservator, receiver, liquidator or trustee in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and liabilities, or
similar proceedings of or relating to the Servicer or relating to
substantially all of its property, the admission in writing by the Servicer
of its inability to pay its debts generally as they become due, the filing
by the Servicer of a petition
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to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, the making by the Servicer of an assignment for the
benefit of its creditors or the voluntary suspension by the Servicer of
payment of its obligations; or
(v) The failure by the Servicer to be an Eligible
Servicer;
then, and in each and every case and so long as an Event of Servicing
Termination shall not have been cured or waived, the Indenture Trustee or
holders of Notes evidencing not less than a majority of the principal amount of
such Notes then outstanding, by notice then given in writing to the Servicer
(and to the Indenture Trustee if given by the Noteholders), may terminate all of
the rights and obligations of the Servicer under this Agreement. On or after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Securities or the
Trust Property or otherwise, shall pass to and be vested in the Indenture
Trustee or successor servicer appointed by the Indenture Trustee pursuant to
Section 7.2; and thereupon the Indenture Trustee shall be 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 Receivable Files or the Insurance Policies, the certificates
of title to the Financed Vehicles, or otherwise. The Servicer shall cooperate
with the Indenture Trustee or such successor servicer in effecting the
termination of the Servicer's responsibilities and rights as Servicer under this
Agreement, including the transfer to the Indenture Trustee or such successor
servicer for administration of all cash amounts that are at the time held by the
Servicer for deposit, shall have been deposited by the Servicer in the
Collection Account, or thereafter shall be received with respect to a
Receivable, all Receivable Files and all information or documents that the
Indenture Trustee or such successor servicer may require. In addition, the
Servicer shall transfer its electronic records relating to the Receivables to
the successor servicer in such electronic form as the successor servicer may
reasonably request. All reasonable costs and expenses incurred by the successor
servicer, including allowable compensation of employees and overhead costs, in
connection with the transfer of servicing shall be paid by the outgoing Servicer
upon presentation of reasonable documentation of such costs and expenses.
If no Notes are outstanding and the Indenture has been discharged in
accordance with its terms, and in each and every case and so long as an Event of
Servicing Termination shall not have been cured or waived, the Owner Trustee or
the holders of Certificates evidencing not less than a majority of the
Certificate Balance of such Certificates then outstanding, by notice then given
to the Servicer (and to the Owner Trustee if given by the Certificateholders),
may terminate all of the rights and obligations of the Servicer under this
Agreement. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Securities or the Trust Property or otherwise, shall pass to and be
vested in a successor servicer appointed by the Owner Trustee pursuant to
Section 7.2; and thereupon the successor servicer shall be 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 Receivable Files or the Insurance Policies, the certificates
of title to the Financed Vehicles, or otherwise. The Servicer shall cooperate
with the
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successor servicer in effecting the termination of the Servicer's
responsibilities and rights as Servicer under this Agreement, including the
transfer to such successor servicer for administration of all cash amounts that
are at the time held by the Servicer for deposit, shall have been deposited by
the Servicer in the Collection Account, or thereafter shall be received with
respect to a Receivable, all Receivable Files and all information or documents
that such successor servicer may require. In addition, the Servicer shall
transfer its electronic records relating to the Receivables to the successor
servicer in such electronic form as the successor servicer may reasonably
request. All reasonable costs and expenses incurred by the successor servicer,
including allowable compensation of employees and overhead costs, in connection
with the transfer of servicing shall be paid by the outgoing Servicer upon
presentation of reasonable documentation of such costs and expenses.
(b) If any of the foregoing Events of Servicing Termination occur,
the Indenture Trustee shall have no obligation to notify Noteholders or any
other person and the Owner Trustee shall have no obligation to notify the
Certificateholders or any other Person of such occurrence prior to the
continuance of such event through the end of any cure period specified in
Section 7.1(a).
Section 7.2 Trustee to Act; Appointment of Successor Servicer.
-------------------------------------------------
Upon the Servicer's resignation pursuant to Section 6.5, or upon the Servicer's
receipt of notice of termination as Servicer pursuant to Section 7.1, the
Indenture Trustee (or if no Notes are outstanding, a successor servicer
appointed by the Owner Trustee) shall be the successor in all respects to the
Servicer in its capacity as Servicer under this Agreement, and shall be subject
to all the responsibilities, duties and liabilities relating thereto placed on
the Servicer by the terms and provisions of this Agreement, except that such
Trustee, when acting as a successor servicer, shall not be obligated to make any
Advances hereunder or purchase Receivables pursuant to Section 3.7 unless the
obligation to purchase arose after the date of the notice of termination given
to the Servicer pursuant to Section 7.1 and relating to actions taken solely by
such Trustee as successor servicer, and such Trustee shall not be liable for any
acts or omissions of such terminated Servicer or for any breach by the
terminated Servicer of any of its representations or warranties contained herein
or in any related documents or agreements. As compensation therefor, the
Indenture Trustee (or if no Notes are outstanding, a successor servicer
appointed by the Owner 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 or
resignation had been given. Notwithstanding the above, the Indenture Trustee
may, if it shall be unwilling or legally unable so to act, appoint, or petition
a court of competent jurisdiction to appoint, an Eligible Servicer as the
successor to the terminated Servicer under this Agreement. In connection with
such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor servicer out of payments on Receivables as it and
such successor shall agree, which, in no event, shall be greater than that
payable to First Security Bank, N.A. in its capacity as the Servicer hereunder.
Such Indenture Trustee (or if no Notes are outstanding, a successor servicer
appointed by the Owner Trustee) or such successor servicer shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. No Servicer shall resign or be relieved of its duties under
this Agreement until a newly appointed servicer shall have assumed the
responsibilities and obligations of the terminated Servicer under this
Agreement. Notwithstanding anything herein or in the Indenture to the contrary,
in no event shall the Indenture Trustee be liable for any Servicing Fee or for
any differential in the amount of the Servicing Fee paid hereunder and
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the amount necessary to induce any successor Servicer to act as successor
Servicer under this Agreement and the transactions set forth or provided for
herein.
Section 7.3 Effect of Servicing Transfer. (a) After the transfer of
----------------------------
servicing hereunder, the Indenture Trustee (or, if no Notes are outstanding, a
successor servicer appointed by the Owner Trustee) or the successor servicer
shall notify Obligors to make directly to the successor servicer payments that
are due under the Receivables after the effective date of such transfer.
(b) Except as provided in Sections 6.2 and 8.6 after the transfer of
servicing hereunder, the outgoing Servicer shall have no further obligations
with respect to the management, administration, servicing, custody or collection
of the Receivables and the successor servicer shall have all of such
obligations, except that the outgoing Servicer will transmit or cause to be
transmitted directly to the successor servicer for its own account, promptly on
receipt and in the same form in which received, any amounts held by the outgoing
Servicer (properly endorsed where required for the successor servicer to collect
any such items) received as payments upon or otherwise in connection with the
Receivables and the outgoing Servicer shall continue to cooperate with the
successor servicer by providing information and in the enforcement of the Dealer
Agreements, the Dealer Assignments and the Insurance Policies.
(c) A transfer of servicing hereunder shall not affect the rights and
duties of the parties hereunder (including the obligations and indemnities of
the Seller pursuant to Sections 2.4, 5.1 and 5.2 or, with respect to obligations
and indemnities arising prior to, or concurrently with, a transfer of servicing
hereunder, the outgoing Servicer pursuant to Section 3.7, 6.1 and 6.2) other
than those relating to the management, administration, servicing, custody or
collection of the Receivables and the other Trust Property. The successor
servicer shall, upon its appointment pursuant to Section 7.2 and as part of its
duties and responsibilities under this Agreement, promptly take all action it
deems necessary or appropriate so that the outgoing Servicer (in whatever
capacity) is paid or reimbursed all amounts it is entitled to receive under this
Agreement on each Distribution Date subsequent to the date on which it is
terminated as Servicer hereunder.
(d) Any successor servicer shall provide the Seller with access to
the Receivable Files and to the successor servicer's records (whether written or
automated) with respect to the Receivable Files. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the successor servicer. Nothing in this Section 7.3
shall affect the obligation of the successor servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of the successor servicer to provide access to information as a result
of such obligation shall not constitute a breach of this Section 7.3.
Section 7.4 Notification to Securityholders. Upon any notice of an
-------------------------------
Event of Servicing Termination or upon any termination of, or appointment of a
successor to, the Servicer pursuant to this Article VII, the Indenture Trustee
(or, if no Notes are outstanding, a successor servicer appointed by the Owner
Trustee pursuant to Section 7.2) shall give prompt written notice thereof to
Securityholders at their respective addresses of record, and to the Rating
Agencies at the following addresses: Moody's Investors Service, Inc., 99 Church
Street, New York, New York
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10007, Attention: ABS Monitoring Department, 4th Floor; Standard & Poor's
Ratings Group, 26 Broadway, New York, New York 10004-1064, Attention: Asset
Backed Surveillance Group.
Section 7.5 Waiver of Past Events of Servicing Termination. The
----------------------------------------------
holders of Notes evidencing not less than a majority of the aggregate
outstanding principal balance of the Notes (or the holders of any Certificates
evidencing not less than a majority of the Certificate Balance then outstanding
in the case of any Event of Servicing Termination that does not adversely affect
the Indenture Trustee or the Noteholders) may, on behalf of all such holders of
Notes and Certificates waive any Event of Servicing Termination hereunder and
its consequences, except an event resulting from the failure to make any
required deposits to, or payments from, any of the Accounts or the Reserve
Account in accordance with this Agreement. Upon any such waiver of a past Event
of Servicing Termination, such event shall cease to exist, and shall be deemed
to have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other event or impair any right arising therefrom,
except to the extent expressly so waived.
Section 7.6 Transfer of Accounts. Notwithstanding the provisions
--------------------
of Section 7.1, if any of the Accounts or the Reserve Account is maintained with
the Servicer or any Affiliate of the Servicer and an Event of Servicing
Termination shall occur and be continuing, the Servicer shall promptly, and in
any event within five Business Days, give written notice to the Indenture
Trustee and the Seller (or the Owner Trustee with respect to the Certificate
Distribution Account) of such Event of Servicing Termination, and Indenture
Trustee or the Seller (or the Owner Trustee, if applicable), as the case may be,
within five days after the receipt of such notice, shall establish new Eligible
Deposit Accounts conforming with the requirements of this Agreement and promptly
shall transfer all funds in any such Accounts or the Reserve Account to such new
Eligible Deposit Accounts.
ARTICLE VII
TERMINATION
Section 8.1 Termination of this Agreement. (a) This Agreement and
------------------------------
the respective obligations and responsibilities of the Seller, the Servicer, and
each Trustee hereunder shall terminate (except as otherwise expressly provided
herein) upon the earliest of: (i) the Distribution Date next succeeding the
purchase by the Servicer at its option, pursuant to Section 8.2, of the
Receivables (other than Liquidating Receivables) remaining in the Trust, (ii)
the payment to Securityholders of all amounts required to be paid to them
pursuant to this Agreement or (iii) the maturity or the liquidation of the last
Receivable held in the Trust and the disposition of any amounts received upon
liquidation of any property remaining in the Trust. The Servicer shall promptly
notify in writing each Trustee of any prospective termination pursuant to this
Section 8.1, which notice shall contain the information required by each Trustee
to give its notice thereunder.
(b) Notice of any termination, specifying the Distribution Date upon
which the Noteholders may surrender the Notes to the Indenture Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Indenture Trustee upon receipt of written notice
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from the Issuer by letter to Noteholders of record and the Rating Agencies
mailed not earlier than the 15th day and not later than the 25th day of the
month next preceding the specified Distribution Date stating the amount of any
such final payment and that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Notes at the office of the Indenture Trustee therein
specified. Upon presentation and surrender of the Notes, the Indenture Trustee
shall cause to be distributed to Noteholders amounts distributable on such
Distribution Date pursuant to Section 4.5. Amounts remaining after distribution,
or providing for distribution, to the Noteholders shall be distributed to the
Seller.
(c) Notice of any termination, specifying the Distribution Date upon
which the Certificateholders may surrender the Certificates to the Owner Trustee
for payment of the final distribution and cancellation, shall be given promptly
by the Owner Trustee by letter to Certificateholders of record and the Rating
Agencies mailed not earlier than the 15th day and not later than the 25th day of
the month next preceding the Specified Distribution Date stating the amount of
any such final payment and that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office of the Owner Trustee therein
specified. Upon presentation and surrender of the Certificates, the Owner
Trustee shall cause to be distributed to the Certificateholders amounts
distributable on such Distribution Date pursuant to Section 4.5. Amounts
remaining after distribution, or providing for distribution to the
Certificateholders shall be distributed to the Seller.
(d) If, within eighteen months after the first notice, all the
Securities shall not have been surrendered for cancellation, the Servicer may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Securityholders concerning surrender of their Securities,
and the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed to the Seller and the
Securityholders shall thereafter look solely to the Seller for such payment.
Section 8.2 Optional Purchase of All Receivables. In the event
------------------------------------
that (i) the Aggregate Receivables Balance shall be 10% or less of the Aggregate
Starting Receivables Balance as of the last day of any Collection Period and
(ii) the aggregate Repurchase Amount for the Receivables (other than the
Liquidating Receivables) is greater than or equal to the sum of the outstanding
principal balance of all of the Class A-4 Notes and the Class B Notes, the
Servicer shall have the option to purchase the corpus of the Trust on any
Distribution Date after the Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes have been paid in full occurring in a subsequent Collection
Period. To exercise such option, the Servicer shall notify each Trustee no later
than the 10th day of the month in which such purchase is to be effected and
deposit the aggregate Repurchase Amount for the Receivables (other than
Liquidating Receivables) into the Collection Account on the Deposit Date
occurring in the month in which such purchase is to be effected. The payment
shall be made in the manner specified in Section 4.3, and shall be distributed
pursuant to Section 4.5. Upon such payment the Servicer shall succeed to and own
all interests in and to the Trust and the Trust Property.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment. (a) This Agreement may be amended by the
---------
Seller, the Servicer and either Trustee, without the consent of any of the
Securityholders (i) to cure any ambiguity, (ii) to correct or supplement any
provision herein that may be defective or inconsistent with any other provision
herein or in the Basic Documents, (iii) to add or supplement any credit
enhancement for the benefit of Noteholders or Certificateholders; provided,
--------
however, that if such action shall affect any class of Noteholder or
-------
Certificateholder differently from any other class of Noteholder or
Certificateholder, such action shall not, as evidenced by an Opinion of Counsel
to the Seller delivered to each Trustee, materially and adversely affect the
interests of any Securityholder or cause the Trust to be classified for federal
tax purposes as an association taxable as a corporation, (iv) to add to the
covenants, restrictions or obligations of the Seller, the Servicer, the Owner
Trustee or the Indenture Trustee, or (v) to add, change or eliminate any other
provision of this Agreement in any manner that will not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
Noteholders or the Certificateholders.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and each Trustee, with the consent of the holders of Notes
evidencing not less than a majority of in principal amount of their outstanding
Notes and the holders of Certificates evidencing not less than a majority of the
Certificate Balance, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Noteholders or Certificateholders;
provided, however, that no such amendment shall (i) increase or reduce in any
-------- -------
manner the amount of, or accelerate or delay the timing of, or change the
allocation or priority of, collections of payments on Receivables or
distributions that are required to be made on any Note or Certificate, without
the consent of all adversely affected Noteholder's Certificateholders or (ii)
reduce the percentage of the aggregate outstanding receivable balance of the
Note or Certificates, the holders of which are required to consent to any such
amendment, without the consent of all Noteholders and Certificateholders.
Promptly after the execution of any such amendment or consent, the Issuer or the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Noteholder or Certificateholder, as applicable.
(c) It shall not be necessary for the consent of Securityholders
pursuant to this Section 9.1 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 of the execution thereof by Securityholders shall be subject
to such reasonable requirements as the Trustees may prescribe.
(d) Notice of any amendment of this Agreement shall be sent by the
Servicer to the Rating Agencies, at such address as the Rating Agencies may from
time to time specify in writing.
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(e) Each Trustee may, but shall not be obligated to, enter into any
such amendment which affects such Trustee's own rights, duties, indemnities or
immunities under this Agreement or otherwise.
(f) In connection with any amendment pursuant to this Section 9.1,
each Trustee shall be entitled to receive and rely on an Opinion of Counsel (at
the expense of the seller) to the effect that such amendment is authorized or
permitted by the Agreement and each Trustee shall be protected in so relying.
Section 9.2 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
Securityholders and the Trustees under this Agreement in the Trust Property and
in the proceeds thereof. The Servicer shall deliver (or cause to be delivered)
to each Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing. In the
event the Servicer fails to perform its obligations under this subsection, the
Trustee may (but shall not be obligated to) do so, at the expense of the
Servicer.
(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 by the Servicer in
accordance with paragraph (a) above seriously misleading within the meaning of
(S) 9-402(7) of the Relevant UCC, unless it shall have given the Trustees at
least 60 days' prior written notice thereof.
(c) The Seller and the Servicer shall give each Trustee at least 60
days' prior written notice of any relocation of their principal executive
offices if, as a result of such relocation, the applicable provisions of the
Relevant UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement. The
Seller and the Servicer shall at all times maintain each office from which it
shall service Receivables, and its principal executive office, within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know, as of the most recent monthly calculation, the status of such
Receivable, including payments, Liquidation Proceeds and Recoveries made and
payments owing (and the nature of each), and (ii) reconciliation between
payments, Recoveries or Liquidation Proceeds on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the Trust,
the Servicer's master computer records (including archives) that shall refer to
a Receivable indicate clearly that such Receivable is owned by the Trust.
Indication of the Trust's ownership of a Receivable shall be deleted from or
modified on the Servicer's computer systems when, and only when, the Receivable
shall be paid or shall become a Repurchased Receivable.
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(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 motor
vehicle retail installment sale contracts to any prospective purchaser, lender
or other transferee, the Seller or the Servicer, as the case may be, shall give
to such prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate clearly
that such Receivable has been sold and is owned by the Trust.
(g) Upon request, the Servicer, at its expense, shall furnish to each
Trustee, within 10 Business Days, a list of all Receivables then held as part of
the Trust, together with a reconciliation of such list to each Schedule of
Receivables and to the Servicer's Certificate furnished pursuant to Section 3.9
indicating removal of Receivables from the Trust. Each Trustee shall hold any
such list and the Schedule of Receivables, as well as a copy of this Agreement,
available for inspection during normal business hours at the Corporate Trust
Office.
(h) The Servicer shall deliver to the Trustees upon the Closing Date,
upon the date which is 60 months after the initial filings required hereunder to
perfect the security interest of the Trust and upon the execution and delivery
of each amendment, if any, of this Agreement, an Opinion of Counsel to the
Servicer either (x) stating that, in the opinion of such counsel, no filings or
other action, other than the filings required in the appropriate filing offices
as described in such opinion, are necessary to perfect and maintain (i) the
security interest of the Trust in the Financed Vehicles, subject to certain
exceptions stated therein, and (ii) the interest of the Trust in the
Receivables, the Dealer Agreements or the Dealer Assignments and in each case
the proceeds thereof against third parties, subject to certain exceptions stated
therein, and reciting the details of such filings or referring to prior Opinions
of Counsel in which such details are given, or (y) stating that, in the opinion
of such counsel, no such action shall be necessary to perfect or continue the
perfected status of such interest.
Section 9.3 Limitation on Rights of Securityholders. (a) The
---------------------------------------
death or incapacity of any Securityholder shall not operate to terminate this
Agreement or the Trust, or entitle the Securityholder's legal representatives or
heirs to claim an accounting or to take any action or commence any proceeding in
any court for a partition or winding up of the Trust, or otherwise affect the
rights, obligations, and liabilities of the parties to this Agreement or any of
them.
(b) No Securityholder shall have any right to vote (except as
expressly provided herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties to this Agreement,
nor shall anything set forth in this Agreement, or contained in the terms of the
Securities, be construed so as to constitute the holders as partners or members
of an association; nor shall any Securityholder be under any liability to any
third party by reason of any action taken pursuant to any provision of this
Agreement.
(c) To the extent a specified percentage in principal amount of the
outstanding Notes must be obtained to take an action, such action shall be valid
only if the holders of such specified percentage in principal amount of (i) all
the outstanding Class A Notes and Class B Notes voting together as a single
class and (ii) the outstanding Class A Notes voting as a single class have voted
to take such action.
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Section 9.4 Governing Law. All issues and questions concerning the
-------------
construction, validity, interpretation and enforceability of this Agreement
shall be governed by and construed in accordance with, the laws of the State of
New York, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of New York.
Section 9.5 Notices. All demands, notices, directions and
-------
communications under this Agreement shall be in writing, personally delivered,
or sent by telecopier, overnight courier or mailed by certified mail, return
receipt requested, and shall be deemed to have been duly given upon receipt (a)
in the case of the Seller, the Servicer or the Administrator, to First Security
Bank, N.A. at Office of the General Counsel, 79 South Main Street, Salt Lake
City, Utah 84111, Attention: Executive Vice President and General Counsel,
Facsimile No.: 801-246-5422, or at such other address as shall be designated by
the Seller or the Servicer in a written notice to the Trustees, with a copy to
_________________________, First Security Capital Markets, Inc., 41 East 100
South, 3rd Floor, Salt Lake City, Utah 84111, Facsimile No.: 801-246-5973 (b) in
the case of the Owner Trustee, at the Corporate Trust Office, Facsimile No.:
________________, (c) in the case of the Indenture Trustee, at the Corporate
Trust Office, Facsimile No.: ________________ and (d) in the case of a Rating
Agency, to Moody's at Moody's Investors Service, 99 Church Street, 4th Floor,
New York, New York 10007, Facsimile No.: 212-553-3856 and to S&P at Standard &
Poor's Ratings Group, 26 Broadway, 15th Floor, New York, New York 10004-1064,
Facsimile No.: 212-412-0300. Any notice required or permitted to be mailed to a
Securityholder shall be given by first class mail, postage prepaid, at the
address of record of such holder. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Securityholder shall receive such notice.
Section 9.6 Severability of Provisions. If any one or more of the
--------------------------
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, 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 Securities or the rights of the
holders thereof.
Section 9.7 Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Section 6.3, this Agreement may not be
assigned by the Servicer.
Section 9.8 Assignment to Indenture Trustee. The Seller hereby
-------------------------------
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Trust to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders (and, to the extent expressly
provided therein, the Certificateholders) of all right, title and interest of
the Trust in, to and under the Trust Property and/or the assignment of any or
all of the Trust's rights and obligations hereunder pursuant to the Indenture.
Section 9.9 Intention of Parties. The execution and delivery of
--------------------
this Agreement shall constitute an acknowledgment by the Seller and the Trust,
on behalf of the Securityholders, that it is intended that the assignment and
transfer herein contemplated constitute a sale and assignment
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outright, and not for security, of the Receivables and the other Trust Property,
conveying good title thereto free and clear of any liens, from the Seller to the
Trust, and that the Receivables and the other Trust Property shall not be a part
of the Seller's estate in the event of the bankruptcy, insolvency, receivership,
conservatorship or the occurrence of another similar event of, or with respect
to, the Seller. In the event that such conveyance is determined to be made as
security for a loan made by the Trust or the Securityholders to the Seller, the
parties intend that the Seller shall have granted to the Trust a security
interest in all of the Seller's right, title and interest in, to and under the
Trust Property conveyed to the Trust pursuant to Section 2.1 in order to secure
the obligations under the Securities, and that this Agreement shall constitute a
security agreement under applicable law.
Section 9.1 Counterparts. For the purpose of facilitating the
------------
execution of this Agreement and for other purposes, this Agreement may be
executed in one or more counterparts, and by different parties hereto on
separate counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute one and the same
instrument.
Section 9.1 Limitation of Liability of the Trustees. (a)
---------------------------------------
Notwithstanding anything contained herein to the contrary (i) this Agreement has
been accepted by ______________________, not in its individual capacity but
solely as the Indenture Trustee and in no event shall _________________________
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Seller or Trust 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 Seller or Trust and (ii)
under no circumstances shall _________________________ be personally liable for
the payment of any indebtedness or expenses of the Trust; provided, however,
-------- -------
nothing contained herein shall relieve _________________________ of its
obligations contained herein in its capacity as successor servicer.
(b) Notwithstanding anything contained herein to the contrary (i)
this Agreement has been accepted by _________________________, not in its
individual capacity but solely as the Owner Trustee and in no event shall
_________________________ have any liability for the representations,
warranties, covenants, agreements or other obligations of the Seller 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 Seller and
(ii) under no circumstances shall _________________________ be personally liable
for the payment of any indebtedness or expenses of the Trust.
* * * * *
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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 thereunto
duly authorized as of the day and year first above written.
FIRST SECURITY BANK, N.A.,
as Seller and Servicer
By:_____________________________________
Name:______________________________
Title: Authorized Officer
FIRST SECURITY AUTO OWNER TRUST
20__-__
By: _________________________________,
not in its individual capacity but
solely as Owner Trustee of the
Trust
By:_____________________________________
Name:______________________________
Title:_____________________________
Acknowledged and Accepted,
____________________________________,
not in its individual capacity
but solely as Indenture Trustee
By:_________________________________
Name:__________________________
Title:_________________________
<PAGE>
EXHIBIT A
Form of Servicer's Certificate
------------------------------
The undersigned certifies that he is a duly authorized officer of
First Security Bank, N.A., a national banking association organized under the
laws of the United States (the "Bank"), and that he is duly authorized to
----
execute and deliver this certificate on behalf of the Bank pursuant to Section
3.9 of the Sale and Servicing Agreement, dated as of __________, 20__, by and
between the Bank, as seller and servicer, and First Security Auto Owner Trust
20__-__ (the "Sale and Servicing Agreement"), and he further HEREBY CERTIFIES
----------------------------
that:
1. the report for the period from _________________________ to
_________________________ attached to this certificate is complete and accurate
and contains all information required by Section 3.9 of the Sale and Servicing
Agreement; and
2. as of the date hereof, no Event of Servicing Termination or event
that with notice or lapse of time or both would become an Event of Servicing
Termination, has occurred.
Any capitalized terms used herein but not defined shall have the
meanings assigned to such term in the Sale and Servicing Agreement.
IN WITNESS HEREOF, the undersigned has affixed hereunto his signature
and the corporate seal of the Bank as of this ___ day of ______________.
FIRST SECURITY BANK, N.A.
By:_________________________________
Name:__________________________
Title: Authorized Officer
<PAGE>
SCHEDULE A
Schedule of Receivables
-----------------------
(See attached)
<PAGE>
SCHEDULE B
Receivable File Locations
-------------------------
On the date hereof, the Receivables and Receivable Files for the Servicer
are held by the Consumer Loan Servicing Department of First Security Service
Company, an affiliate of the Servicer, located at 3033 Elder Street, Boise,
Idaho 83705. A portion of the Receivables Files are stored at a facility located
at Professional Records Management, 1090 Boeing, Boise, Idaho 83705.
