<PAGE>
Exhibit 4.3
Volkswagen Public Auto Loan Securitization, LLC
Seller,
VW Credit, Inc.
Servicer
and
----------
Trustee
on behalf of the Holders
FORM OF POOLING AND SERVICING AGREEMENT
Dated as of ________ __, 200_
VOLKSWAGEN AUTO LOAN ENHANCED TRUST 200_-_
____% Asset Backed Certificates, Class A
____% Asset Backed Certificates, Class B
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ARTICLE I
DEFINITIONS....................................................
1
Section 1.1
Definitions........................................... 1
Section 1.2
Other Interpretative Provisions....................... 19
Section 1.3
Calculations.......................................... 20
Section 1.4
References............................................ 20
Section 1.5
Action by or Consent of Holders....................... 20
ARTICLE II THE TRUST
PROPERTY............................................ 20
Section 2.1
Conveyance of Trust Property.......................... 20
Section 2.2
Representations and Warranties as to Each Receivable.. 20
Section 2.3
Representations and Warranties as to the Receivables
in the Aggregate...................................... 23
Section 2.4
Repurchase upon Breach................................ 24
Section 2.5
Custodian of Receivable Files......................... 25
ARTICLE III ADMINISTRATION AND SERVICING OF TRUST
PROPERTY............... 28
Section 3.1
Duties of Servicer.................................... 28
Section 3.2
Collection of Receivable Payments..................... 29
Section 3.3
Realization upon Receivables.......................... 29
Section 3.4
Physical Damage Insurance............................. 30
Section 3.5
Maintenance of Security Interests in Financed
Vehicles.............................................. 30
Section 3.6
Covenants of Servicer................................. 31
Section 3.7
Purchase by Servicer upon Breach...................... 31
Section 3.8
Servicing Compensation................................ 32
Section 3.9
Servicer's Report..................................... 32
Section 3.10
Annual
Statement as to Compliance..................... 33
Section 3.11
Annual
Independent Certified Public Accountants'
Report................................................ 33
Section 3.12
Access to
Certain Documentation and Information
Regarding Receivables................................. 33
Section 3.13
Reports to
the Commission............................. 34
Section 3.14
Reports to
the Rating Agency.......................... 34
Section 3.15
Servicer
Expenses..................................... 34
ARTICLE IV DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO
HOLDERS......... 34
Section 4.1
Establishment of Accounts............................. 34
Section 4.2
Collections........................................... 35
Section 4.3
[RESERVED]............................................ 37
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Section 4.4
Additional Deposits; Net Deposits..................... 37
Section 4.5
Distributions......................................... 37
Section 4.6
Reserve Account....................................... 39
Section 4.7
Statements to Holders................................. 41
ARTICLE V THE
CERTIFICATES...............................................
42
Section 5.1
The
Certificates...................................... 42
Section 5.2
Authentication of Certificates........................ 43
Section 5.3
Registration of Transfer and Exchange of
Certificates.......................................... 43
Section 5.4
Mutilated, Destroyed, Lost or Stolen Certificates..... 44
Section 5.5
Persons Deemed Owners................................. 44
Section 5.6
Access to List of Holders' Names and Addresses........ 44
Section 5.7
Maintenance of Office or Agency....................... 45
Section 5.8
Book
Entry Certificates............................... 45
Section 5.9
Notices to Clearing Agency............................ 46
Section 5.10
Definitive
Certificates............................... 46
ARTICLE VI
SELLER........................................................
47
Section 6.1
Representations and Warranties of Seller.............. 47
Section 6.2
Merger or Consolidation of, or Assumption of the
Obligations of, Seller................................ 48
Section 6.3
Limitation on Liability of Seller and Others.......... 49
ARTICLE VII
SERVICER.....................................................
49
Section 7.1
Representations and Warranties of Servicer............ 49
Section 7.2
Indemnities of Servicer............................... 51
Section 7.3
Merger or Consolidation of or Assumption of the
Obligations of Servicer............................... 52
Section 7.4
Limitation on Liability of Servicer and Others........ 52
Section 7.5
VW
Credit, Inc........................................ 53
Section 7.6
Servicer May Own Certificates......................... 53
Section 7.7
Existence............................................. 53
ARTICLE VIII SERVICING
TERMINATION....................................... 53
Section 8.1
Servicer Termination Events........................... 53
Section 8.2
Trustee to Act;
Appointment of Successor Servicer..... 55
Section 8.3
Effect of Servicing Transfer.......................... 56
Section 8.4
Notification to Holders............................... 57
Section 8.5
Waiver of Past Servicer Termination Events............ 57
Section 8.6
Transfer of Accounts.................................. 57
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ARTICLE IX
TRUSTEE.......................................................
57
Section 9.1
Acceptance by Trustee................................. 57
Section 9.2
Duties of Trustee..................................... 57
Section 9.3
Trustee's Certificate................................. 59
Section 9.4
Trustee's Assignment of Purchased Receivables......... 59
Section 9.5
Certain Matters Affecting Trustee..................... 60
Section 9.6
Trustee Not Liable for Certificates or Receivables.... 62
Section 9.7
Trustee May Own Certificates.......................... 63
Section 9.8
Trustee's Fees and Expenses........................... 63
Section 9.9
Eligibility Requirements for Trustee.................. 63
Section 9.10
Resignation or Removal of Trustee..................... 63
Section 9.11
Successor
Trustee..................................... 64
Section 9.12
Merger or
Consolidation of or Assumption of
Obligations of Trustee................................ 65
Section 9.13
Appointment of Co-Trustee or Separate Trustee......... 65
Section 9.14
Representations and Warranties of Trustee............. 67
Section 9.15
Reports by
Trustee.................................... 68
Section 9.16
Tax
Returns........................................... 68
Section 9.17
Trustee
May Enforce Claims Without Possession of
Certificates.......................................... 68
ARTICLE X
TERMINATION....................................................
68
Section 10.1
Termination of the Trust.............................. 68
Section 10.2
Optional
Purchase of All Receivables.................. 69
ARTICLE XI MISCELLANEOUS
PROVISIONS...................................... 70
Section 11.1
Amendment............................................. 70
Section 11.2
Protection
of Title to Trust Property................. 71
Section 11.3
Limitation
on Rights of Holders....................... 73
Section 11.4
Governing
Law......................................... 74
Section 11.5
Notices............................................... 74
Section 11.6
Severability of Provisions............................ 74
Section 11.7
Assignment............................................ 74
Section 11.8
Certificates Nonassessable and Fully Paid............. 74
Section 11.9
Intention
of Parties.................................. 75
Section 11.10
Counterparts.......................................... 75
Section 11.11
Further
Assurances.................................... 75
Section 11.12
No Waiver;
Cumulative Remedies........................ 75
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Section 11.13
Regulation
AB......................................... 75
Section 11.14
Information to
Be Provided by the Trustee............. 76
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SCHEDULE
SCHEDULE A LOCATION OF
RECEIVABLE FILES................................. S-1
EXHIBITS
EXHIBIT A FORM
OF CLASS A CERTIFICATE..................................
A-1
EXHIBIT B FORM
OF CLASS B CERTIFICATE..................................
B-1
EXHIBIT C FORM
OF SERVICER'S REPORT....................................
C-1
EXHIBIT D
SERVICING CRITERIA...........................................
D-1
EXHIBIT E FORM
OF TRUSTEE'S ANNUAL CERTIFICATION.......................
E-1
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POOLING AND SERVICING AGREEMENT dated as of ____________, 200_,
between Volkswagen Public Auto Loan Securitization, LLC, a Delaware
limited
liability company, as Seller, VW Credit, Inc., a Delaware
corporation, as
Servicer, and __________, a ______________________, as trustee
hereunder.
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 capitalized words and phrases, unless the context
otherwise requires,
have the following meanings:
"Accounts" means collectively the Collection Account, the Class
A
Distribution Account, the Class B Distribution Account and the
Payahead Account.
"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, instruments, certificated securities,
book entry
securities, uncertificated securities or otherwise), and all
proceeds of the
foregoing.
"Actuarial Receivable" means a Receivable that provides for (i)
amortization of the loan over a series of fixed level payment
monthly
installments and (ii) each monthly installment, including the
monthly
installment representing the final payment on the Receivable, to
consist of an
amount of interest equal to 1/12 of the Contract Rate of the loan
multiplied by
the unpaid principal balance of the loan, and an amount of
principal equal to
the remainder of the monthly installment.
"Acquired Receivable" means a Receivable acquired by a the
Transferor
through a bulk purchase of Receivables or the acquisition of a
financial
institution that owned the Receivable.
"Additional Servicing" means, for each Distribution Date, an
amount
equal to the lesser of (i) the amount by which (A) the aggregate
amount of the
Servicing Fee for such Distribution Date and all prior Distribution
Dates
exceeds (B) the aggregate amount of Additional Servicing paid to
the Servicer on
all prior Distribution Dates and (ii) the amount, if any, by which
(A) the sum
of Available Interest and Available Principal for such Distribution
Date exceed
(B) the sum, without duplication of (x) the Servicing Fee paid on
such
Distribution Date with respect to the related Collection Period and
any accrued
and unpaid Servicing Fee for prior Collection Periods, (y) all
amounts required
to be distributed to the Holders on such
<PAGE>
Distribution Date and (z) the amount, if any, deposited in the
Reserve Account
on such Distribution Date.
"Administration Agreement" means the Administration Agreement dated
as
of _______, 200_ by and among the Trust, the Administrator and the
Indenture
Trustee as amended, restated and otherwise modified from time to
time
"Administrator" means VW Credit in its capacity as administrator
of
the Trust under the Administration Agreement, and any successor
thereto.
"Affiliate" means, with respect to any specified Person, any
other
Person controlling, controlled by or under common control with such
specified
Person. For the purposes of this definition, "control" when used
with respect to
any specified Person 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. A Person
shall not be
deemed to be an Affiliate of any specified Person solely because
such other
Person has the contractual right or obligation to manage such
specified Person
or act as servicer with respect to the financial assets of such
specified Person
unless such other Person controls the specified Person through
equity ownership
or otherwise.
"Agreement" means this Pooling and Servicing Agreement, including
its
schedules and exhibits, as amended, modified or supplemented from
time to time.
"Authorized Officer" means any officer within the Corporate
Trust
Office of Trustee, including any vice president, assistant vice
president,
secretary, assistant secretary or any other officer of Trustee
customarily
performing functions similar to those performed by any of the above
designated
officers and also, with respect to a particular matter, any other
officer to
whom such matter is referred because of such officer's knowledge of
and
familiarity with the particular subject.
"Available Interest" means, for any Distribution Date, the sum of
the
following amounts for the related Collection Period: (a) that
portion of the
Collections on the Receivables received during the such Collection
Period that
is allocable to interest in accordance with Servicer's customary
servicing
procedures, (b) all Liquidation Proceeds received during the
related Collection
Period and (c) the Purchase Amounts, to the extent allocable to
accrued
interest, of all Receivables that are purchased by Servicer as of
the last day
of the related Collection Period. "Available Interest" for any
Distribution Date
shall exclude all payments and proceeds of any Receivables the
Purchase Amount
of which has been distributed on a prior Distribution Date.
"Available Principal" means, for any Distribution Date the sum of
the
following amounts with respect to the related Collection Period:
(a) that
portion of all Collections on the Receivables received during such
Collection
Period that is allocable to principal in accordance
2
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with Servicer's customary servicing procedures; and (b) the
Purchase Amounts, to
the extent attributable to principal, of all Receivables purchased
by Servicer
as of the last day of the related Collection Period. "Available
Principal" on
any Distribution Date shall exclude all payments and proceeds of
any Receivables
the Purchase Amount of which has been distributed on a prior
Distribution Date.
"Available Reserve Amount" is defined in Section 4.6.
"Book Entry Certificate" means beneficial interests in the
definitive
Certificates described in Section 5.8, the ownership of which shall
be
evidenced, and transfers of which shall be made, through book
entries by a
Clearing Agency as described in Section 5.8.
"Business Day" means a day that is not a Saturday or a Sunday and
that
in the States of New York, Illinois, Michigan and the State in
which the
Corporate Trust Office is located is neither a legal holiday nor a
day on which
banking institutions are authorized by law, regulation or executive
order to be
closed.
"Certificate" means any Class A Certificate or Class B
Certificate.
"Certificate Owner" means, with respect to a Book Entry
Certificate,
the Person who is the owner of such Book Entry Certificate, as
reflected on the
books of the Clearing Agency, or on the books of a Person
maintaining an account
with such Clearing Agency (directly or as an indirect participant,
in accordance
with the rules, regulations and procedures of such Clearing
Agency).
"Certificate Register" means the register maintained by Trustee
for
the registration of Certificates and of transfers and exchanges of
Certificates
as provided in Section 5.3.
"Class A Certificate" means a certificate executed by Trustee
on
behalf of the Trust and authenticated by Trustee substantially in
the form of
Exhibit A.
"Class A Certificate Balance" means, at any time, the original
Class A
Certificate Balance, as reduced by all amounts allocable to
principal on the
Class A Certificates distributed to Class A Holders prior to such
time.
"Class A Certificate Rate" means ____% per annum, calculated on
the
basis of a 360-day year consisting of twelve 30-day months.
"Class A Distribution Account" means the account established,
maintained and designated as the "Class A Distribution Account"
pursuant to
Section 4.1.
"Class A Holder" means the Person in whose name a Class A
Certificate
is registered in the Certificate Register, except that, solely for
the purpose
of giving any consent, request or waiver pursuant to this
Agreement, the
interest evidenced by any Class A Certificate
3
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registered in the name of the Transferor, Servicer, or any Person
actually known
to an Authorized Officer of Trustee to be an Affiliate, the
Transferor, or
Servicer, shall not be taken into account in determining whether
the requisite
percentage necessary to effect any such consent, request or waiver
shall have
been obtained.
"Class A Interest Carryover Shortfall" means, (a) with respect to
the
initial Distribution Date, zero, and (b) with respect to any other
Distribution
Date, the excess of Class A Monthly Interest for the preceding
Distribution Date
and any outstanding Class A Interest Carryover Shortfall on such
preceding
Distribution Date, over the amount in respect of interest that is
actually
deposited in the Class A Distribution Account on such preceding
Distribution
Date, plus 30 days of interest on such excess, to the extent
permitted by law,
in an amount equal to the product of one-twelfth multiplied by the
Class A
Certificate Rate multiplied by the amount of such excess.
"Class A Interest Distributable Amount" means, with respect to
any
Distribution Date, the sum of (a) the Class A Monthly Interest for
such
Distribution Date and (b) the Class A Interest Carryover Shortfall
for such
Distribution Date.
"Class A Monthly Interest" means, for any Distribution Date, an
amount
equal to one-twelfth (or the actual number of days from and
including the
Closing Date to but excluding _____________, 200_ divided by 360,
for the
initial Distribution Date) of the Class A Certificate Rate
multiplied by the
Class A Certificate Balance as of the close of business on the
immediately
preceding Distribution Date, after giving effect to all payments of
principal to
the Class A Certificates on or prior to such Distribution Date (or,
in the case
of the first Distribution Date, the Original Class A Certificate
Balance).
"Class A Monthly Principal" means, with respect to any
Distribution
Date, the Class A Percentage of Available Principal for such
Distribution Date
plus the Class A Percentage of Realized Losses with respect to the
related
Collection Period.
"Class A Percentage" means _____%.
"Class A Pool Factor" means, with respect to any Distribution
Date,
the Class A Certificate Balance as of the close of business on such
Distribution
Date (after giving effect to any payments to be made on such
Distribution Date)
divided by the Original Class A Certificate Balance, expressed as a
seven-digit
decimal.
"Class A Principal Carryover Shortfall" means, as of the close
of
business on any Distribution Date, the excess of Class A Monthly
Principal for
such Distribution Date and any outstanding Class A Principal
Carryover Shortfall
from the preceding Distribution Date over the amount in respect of
principal
that is actually deposited in the Class A Distribution Account on
such
Distribution Date.
"Class A Principal Distributable Amount" means, with respect to
any
Distribution Date, the sum of Class A Monthly Principal for such
Distribution
Date and, in the case of any
4
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Distribution Date other than the initial Distribution Date, the
Class A
Principal Carryover Shortfall as of the close of business on the
preceding
Distribution Date; provided that the Class A Principal
Distributable Amount
shall not exceed the Class A Certificate Balance prior to such
Distribution
Date. In addition, on the Final Scheduled Distribution Date, the
Class A
Principal Distributable Amount shall include, to the extent not
included under
the preceding sentence, the amount that is necessary (after giving
effect to the
other amounts to be deposited in the Class A Distribution Account
on such
Distribution Date and allocable to principal) to reduce the Class A
Certificate
Balance to zero.
"Class B Certificate" means a certificate executed by Trustee
on
behalf of the Trust and authenticated by Trustee substantially in
the form of
Exhibit B.
"Class B Certificate Balance" means, at any time, the Original
Class B
Certificate Balance, as reduced by all amounts allocable to
principal on the
Class B Certificates distributed to Class B Holders prior to such
time.
"Class B Certificate Owner" means, with respect to a Book Entry
Certificate representing a beneficial interest in the Class B
Certificates, the
Person who is the owner of such Book Entry Certificate, as
reflected on the
books of the Clearing Agency, or on the books of a Person
maintaining an account
with such Clearing Agency (directly or as an indirect participant
in accordance
with the rules, regulations and procedures of such Clearing
Agency).
"Class B Certificate Rate" means ____% per annum, calculated on
the
basis of a 360-day year consisting of twelve 30-day months.
"Class B Distribution Account" means the account established,
maintained and designated as the "Class B Distribution Account"
pursuant to
Section 4.1.
"Class B Holder" means the Person in whose name a Class B
Certificate
is registered in the Certificate Register, except that, solely for
the purpose
of giving any consent, request or waiver pursuant to this
Agreement, the
interest evidenced by any Class B Certificate registered in the
name of the
Transferor, Servicer, or any Person actually known to an Authorized
Officer of
Trustee to be an Affiliate of the Transferor or Servicer, shall not
be taken
into account in determining whether the requisite percentage
necessary to effect
any such consent, request or waiver shall have been obtained.
"Class B Interest Carryover Shortfall" means, (a) with respect to
the
initial Distribution Date, zero, and (b) with respect to any other
Distribution
Date, the excess of Class B Monthly Interest for the preceding
Distribution Date
and any outstanding Class B Interest Carryover Shortfall on such
preceding
Distribution Date, over the amount in respect of interest that is
actually
deposited in the Class B Distribution Account on such preceding
Distribution
Date, plus 30 days of interest on such excess, to the extent
permitted by law,
in an amount equal to the product of one-twelfth multiplied by the
Class B
Certificate Rate multiplied by the amount of such excess.
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"Class B Interest Distributable Amount" means, with respect to
any
Distribution Date, the sum of (a) the Class B Monthly Interest for
such
Distribution Date and (b) the Class B Interest Carryover Shortfall
for such
Distribution Date.
"Class B Monthly Interest" means, for any Distribution Date, an
amount
equal to one-twelfth (or the actual number of days from and
including the
Closing Date to but excluding __________, 200_ divided by 360, for
the initial
Distribution Date) of the Class B Certificate Rate multiplied by
the Class B
Certificate Balance as of the close of business on the immediately
preceding
Distribution Date, after giving effect to all payments of principal
to the Class
B Certificates on or prior to such Distribution Date (or, in the
case of the
first Distribution Date, the Certificate Balance on the Closing
Date).
"Class B Monthly Principal" means, with respect to any
Distribution
Date, the Class B Percentage of Available Principal for such
Distribution Date
plus the Class B Percentage of Realized Losses with respect to the
related
Collection Period.
"Class B Percentage" means __%.
"Class B Pool Factor" means, with respect to any Distribution
Date,
the Class B Certificate Balance as of the close of business on such
Distribution
Date (after giving effect to any payments to be made on such
Distribution Date)
divided by the Original Class B Certificate Balance, expressed as a
seven-digit
decimal.
"Class B Principal Carryover Shortfall" means, as of the close
of
business on any Distribution Date, the excess of Class B Monthly
Principal for
such Distribution Date and any outstanding Class B Principal
Carryover Shortfall
from the preceding Distribution Date over the amount in respect of
principal
that is actually deposited in the Class B Distribution Account on
such
Distribution Date.
"Class B Principal Distributable Amount" means, with respect to
any
Distribution Date, the sum of Class B Monthly Principal for such
Distribution
Date and, in the case of any Distribution Date other than the
initial
Distribution Date, the Class B Principal Carryover Shortfall as of
the close of
business on the preceding Distribution Date; provided that the
Class B Principal
Distributable Amount shall not exceed the Class B Certificate
Balance prior to
such Distribution Date. In addition, on the Final Scheduled
Distribution Date,
the Class B Principal Distributable Amount shall include, to the
extent not
included under the preceding sentence, the amount that is necessary
(after
giving effect to the other amounts to be deposited in the Class B
Distribution
Account on such Distribution Date and allocable to principal) to
reduce the
Class B Certificate Balance to zero.
"Clearing Agency" means an organization registered as a
"clearing
agency" pursuant to Section 17A of the Exchange Act, as
amended.
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"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 the date of the initial issuance of the
Certificates hereunder.
"Code" means the Internal Revenue Code of 1986 and the Treasury
Regulations promulgated thereunder.
"Collection Account" means the segregated account or accounts
established, maintained and designated as the "Collection Account"
pursuant to
Section 4.1.
"Collection Period" means, (a) in the case of the initial
Collection
Period, the period from [but not including] the Cutoff Date to and
including
___________ __, 200_ and (b) thereafter, each calendar month during
the term of
this Pooling and Servicing Agreement. With respect to any
Determination Date,
Deposit Date or Distribution Date, the "related Collection Period"
means the
Collection Period preceding the month in which such Determination
Date, Deposit
Date or Distribution Date occurs.
"Collections" means
all collections on the Receivables and any
proceeds from Insurance Policies and lender's single interest
insurance
policies.
"Commission" means the Securities and Exchange Commission.
"Contract Rate" means, with respect to a Receivable, the rate
per
annum of interest charged on the outstanding principal balance of
such
Receivable.
"Corporate Trust Office" means the principal office of 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: ______________, Telephone: _______________,
Facsimile:
________________ or at such other address as Trustee may designate
from time to
time by notice to the Holders, the Transferor, Seller and Servicer,
or the
principal corporate trust office of any successor Trustee (the
address of which
the successor Trustee will notify the Holders, the Transferor,
Seller and
Servicer).
"Custodian" means Servicer in its capacity as agent of the Trustee,
as
custodian of the Receivable Files and the Transferor acting as
agent for
Servicer for the purpose of maintaining custody of the Receivables
Files.
"Cutoff Date" means the [opening] of business on ___________
__,
200_.
"Cutoff Date Principal Balance" means, with respect to any
Receivable,
the Initial Principal Balance of such Receivable minus the sum of
the portion of
all payments received
7
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under such Receivable from or on behalf of the related Obligor on
or prior to
the Cutoff Date and allocable to principal in accordance with the
terms of the
Receivable.
"Dealer" means, with respect to any Receivable, the seller of
the
related Financed Vehicle.
"Dealer Agreement" means an agreement between an Originator and
a
Dealer pursuant to which such Originator acquires Motor Vehicle
Loans from the
Dealer or gives such Dealer the right to induce persons to apply to
such
Originator for loans in connection with the retail sale of Motor
Vehicles by
such Dealer.
"Dealer Recourse" means, with respect to any Dealer, any rights
and
remedies against such Dealer under the related Dealer Agreement
(other than with
respect to any breach of representation or warranty thereunder)
with respect to
credit losses on a Receivable secured by a Financed Vehicle sold by
such Dealer.
"Defaulted Receivable" means, with respect to any Collection
Period, a
Receivable (other than a Purchased Receivable) which Servicer has
determined to
charge off during such Collection Period in accordance with its
customary
servicing practices; provided that any Receivable which Servicer is
obligated to
repurchase or purchase shall be deemed to have become a Defaulted
Receivable
during a Collection Period if Servicer fails to deposit the related
Purchase
Amount on the related Deposit Date when due.
"Definitive Certificates" is defined in Section 5.8.
"Delivery" when used with respect to Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-102(47)
of
the UCC and are susceptible of physical delivery, transfer thereof
to
Trustee or its nominee or custodian by physical delivery to Trustee
or
its nominee or custodian endorsed to, or registered in the name
of,
Trustee or
its nominee or custodian or endorsed in blank, and, with
respect to a "certificated security" (as defined in Section 8-102
of
the UCC) transfer thereof (i) by delivery of such certificated
security endorsed to, or registered in the name of, Trustee or
its
nominee or custodian or endorsed in blank to a "financial
intermediary" (as defined in Section 8-313 of the UCC) and the
making
by such financial intermediary of entries on its books and
records
identifying such certificated securities as belonging to Trustee
or
its nominee or custodian and the sending by such financial
intermediary of a confirmation of the purchase of such
certificated
security by Trustee or its nominee or custodian, or (ii) by
delivery
thereof to a "clearing corporation" (as defined in Section 8-102(3)
of
the UCC) and the making by such clearing corporation of
appropriate
entries on its books reducing the appropriate
8
<PAGE>
securities account of the transferor and increasing the
appropriate
securities account of a financial intermediary by the amount of
such
certificated security, the identification by the clearing
corporation
of the certificated securities for the sole and exclusive account
of
the financial intermediary, the maintenance of such
certificated
securities by such clearing corporation or a "custodian bank"
(as
defined in Section 8-102(4) of the UCC) or the nominee of
either
subject to the clearing corporation's exclusive control, the
sending
of a confirmation by the financial intermediary of the purchase
by
Trustee or its nominee or custodian of such securities and the
making
by such financial intermediary of entries on its books and
records
identifying such certificated securities as belonging to Trustee
or
its nominee or custodian (all of the foregoing, "Physical
Property"),
and, in any event, any such Physical Property in registered form
shall
be in the name of Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any
such
Account Property to Trustee or its nominee or custodian,
consistent
with changes in applicable law or regulations or the
interpretation
thereof;
(b) with respect to any securities issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or by the Federal
National
Mortgage Association that is a book-entry security held through
the
Federal Reserve System pursuant to Federal book-entry regulations,
the
following procedures, all in accordance with applicable law,
including
applicable Federal regulations and Articles 8 and 9 of the UCC:
book-entry
registration of such Account Property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a
financial intermediary which is also a "depository" pursuant to
applicable Federal regulations and issuance by such financial
intermediary of a deposit advice or other written confirmation of
such
book-entry registration to Trustee or its nominee or custodian of
the
purchase by Trustee or its nominee or custodian of such
book-entry
securities; the making by such financial intermediary of entries
in
its books and records identifying such book entry security held
through the Federal Reserve System pursuant to Federal
book-entry
regulations as belonging to Trustee or its nominee or custodian
and
indicating that such custodian holds such Account Property solely
as
agent for Trustee or its nominee or custodian; and such additional
or
alternative procedures as may hereafter become appropriate to
effect
complete transfer of ownership of any such Account Property to
Trustee
or its nominee or custodian, consistent with changes in applicable
law
or regulations or the interpretation thereof; and
(c) with respect to any item of Account Property that is an
uncertificated security under Article 8 of the UCC and that is
not
governed by clause (b) above, registration on the books and records
of
the issuer thereof in the name of the financial intermediary,
the
sending of a confirmation by the financial intermediary of the
purchase by Trustee or its nominee or custodian of
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<PAGE>
such
uncertificated security, the making by such financial
intermediary of entries on its books and records identifying
such
uncertificated certificates as belonging to Trustee or its nominee
or
custodian.
"Deposit Date" means, with respect to any Collection Period,
the
Business Day preceding the related Distribution Date.
"Depository Agreement" means the agreement among Seller,
Servicer,
Trustee and the initial Clearing Agency, dated the Closing
Date.
"Determination Date" with respect to any Collection Period, means
the
tenth day of the calendar month following such Collection Period
(or, if the
tenth day is not a Business Day, the next succeeding Business
Day).
"Direct Loan" means motor vehicle promissory notes and security
agreements executed by an Obligor in favor of a motor vehicle
lender.
"Distribution Date" means the _____ day of each month (or, if the
___
day is not a Business Day, the next succeeding Business Day),
commencing _______
__, 200_.
"Dollar" and the sign "$" mean lawful money of the United
States.
"Eligible Deposit Account" means either (a) a segregated account
with
an Eligible Institution or (b) a segregated trust account with the
corporate
trust department of a depository institution organized under the
laws of the
United States of America or any one of the states thereof or the
District of
Columbia (or any domestic branch of a foreign bank), having
corporate trust
powers and acting as trustee for funds deposited in such account,
so long as the
long-term unsecured debt of such depository institution shall have
a credit
rating from each Rating Agency in one of its generic rating
categories which
signifies investment grade. Any such accounts (other than the
Reserve Account)
may be maintained with _____________, or any of its Affiliates, if
such accounts
meet the requirements described in clause (a) of the preceding
sentence.
"Eligible Institution" means a depository institution (which may
be
Servicer or any Affiliate of Servicer or Trustee) organized under
the laws of
the United States of America or any one of the states thereof or
the District of
Columbia (or any domestic branch of a foreign bank), which (a) has
(i) either a
long-term senior unsecured debt rating of AA or a short-term senior
unsecured
debt or certificate of deposit rating of A-1+ or better by S&P
and (ii) (A) a
short-term senior unsecured debt rating of A-1 or better by S&P
and (B) a
short-term senior unsecured debt rating of P-1 or better by
Moody's, or any
other long-term, short-term or certificate of deposit rating
acceptable to the
Rating Agencies and (b) whose deposits are insured by the Federal
Deposit
Insurance Corporation. If so qualified, Servicer, any Affiliate of
Servicer or
Trustee may be considered an Eligible Institution.
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<PAGE>
"Eligible Investments" shall mean any one or more of the
following
types of investments:
(a) direct obligations of, and obligations fully guaranteed as
to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of
any depository institution (including any Affiliate of the
Transferor
Seller, Trustee or any Affiliate of the Trustee) or trust
company
incorporated under the laws of the United States of America or
any
state thereof or the District of Columbia (or any domestic branch
of a
foreign bank) and subject to supervision and examination by Federal
or
state banking or depository institution authorities (including
depository receipts issued by any such institution or trust company
as
custodian with respect to any obligation referred to in clause
(a)
above or a portion of such obligation for the benefit of the
holders
of such depository receipts); provided that at the time of the
investment or contractual commitment to invest therein (which shall
be
deemed to be made again each time funds are reinvested following
each
Distribution Date), the commercial paper or other short-term
senior
unsecured debt obligations (other than such obligations the rating
of
which is based on the credit of a Person other than such
depository
institution or trust company) of such depository institution or
trust
company shall have a credit rating from S&P of A-1+ and from
Moody's
of
P-1;
(c) commercial paper (including commercial paper of any
Affiliate
of the Transferor Seller) having, at the time of the investment
or
contractual commitment to invest therein, a rating from S&P of
A-1+
and from
Moody's of P-1;
(d) investments in money market funds (including funds for
which
Trustee or any of its Affiliates or any of Seller's or
Transferor's
Affiliates is investment manager or advisor) having a rating from
S&P
of AAA-m or AAAm-and from Moody's of Aaa;
(e) bankers' acceptances issued by any depository institution
or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is
a
direct obligation of, or fully guaranteed by, the United States
of
America or any agency or instrumentality thereof the obligations
of
which are backed by the full faith and credit of the United States
of
America, in either case entered into with a depository institution
or
trust company (acting as principal) referred to in clause (b)
above;
and
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<PAGE>
(g) any other investment with respect to which each Rating
Agency
has provided written notice that such investment would not cause
such
Rating Agency to downgrade or withdraw its then current rating on
the
Class A Certificates or the Class B Certificates.
"Eligible Servicer" means a Person which, at the time of its
appointment as Servicer, (a) has a net worth of not less than
$50,000,000, (b)
is servicing a portfolio of motor vehicle retail installment sales
contracts
and/or motor vehicle loans, (c) is legally qualified, and has the
capacity, to
service the Receivables, (d) has demonstrated the ability to
service a portfolio
of 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 (e) is qualified and entitled to use
pursuant to a
license or other written agreement, and agrees to maintain the
confidentiality
of, the software which Servicer uses in connection with performing
its duties
and responsibilities under this 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.
"ERISA" means the Employment Retirement Income Security Act of
1974.
"Exchange Act" means the Securities Exchange Act of 1934.
"Final Scheduled Distribution Date" means the _______ __
Distribution
Date.
"Final Scheduled Maturity Date" means the last day of the
Collection
Period immediately preceding the Collection Period during which the
Final
Scheduled Distribution Date falls.
"Financed Vehicle" means, with respect to a Receivable, the
Motor
Vehicle, together with all accessories and accessions thereto,
securing or
purporting to secure the indebtedness under such Receivable.
"Fitch" means Fitch Ratings, or its successor.
"GAAP" is defined in Section 11.1(c).
"Holder" means the Person in whose name a Certificate is registered
in
the Certificate Register, except that, solely for the purpose of
giving any
consent, request or waiver pursuant to this Agreement, the interest
evidenced by
any Certificate registered in the name of the Transferor, Servicer
or any Person
actually known to an Authorized Officer of Trustee to be an
Affiliate of the
Transferor or Servicer, shall not be taken into account in
determining whether
the requisite percentage necessary to effect any such consent,
request or waiver
shall have been obtained.
"Initial Principal Balance" means, in respect of a Receivable,
the
amount advanced under the Receivable toward the purchase price of
the Financed
Vehicle and related
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<PAGE>
costs, including accessories, service and warranty contracts,
insurance
premiums, other items customarily financed as part of retail motor
vehicle loans
and/or retail installment sales contracts and other fees charged by
the
Transferor or Dealer and included in the amount to be financed, the
total of
which is shown as the initial principal balance in the note and
security
agreement or retail installment sale contract evidencing and
securing such
Receivable.
"Insurance Policies" means, all credit life and disability
insurance
policies maintained by the Obligors and all Physical Damage
Insurance Policies.
"Lien" means a security interest, lien, charge, pledge,
preference,
participation interest or encumbrance of any kind, other than liens
for taxes
not yet due and payable, mechanics' or materialmen's liens and
other liens for
work, labor or materials, and any other liens that may attach by
operation of
law.
"Liquidation Proceeds" means, with respect to any Receivable which
has
become a Defaulted Receivable, (a) insurance proceeds received by
Servicer with
respect to the Insurance Policies, (b) amounts received by Servicer
in
connection with such Defaulted Receivable pursuant to the exercise
of rights
under that Receivable and (c) the monies collected by Servicer
(from whatever
source, including proceeds of a sale of a Financed Vehicle or a
deficiency
balance recovered after the charge-off of the related Receivable or
as a result
of any Dealer Recourse) on such Defaulted Receivable net of any
expenses
incurred by Servicer in connection therewith and any payments
required by law to
be remitted to the Obligor.
"Majority Holders" means Holders of Certificates evidencing not
less
than a majority of the aggregate outstanding principal balance of
the Class A
Certificates and the Class B Certificates taken together as a
single class.
"Minimum Specified Reserve Balance" with respect to any
Distribution
Date means the lesser of (i) $______ and (ii) the aggregate
outstanding Class A
Certificate Balance and Class B Certificate Balance (after giving
effect to any
distributions on the Certificates on such Distribution Date).
"Moody's" means Moody's Investors Service, Inc.
"Motor Vehicle" means a new or used automobile or light duty
truck.
"Motor Vehicle Loan" means a Direct Loan or retail installment
sales
contract secured by a Motor Vehicle originated by the Transferor or
another
financial institution.
"Obligor" means, with respect to a Receivable, the borrower or
co-borrowers under the related Receivable and any co-signer of the
Receivable or
other Person who owes or may be primarily or secondarily liable for
payments
under such Receivable.
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<PAGE>
"Officer's Certificate" means a certificate signed by the
chairman,
the president, any vice president or the treasurer of the
Transferor or
Servicer, as the case may be, and delivered to Trustee.
"Opinion of Counsel" means a written opinion of counsel (who may be
an
employee of the Transferor or Servicer or any of their Affiliates)
reasonably
acceptable in form to Trustee.
"Original Certificate Balance" means the sum of the Original Class
A
Certificate Balance and the Original Class B Certificate
Balance.
"Original Class A Certificate Balance" means $_________.
"Original Class B Certificate Balance" means $_________.
"Original Pool Balance" means the Pool Balance as of the Cutoff
Date.
"Originator" means, with respect to any Direct Loan or retail
installment sales contract, the Transferor that was the lender with
respect to
such Direct Loan or that acquired such Direct Loan or retail
installment sales
contract from a Dealer or other Person.
"Payaheads" means early payments by or on behalf of Obligors on
Precomputed Receivables which, in accordance with the Servicer's
customary
practices, do not constitute scheduled payments or full prepayments
and are
applied to principal and interest in a subsequent period.
"Payahead Account" means the account designated as such,
established
and maintained pursuant to Section 4.1.
"Person" means a legal person, including any individual,
corporation,
estate, partnership, limited liability company, 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 Damage Insurance Policy" means a theft and physical
damage
insurance policy maintained by the Obligor under a Receivable,
providing
coverage against loss or damage to or theft of the related Financed
Vehicle.
"Pool Balance" means, at any time, the aggregate Principal Balance
of
the Receivables (excluding Defaulted Receivables) at such time.
"Pool Factor" means, with respect to any Collection Period, the
Pool
Balance as of the last day of such Collection Period divided by the
Original
Pool Balance, expressed as a seven-digit decimal.
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<PAGE>
"Precomputed Receivable" means (i) an Actuarial Receivable, (ii)
a
Rule of 78's Receivable or (iii) a Sum of Periodic Balances
Receivable.
"Principal Balance" means, as of any time, for any Receivable,
the
principal balance of such Receivable under the terms of the
Receivable
determined in accordance with the Servicer's customary
practices.
"Purchase Agreement" means each Purchase Agreement dated as of
________ __, 200_ by and between the Transferor and the Seller, as
amended,
restated or otherwise modified from time to time.
"Purchase Amount" of any Receivable means, with respect to any
Deposit
Date, an amount equal to the sum of (a) the outstanding Principal
Balance of
such Receivable as of the last day of the preceding Collection
Period and (b)
the amount of accrued and unpaid interest on such Principal Balance
at the
related Contract Rate from the date a payment was last made by or
on behalf of
the Obligor through and including the last day of such preceding
Collection
Period, in each case after giving effect to the receipt of monies
collected on
such Receivable in such preceding Collection Period.
"Purchased Receivable" means, at any time, a Motor Vehicle Loan
included in the Schedule of Receivables as to which payment of the
Purchase
Amount has previously been made by the Transferor or Servicer
pursuant to this
Agreement.
"Rating Agencies" means Moody's, S&P and Fitch.
"Rating Agency Condition" means, with respect to any action, that
each
Rating Agency shall have been given 10 days' prior notice thereof
(or such
shorter period as shall be acceptable to the Rating Agencies) and
that none of
the Rating Agencies shall have notified the Transferor Seller,
Servicer or
Trustee in writing that such action will, in and of itself, result
in a
reduction or withdrawal of the then current rating on the Class A
Certificates
or the Class B Certificates.
"Realized Losses" means, for any Collection Period, the
aggregate
Principal Balances of any Receivables that became Defaulted
Receivables during
such Collection Period.
"Receivable" means each Motor Vehicle Loan described in the
Schedule
of Receivables, but excluding (i) Defaulted Receivables to the
extent the
Principal Balances thereof have been deposited in the Collection
Account and
(ii) any Purchased Receivables.
"Receivable File" is defined in Section 2.5.
"Record Date" means, subject to Section 1.4, with respect to
any
Distribution Date, the last day of the related Collection
Period.
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<PAGE>
"Regulation AB" means Subpart 229.1100 - Asset Backed
Securities
(Regulation AB), 17 C.F.R. Sections 229.110-229.1123, as such
regulatiOn may be
amended from time to time and subject to such clarification and
interpretation
as have been provided by the Commission in the adopting release
(Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506,
1,531
(January 7, 2005)) or by the staff of the Commission, or as may be
provided in
writing by the Commission or its staff from time to time.
"Related Agreements" means the Certificates, the Depository
Agreement
and the underwriting agreement between Seller and the
underwriter(s) of the
Certificates. The Related Agreements to be executed by any party
are referred to
herein as "such party's Related Agreements", "its Related
Agreements" or by a
similar expression.
"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.
"Reserve Account" means the account established, maintained and
designated as the "Reserve Account" pursuant to Section 4.6.
"Reserve Account Initial Deposit" means cash or Eligible
Investments
having a value of at least $____________.
"Reserve Account Property" is defined in Section 4.6.
"Responsible Officer" means, with respect to the Trustee, any
officer
within the corporate trust department of the Trustee, including any
vice
president, assistant vice president, assistant secretary, assistant
treasurer,
trust officer or any other officer of the Trustee who customarily
performs
functions similar to those performed by the persons who at the time
shall be
such officers, respectively, or to whom any corporate trust matter
is referred
because of such person's knowledge of and familiarity with the
particular
subject and who, in each case, shall have direct responsibility for
the
administration of the Agreement,
"Rule of 78's Receivable" means a Receivable that provides for
the
payment by the Obligor of a specified total amount of payments,
payable in equal
monthly installments on each due date, which total represents the
principal
amount financed and add-on interest in an amount calculated at the
stated
Contract Rate for the term of the Receivable and allocated to each
monthly
payment based upon a fraction, the numerator of which is the number
of payments
scheduled to have been made prior to the due date for such monthly
payments on
such Receivable and the denominator of which is the sum of all such
numbers of
payments to be made until the maturity of such Receivable.
"S&P" means Standard & Poor's Ratings Services, a division
of The
McGraw-Hill Companies, Inc.
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<PAGE>
"Schedule of Receivables" means, with respect to the Motor
Vehicle
Loans to be conveyed to Seller by the Transferor and to Trustee by
Seller, the
list identifying such retail Motor Vehicle Loans delivered to
Trustee on the
Closing Date.
"Securities Act" means the Securities Act of 1933.
"Securities Intermediary" is defined in Section 4.6 of this
Agreement.
"Seller" means Volkswagen Public Auto Loan Securitization, LLC, in
its
capacity as seller of the Receivables to the Trust under this
Agreement, or any
successor pursuant to Section 6.3.
"Servicer" means VW Credit, Inc., in its capacity as servicer of
the
Receivables under this Agreement, any successor pursuant to Section
7.3 or any
successor Servicer appointed and acting pursuant to Section
8.2.
"Servicer Termination Event" means an event specified in Section
8.1.
"Servicer's Report" is defined in Section 3.9.
"Servicing Criteria" shall mean the "servicing criteria" set forth
in
Item 1122(d) of Regulation AB.
"Servicing Fee" means, with respect to any Distribution Date,
an
amount equal to the product of (a) one-twelfth of the Servicing Fee
Rate,
multiplied by (b) the Pool Balance as of the beginning of the first
day of the
preceding Collection Period.
"Servicing Fee Rate" shall be ___% per annum, calculated on the
basis
of a 360-day year consisting of twelve 30-day months.
"Servicing Officer" means any individual 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
Trustee by Servicer, as such list may be amended from time to time
by Servicer
in writing.
"Simple Interest Method" means the method of allocating a fixed
level
payment monthly installments between principal and interest,
pursuant to which
such installment is allocated first to accrued and unpaid interest
at the
Contract Rate on the unpaid principal balance and the remainder of
such
installment 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.
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<PAGE>
"Specified Reserve Account Balance" means, for any Distribution
Date,
the greater of (a) ___% of the sum of the Class A Certificate
Balance plus the
Class B Certificate Balance on such Distribution Date (after giving
effect to
all payments on the Certificates to be made on or prior to such
Distribution
Date), and (b) the Minimum Specified Reserve Balance as of such
Distribution
Date.
"Sum of Periodic Balances Receivable" means a Receivable that
provides
for the payment by the obligor of a specified total amount of
payments, payable
in equal monthly installments on each due date, which total
represents the
principal amount financed and add-on interest in an amount
calculated at the
stated Contract Rate for the term of the Receivable and allocated
to each
monthly payment based upon a fraction, the numerator of which is
the principal
balance of such Receivable immediately prior to the due date for
such monthly
payment and the denominator of which is the sum of all principal
balances for
each monthly payment to be made until the maturity of such
Receivable.
"Supplemental Servicing Fee" is defined in Section 3.8.
"Transferor" means [Volkswagen Public Auto Loan Securitization,
LLC].
"Trust" means the trust created by this Agreement, which shall
be
known as Volkswagen Auto Loan Enhanced Trust 200_-_.
"Trustee" means _________, a ___________, as Trustee under this
Agreement and any successor Trustee appointed and acting pursuant
to this
Agreement.
"Trust Property" means:
(a) all right, title and interest of Seller in and to the
Receivables, and all moneys received thereon [on or] after the
Cutoff
Date;
(b) all right, title and interest of Seller in the security
interests in the Financed Vehicles granted by Obligors pursuant to
the
Receivables and any other interest of Seller in the Financed
Vehicles
and any other property that shall secure the Receivables;
(c) the interest of Seller in any proceeds with respect to the
Receivables from claims on any Insurance Policies covering
Financed
Vehicles or the Obligors or from claims under any lender's
single
interest insurance policy naming the Transferor as an insured;
(d) rebates of premiums relating to Insurance Policies and
rebates of other items such as extended warranties financed under
the
Receivables, in each case, to the extent the Servicer would, in
accordance with its customary practices, apply such amounts to
the
Principal Balance of the related Receivable;
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<PAGE>
(e) the interest of Seller in any proceeds from (i) any
Receivable repurchased by a Dealer, pursuant to a Dealer Agreement,
as
a result of a breach of representation or warranty in the
related
Dealer Agreement, (ii) a default by an Obligor resulting in the
repossession of the Financed Vehicle under the applicable Motor
Vehicle Loan or (iii) any Dealer Recourse or other rights relating
to
the Receivables under Dealer Agreements;
(f) all right, title and interest in all funds on deposit from
time to time in the Collection Account, the Payahead Account,
the
Class A Distribution Account and the Class B Distribution
Account
(including the Account Property related thereto) and in all
investments and
proceeds thereof (but excluding all investment income
thereon);
(g) all right, title and interest of Seller under each Purchase
Agreement, including the right of Seller to cause the Transferor
to
repurchase Receivables from Seller;
(h) all right, title and interest of Seller in any instrument
or
document relating to the Receivables; and
(i) the proceeds of any and all of the foregoing.
Notwithstanding anything to the contrary contained herein, the
Trust
Property shall not include, and the Trust shall not have any right
to,
the Reserve Account or any funds actually or deemed to be deposited
in
such account or any investments therein.
"UCC" means the Uniform Commercial Code as in effect in the
relevant
jurisdiction.
Section 1.2 Other Interpretative Provisions. For purposes of
this
Agreement, unless the context otherwise requires: (a) accounting
terms not
otherwise defined in this Agreement, and accounting terms partly
defined in this
Agreement to the extent not defined, shall have the respective
meanings given to
them under generally accepted accounting principles; (b) terms
defined in
Article 9 of the UCC as in effect in the relevant jurisdiction and
not otherwise
defined in this Agreement are used as defined in that Article; (c)
the words
"hereof," "herein" and "hereunder" and words of similar import
refer to this
Agreement as a whole and not to any particular provision of this
Agreement; (d)
references to any Article, Section, Schedule, Appendix or Exhibit
are references
to Articles, Sections, Schedules, Appendices and Exhibits in or to
this
Agreement and references to any paragraph, subsection, clause or
other
subdivision within any Section or definition refer to such
paragraph,
subsection, clause or other subdivision of such Section or
definition; (e) the
term "including" means "including without limitation"; (f) except
as otherwise
expressly provided herein, references to any law or regulation
refer to that law
or regulation as amended from time to time and include any
successor law or
regulation;
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<PAGE>
(g) references to any Person include that Person's successors and
assigns; and
(h) headings are for purposes of reference only and shall not
otherwise affect
the meaning or interpretation of any provision hereof.
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 Record Date prior to
the
first Record Date in the life of the Trust shall be to the Closing
Date. 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 on such day. All references
herein to the
close of business means the close of business, Detroit, Michigan
time.
Section 1.5 Action by or Consent of Holders. Whenever any provision
of
this Agreement refers to action to be taken, or consented to, by
Holders, such
provision shall be deemed to refer to Holders of record as of the
Record Date
immediately preceding the date on which such action is to be taken,
or consented
to, by Holders.
ARTICLE II
THE TRUST PROPERTY.
Section 2.1 Conveyance of Trust Property. In consideration of
Trustee's delivery to Seller or its designee of authenticated
Certificates, in
authorized denominations, in an aggregate amount equal to the
Original
Certificate Balance, Seller hereby sells, transfers, assigns and
conveys to
Trustee, upon the terms and conditions hereof, in trust for the
benefit of the
Holders, the Trust Property, without recourse (except to the extent
of the
Servicer's obligations under this Agreement and the Related
Agreements). The
sale, transfer, assignment, setting over and conveyance made
hereunder shall not
constitute and is not intended to result in an assumption by
Trustee, any Holder
or any Certificate Owner of any obligation of the Transferor 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.
Section 2.2 Representations and Warranties as to Each Receivable.
The
Servicer hereby makes the following representations and warranties
as to each
Receivable on which Trustee shall rely in accepting the Trust
Property in trust
and authenticating the Certificates. Unless otherwise indicated,
such
representations and 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.
(a) Characteristics of
Receivables. The Receivable has been fully
and properly executed by the parties thereto and (i) is a Direct
Loan
made by an
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Originator or has been originated by a Dealer in the ordinary
course
of such Dealer's business and has been purchased by an Originator,
in
either case, in the ordinary course of such Originator's business
and
in accordance with such Originator's underwriting standards to
finance
the retail sale by a Dealer of the related Financed Vehicle or
has
otherwise been acquired by the Transferor, (ii) the Originator
of
which has underwriting standards that require physical damage
insurance to be maintained on the related Financed Vehicle, (iii)
is
secured by a valid, subsisting, binding and enforceable first
priority
security interest in favor of the Transferor in the Financed
Vehicle
(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), which security interest is assignable
together with such Receivable, and has been so assigned to Seller,
and
subsequently assigned by Seller to Trustee, (iv) contains
customary
and enforceable provisions such that the rights and remedies of
the
holder thereof are adequate for realization against the collateral
of
the benefits of the security, (v) provided, at origination, for
level
monthly payments (provided that the amount of the last payment may
be
different), which fully amortize the Initial Principal Balance
over
the original term, (vi) provides for interest at the Contract
Rate
specified in the Schedule of Receivables, (vii) was originated in
the
United States, and (viii) constitutes "chattel paper" as defined
in
the UCC.
(b) Individual Characteristics. The Receivables have the
following individual characteristics as of the Cutoff Date: (i)
each
Receivable is secured by a Motor Vehicle; (ii) each Receivable has
a
Contract Rate of at least ____% and not more than ___%; (iii)
each
Receivable had a remaining number of scheduled payments, as of
the
Cutoff Date, of not less than ______ and not more than _____;
(iv)
each Receivable had an initial Principal Balance of not less
than
$_______ and not more than $_____; (v) no Receivable was more than
30
days past due as of the Cutoff Date; (vi) no Financed Vehicle had
been
repossessed as of the Cutoff Date; (vii) no Receivable is subject
to a
force placed Physical Damage Insurance Policy on the related
Financed
Vehicle; [(viii) each Receivable is a Simple Interest Receivable;]
and
(ix) the Dealer
of the Financed Vehicle has no participation in, or
other right to receive, any proceeds of the Receivable. The
Receivables were selected using selection procedures that were
not
intended by the Transferor or Seller to be adverse to the
Holders.
(c) Schedule of Receivables. The information with respect to
each
Receivable set forth in the Schedule of Receivables, including
(without limitation) the identity and address of the Obligor,
account
number, the Initial Principal Balance, the maturity date and
the
Contract Rate, was true and correct in all material respects as of
the
close of business on the Cutoff Date.
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(d) Compliance with Law. The Receivable 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 Federal Trade Commission Act, the
Magnuson-Moss
Warranty Act, the Fair Debt Collection Practices Act, Federal
Reserve
Board Regulations B and Z and any other consumer credit,
consumer
protection, equal opportunity and disclosure laws.
(e) Binding Obligation. The Receivable constitutes the genuine,
legal, valid and binding payment obligation in writing of the
Obligor,
enforceable in all material respects by the holder thereof in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally, and the Receivable is
not
subject to any right of rescission, setoff, counterclaim or
defense,
including the defense of usury.
(f) Lien in Force. Neither Seller nor the Transferor has taken
any action which would have the effect of releasing the related
Financed Vehicle from the Lien granted by the Receivable in whole
or
in part.
(g) No Amendment or Waiver. No material provision of the
Receivable has been amended, waived, altered or modified in any
respect, except such waivers as would be permitted under this
Agreement, and no amendment, waiver, alteration or modification
causes
such Receivable not to conform to the other representations or
warranties contained in this Section.
(h) No Liens. Neither Seller nor the Transferor has received
notice of any Liens or claims, including Liens for work, labor,
materials or unpaid state or federal taxes, relating to the
Financed
Vehicle securing the Receivable, that are or may be prior to or
equal
to the Lien granted by the Receivable.
(i) No Default. Except for payment delinquencies continuing for
a
period of not more than 30 days as of the Cutoff Date, to the
knowledge of Seller, no default, breach, violation or event
permitting
acceleration under the terms of the 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 the Receivable has arisen.
(j) Insurance. The Receivable requires the Obligor to insure
the
Financed Vehicle under a Physical Damage Insurance Policy, pay
the
premiums for such insurance and keep such insurance in full force
and
effect.
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(k) Good Title. No Receivable has been sold, transferred,
assigned, or pledged by Seller to any Person other than the
Trust.
Immediately prior to the transfer and assignment herein
contemplated,
Seller had good and marketable title to the Receivable free and
clear
of any Lien and had full right and power to transfer and assign
the
Receivable to the Trust and 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
Lien;
and the Trust's interest in the Receivable resulting from the
transfer
has been perfected under the UCC.
(l) Obligations. The Transferor has duly fulfilled all
obligations on its part to be fulfilled under, or in connection
with,
the Receivable.
(m) Possession. There is only one original executed Receivable,
and immediately prior to the Closing Date, the Transferor will
have
possession of such original executed Receivable.
(n) [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.]
(o) Marking Records. By the Closing Date, Seller shall have
caused the portions of Seller's and the Transferor's electronic
master
record of Motor Vehicle Loans relating to the Receivables to be
clearly and unambiguously marked to show that the Receivable is
owned
by Trustee in accordance with the terms of this Agreement.
(p) No Assignment. As of the Closing Date, 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 or Dealer Agreements, or payments due under the
Receivable,
that is senior to, or equal with, that of Trustee.
(q) Lawful Assignment. The Receivable has not been originated
in,
and is not subject to the laws of, any jurisdiction under which
the
sale, transfer or assignment of such Receivable hereunder or
pursuant
to transfers of the Certificates are unlawful, void or
voidable.
Neither Seller nor the Transferor has entered into any agreement
with
any obligor that prohibits, restricts or conditions the assignment
of
any portion of the Receivables.
Section 2.3 Representations and Warranties as to the Receivables
in
the Aggregate. The Servicer hereby makes the following
representations and
warranties as to the Receivables on which Trustee shall rely in
accepting the
Trust Property in trust and
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authenticating the Certificates. Unless otherwise indicated,
such
representations and 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.
(a) Amounts. The Original Pool Balance was $______________.
(b) Aggregate Characteristics. The Receivables had the
following
characteristics in the aggregate as of the Cutoff Date: (i)
approximately ___% of the Original Pool Balance was attributable
to
loans for purchases of new Financed Vehicles, and approximately
___%
of the Original Pool Balance was attributable to loans for
purchases
of used Financed Vehicles; (ii) approximately ___%, ___%, ___%
and
____% of the Original Pool Balance was attributable to Receivables
the
mailing addresses of the Obligors with respect to which are located
in
the States of __________, __________, __________, and
___________,
respectively, and no other state accounts for more than 5% of
the
Original Pool Balance; (iii) the weighted average Contract Rate of
the
Receivables was ____%; (iv) there are Receivables being conveyed
by
Seller to the Trust; (v) the average Cutoff Date Principal Balance
of
the Receivables was $________; and (vi) the weighted average
original
term and weighted average remaining term of the Receivables
were
______ months and ___ months, respectively.
Section 2.4 Repurchase upon Breach. Seller, Servicer or Trustee,
as
the case may be, shall inform the other parties to this Agreement
promptly, in
writing, upon the discovery of any breach or failure to be true of
the
representations or warranties made by Servicer in Section 2.2,
provided that the
failure to give such notice shall not affect any obligation of The
Servicer. If
the breach or failure shall not have been cured by the last day of
the
Collection Period which includes the 60th day (or if Servicer
elects, the 30th
day) after the date on which Servicer becomes aware of, or receives
written
notice from Trustee or the Servicer of, such breach or failure, and
such breach
or failure materially and adversely affects the interests of
Trustee and the
Holders in any Receivable, Servicer shall purchase each such
affected Receivable
from Trustee as of such last day of such Collection Period at a
purchase price
equal to the Purchase Amount for such Receivable as of such last
day of such
Collection Period. Notwithstanding the foregoing, any such breach
or failure
with respect to the representations and warranties contained in
Section 2.2 will
not be deemed to have such a material and adverse effect with
respect to a
Receivable if the facts resulting in such breach or failure do not
affect the
ability of the Trust to receive and retain payment in full on such
Receivable.
In consideration of the repurchase of a Receivable hereunder,
Servicer shall
remit the Purchase Amount of such Receivable, no later than the
close of
business on the next Deposit Date, in the manner specified in
Section 4.4. The
sole remedy of the Trust, Trustee or the Holders with respect to a
breach or
failure to be true of the representations or warranties made by
Servicer
pursuant to Section 2.2 shall be to require Servicer to purchase
Receivables
pursuant to this Section.
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<PAGE>
Section 2.5 Custodian of Receivable Files. (a) Custody. To
assure
uniform quality in servicing the Receivables and to reduce
administrative costs,
Trustee, upon the execution and delivery of this Agreement,
revocably appoints
the Custodian, as agent, and the Custodian accepts such
appointment, to act as
agent on behalf of Trustee to maintain custody of the following
documents or
instruments, which are hereby constructively delivered to Trustee
with respect
to each Receivable (collectively, a "Receivable File"):
(i) the fully executed original of the Receivable;
(ii) any documents customarily delivered to or held by Servicer
evidencing the existence of any Physical Damage Insurance
Policies;
(iii) the original credit application, fully executed by the
Obligor;
(iv) the original certificate of title, or such other documents
as
the Transferor, as appropriate, keeps on file, in accordance
with its customary procedures, evidencing the security interest
of the Transferor in the Financed Vehicle;
(v) originals or true copies of all documents, instruments or
writings relating to extensions, amendments or waivers of the
Receivable; and
(vi) any and all other documents or electronic records that the
Transferor or Servicer, as the case may be, keeps on file, in
accordance with its customary procedures, relating to the
Receivable, any Insurance Policies, the Obligor or the Financed
Vehicle.
(b) Safekeeping. Servicer, in its capacity as Custodian, shall
hold the Receivable Files as agent on behalf of Trustee for the
benefit of all present and future Holders, and maintain such
accurate
and complete accounts, records and computer systems pertaining to
each
Receivable as shall enable Servicer and Trustee to comply with
the
terms and provisions of this Agreement applicable to them. In
performing its duties as Custodian hereunder, the Custodian shall
act
with reasonable care, exercising the degree of skill, attention
and
care that Custodian exercises with respect to receivable files
relating to other similar motor vehicle loans owned and/or serviced
by
the Custodian and that is consistent with industry standards.
In
accordance with its customary practice with respect to its
retail
installment sale contracts, Custodian shall conduct, or cause to
be
conducted, periodic audits of the Receivable Files held by it
under
this Agreement, and of the related accounts, records, and
computer
systems, and shall maintain the Receivable Files in such a manner
as
shall enable Trustee to verify, if Trustee so elects, the accuracy
of
the
record keeping of Custodian. Custodian shall promptly report to
Trustee any failure on its part to hold the Receivable Files
and
maintain its accounts, records and computer systems as
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herein provided, and promptly take appropriate action to remedy
any
such failure. The Custodian hereby acknowledges receipt of the
Receivable File for each Receivable listed on the Schedule of
Receivables. Nothing herein shall be deemed to require Trustee
to
verify the accuracy of the record keeping of the Custodian.
(c) Maintenance of and Access to Records. The Custodian shall
maintain each Receivable File at the location specified in Schedule
A
to this Agreement, or at such other office of the Custodian within
the
United States (or, in the case of any successor Custodian, within
the
State in which its principal place of business is located) as shall
be
specified to Trustee by 30 days' prior written notice. Upon
Trustee's
reasonable request, the Custodian shall make available to Trustee
or
its agents (or, when requested in writing by Trustee, to its
attorneys
or
auditors) the Receivable Files and the related accounts,
records
and computer systems maintained by the Custodian at such times
during
the normal business hours of the Custodian for purposes of
inspecting,
auditing or making copies or abstracts of the same.
(d) Release of Documents. Upon written instructions from
Trustee,
Custodian shall release any document in the Receivable Files to
Trustee or its agent or designee, as the case may be, at such place
or
places as Trustee may designate, as soon thereafter as is
practicable.
Any document so released shall be handled by Trustee with due care
and
returned to the Custodian for safekeeping as soon as Trustee or
its
agent or designee, as the case may be, shall have no further
need
therefor.
(e) Title to Receivables. The Custodian agrees that, in respect
of any Receivable File held by the Custodian hereunder, the
Custodian
will not at any time have or in any way attempt to assert any
interest
in such Receivable File or the related Receivable, 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.
(f) Instructions; Authority to Act. The Custodian shall be
deemed
to
have received proper instructions with respect to the
Receivable
Files upon its receipt of written instructions signed by an
Authorized
Officer of Trustee. A certified copy of excerpts of certain
resolutions of the Board of Directors of Trustee 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 Custodian of written notice to the contrary given by
Trustee.
(g) Custodian's Indemnification. Custodian shall indemnify and
hold harmless Trustee, its officers, directors, employees and
agents
and the Holders
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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 Trustee or the Holders as the result of any act
or
omission of Custodian relating to the maintenance and custody of
the
Receivable Files; provided that the Custodian shall not be
liable
hereunder to the extent that such liabilities, obligations,
losses,
compensatory damages, payments, costs or expenses result from
the
willful misfeasance, bad faith or negligence of Trustee.
Indemnification under this Section 2.5(g) shall include
reasonable
fees and expenses of counsel and expenses of litigation and
shall
survive termination of this Agreement and the resignation or
removal
of Trustee. If Custodian shall have made any indemnity payments
to
Trustee pursuant to this Section and Trustee thereafter shall
collect
any of such amounts from Persons other than Custodian, Trustee
shall
immediately upon receipt thereof repay such amounts to
Custodian,
without interest.
(h) Effective Period
and Termination. 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
subsection (h). If Servicer shall resign as Servicer in
accordance
with Section 7.5 or if all of the rights and obligations of
Servicer
shall have been terminated under Section 8.1, the appointment
of
Servicer as Custodian hereunder may be terminated by Trustee or by
the
Majority Holders, in the same manner as Trustee or such Holders
may
terminate the rights and obligations of Servicer under Section
8.1.
Trustee may terminate Servicer's appointment as Custodian hereunder
at
any time with cause, or with 30 days' prior written notice
without
cause, upon written notification to Servicer. As soon as
practicable
after any termination of such appointment Servicer shall deliver,
or
cause to be delivered, the Receivable Files to Trustee,
Trustee's
agent or Trustee's designee at such place or places as Trustee
may
reasonably designate. Notwithstanding any termination of Servicer
as
Custodian hereunder (other than in connection with a
termination
resulting from the termination of Servicer, as such, pursuant
to
Section 8.1), from and after the date of such termination, and for
so
long as Servicer is acting as such pursuant to this Agreement,
Trustee
shall provide, or cause the successor Custodian to provide, access
to
the Receivable Files to Servicer, at such times as Servicer
shall
reasonably request, for the purpose of carrying out its duties
and
responsibilities with respect to the servicing of the
Receivables
hereunder.
(i) Delegation. Custodian may, at any time without notice or
consent, delegate any or all of its duties to the Transferor;
provided
that no such delegation shall relieve Custodian of its
responsibility
with respect to such duties and Custodian shall remain obligated
and
liable to Trustee and the Holders for its duties hereunder as
if
Custodian alone were performing such duties.
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ARTICLE III
ADMINISTRATION AND SERVICING OF TRUST PROPERTY.
Section 3.1 Duties of Servicer. (a) Servicer is hereby authorized
to
act as agent for the Trust and in such capacity shall manage,
service,
administer and make collections on the Receivables (other than
Purchased
Receivables), and perform the other actions required by Servicer
under this
Agreement, with reasonable care. Without limiting the standard set
forth in the
preceding sentence, Servicer shall use a degree of skill, attention
and care
that is not less than Servicer exercises with respect to comparable
Motor
Vehicle Loans that it services for itself or others and that is
consistent with
prudent industry standards. Servicer's duties shall include 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, sending payment coupons or monthly invoices to
Obligors,
reporting required tax information to Obligors, accounting for
Collections,
monitoring the status of Physical Damage Insurance Policies with
respect to the
Financed Vehicles as provided in Section 3.4(a), furnishing monthly
and annual
statements to Trustee with respect to distributions, providing
collection and
repossession services in the event of Obligor default and
performing the other
duties specified herein. Servicer shall also administer and enforce
all rights
and responsibilities of the holder of the Receivables provided for
in the
Physical Damage Insurance Policies as provided in Section 3.4(b)
and the Dealer
Agreements. Without limiting the generality of the foregoing,
Servicer is hereby
authorized and empowered by Trustee to execute and deliver, on
behalf of itself,
the Trust, Trustee and the Holders, 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 that
notwithstanding
the foregoing, Servicer shall not, except pursuant to an order from
a court of
competent jurisdiction, release an Obligor from payment of any
unpaid amount
under any Receivable or waive the right to collect the unpaid
balance of any
Receivable from the Obligor, except in connection with a de minimis
deficiency
which Servicer would not attempt to collect in accordance with its
customary
procedures. If Servicer shall commence a legal proceeding to
enforce a
Receivable, Trustee shall thereupon be deemed to have automatically
assigned
such Receivable to Servicer, which assignment shall be solely for
purposes of
collection. Trustee shall furnish Servicer with any powers of
attorney and other
documents or instruments necessary or appropriate to enable
Servicer to carry
out its servicing and administrative duties hereunder.
(b) Servicer may, at any time without notice (except that
Servicer shall give written notice to each Rating Agency of any
delegation outside the ordinary course of business of the
substantial
portion of its servicing business) or consent, delegate
specific
duties to
subcontractors who are in the business of performing such
duties; provided that no such delegation shall relieve Servicer of
its
responsibility with respect to such duties and Servicer shall
remain
obligated and liable to Trustee and the Holders for servicing
and
administering the Receivables in accordance with this Agreement as
if
Servicer alone were performing such duties.
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Section 3.2 Collection of Receivable Payments. (a) 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 Physical Damage
Insurance
Policies, the Dealer Agreements and the other Trust Property in
such manner as
will, in the reasonable judgment of 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. Servicer shall be entitled to amend or
modify any
Receivable in accordance with its customary procedures if Servicer
believes in
good faith that such amendment or modification is in the best
interests of the
Trust; provided that Servicer may not, unless ordered by a court of
competent
jurisdiction or otherwise required by applicable law, (i) extend a
Receivable
beyond the Final Scheduled Maturity Date, or (ii) reduce the
Principal Balance
or Contract Rate of any Receivable. If Servicer fails to comply
with the
provisions of the preceding sentence, Servicer shall be required to
purchase the
Receivable or Receivables affected thereby, for the Purchase
Amount, in the
manner specified in Section 4.7 as of the close of business for the
Collection
Period in which such failure occurs. Servicer may, in its
discretion (in
accordance with its customary standards, policies and procedures),
waive any
prepayment charge, late payment charge, extension fee or any other
fee that may
be collected in the ordinary course of servicing a Receivable.
(b) If in the course of collecting payments under the
Receivables, Servicer determines to set off any obligation of
Servicer
to an Obligor against an amount payable by the Obligor with respect
to
such Receivable, Servicer shall deposit the amount so set off in
the
Collection Account, no later than the close of business on the
Deposit
Date for the Collection Period in which the set-off occurs. All
references herein to payments or Liquidation Proceeds collected
by
Servicer shall include amounts set-off by Servicer.
Section 3.3 Realization upon Receivables. On behalf of the
Trust,
Servicer shall charge off a Receivable as a Defaulted Receivable in
accordance
with its customary standards (and, in no event later than ___ days
after a
Receivable shall have become delinquent) and shall use reasonable
efforts to
repossess and liquidate the Financed Vehicle securing any Defaulted
Receivable
as soon as feasible after default, in accordance with the standard
of care
required by Section 3.1. In taking such action, Servicer shall
follow such
customary and usual practices and procedures as it shall deem
necessary or
advisable in its servicing of Motor Vehicle Loans, and as are
otherwise
consistent with the standard of care required under Section 3.1,
which shall
include exercising any rights under the Dealer Agreements and
selling the
Financed Vehicle at public or private sale. Servicer shall be
entitled to
recover all reasonable expenses incurred by it in the course of
repossessing and
liquidating a Financed Vehicle into cash proceeds or pursuing any
deficiency
claim against the related Obligor, but only out of the cash
proceeds of such
Financed Vehicle or any deficiency obtained from the Obligor. The
foregoing
shall be subject to the provision that, in any case in which a
Financed Vehicle
shall have suffered damage, Servicer shall not expend funds in
connection with
the repair or the repossession of such Financed Vehicle unless it
shall
determine in its discretion that such repair and/or
repossession
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will increase the Liquidation Proceeds of the related Receivable by
an amount
equal to or greater than the amount of such expenses.
If Servicer elects to commence a legal proceeding to enforce a
Dealer
Agreement, the act of commencement shall be deemed to be an
automatic assignment
from Trustee to Servicer of the rights under such Dealer Agreement.
If, however,
in any enforcement suit or legal proceeding, it is held that
Servicer may not
enforce a Dealer Agreement on the grounds that it is not a real
party in
interest or a Person entitled to enforce the Dealer Agreement,
Trustee, on
behalf of the Trust, at Servicer's expense, shall take such steps
as Servicer
deems necessary to enforce the Dealer Agreement, including bringing
suit in its
name or the names of the Holders.
Section 3.4 Physical Damage Insurance. (a) The Receivables
require
that each Financed Vehicle be insured under a Physical Damage
Insurance Policy.
Servicer shall monitor or cause to be monitored, the status of such
physical
damage insurance coverage to the extent consistent with its
customary servicing
procedures. If Servicer shall determine that an Obligor has failed
to obtain or
maintain a Physical Damage Insurance Policy covering the related
Financed
Vehicle, Servicer shall use its reasonable efforts to enforce the
rights of the
holder of the Receivable under the Receivable to require the
Obligor to obtain
such physical damage insurance, provided that Servicer shall not be
required to
take such actions if there is in place a lender's single interest
policy with
respect to the related Financed Vehicle that complies with
Servicer's customary
requirements. It is understood that Servicer will not "force-place"
any Physical
Damage Insurance Policy on any Financed Vehicle.
(b) Servicer may sue to enforce or collect upon the Physical
Damage Insurance Policies, in its own name, if possible, or as
agent
for the Trust. If Servicer elects to commence a legal proceeding
to
enforce a Physical Damage Insurance Policy, the act of
commencement
shall be deemed to be an automatic assignment of the rights of
the
Trust under such Physical Damage Insurance Policy to Servicer
for
purposes of collection only. If, however, in any enforcement suit
or
legal proceeding it is held that Servicer may not enforce a
Physical
Damage Insurance Policy on the grounds that it is not a real party
in
interest or a holder entitled to enforce the Physical Damage
Insurance
Policy, Trustee, on behalf of the Trust, at Servicer's expense,
shall
take such steps as Servicer deems necessary to enforce such
Physical
Damage Insurance Policy, including bringing suit in its name or
the
name of Trustee for the benefit of the Holders. Servicer shall
make
all claims and enforce its rights under any lender's single
interest
insurance policy (to the extent such claims or rights relate to
Receivables) for the benefit of the Trust and shall treat as
Collections all related proceeds of such policies.
Section 3.5 Maintenance of Security Interests in Financed
Vehicles.
Servicer, in accordance with the standard of care required under
Section 3.1,
shall take such reasonable 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. Trustee, on behalf of the Trust,
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hereby authorizes Servicer, and Servicer hereby agrees, to take
such reasonable
steps as are necessary to re-perfect such security interest on
behalf of the
Trust in the event Servicer receives notice of the relocation of a
Financed
Vehicle. If there has been a Servicer Termination Event, upon the
request of
Trustee, Servicer, at its expense, shall promptly and duly execute
and deliver
such documents and instruments, and take such other reasonable
actions as may be
necessary, as evidenced by an Opinion of Counsel delivered to
Trustee 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
Trustee, its agent,
or its designee, the endorsement and delivery of the Physical
Damage Insurance
Policies or the notification of the insurers thereunder, the
execution of
transfer instruments, and the endorsement to 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 Servicer. Servicer makes the following
covenants on which Trustee relies in accepting the Trust Property
in trust and
in executing and authenticating the Certificates:
(a) Security Interest to Remain in Force. Servicer shall not
release any Financed Vehicle from the security interest granted by
the
related Receivable in whole or in part, except upon payment in full
of
the Receivable or as otherwise contemplated herein.
(b) No Impairment. Servicer shall not impair in any material
respect the rights of the Holders in the Receivables, the
Dealer
Agreements or the Physical Damage Insurance Policies or, subject
to
clause (c), otherwise amend or alter the terms thereof if, as a
result
of such amendment or alteration, the interests of the Trust and
the
Holders hereunder would be materially adversely affected.
(c) Amendments. Servicer shall not amend or otherwise modify
any
Receivable (including the grant of any extension thereunder),
except
in accordance with Section 3.2.
Section 3.7 Purchase by Servicer upon Breach. Seller, Servicer
or
Trustee, as the case may be, shall inform the other parties
promptly, in
writing, upon the discovery of any breach by Servicer of its
covenants under
Section 3.5 or 3.6; provided that the failure to give such notice
shall not
affect any obligation of Servicer. Unless the breach shall have
been cured by
the last day of the Collection Period which includes the 60th day
(or the 30th
day, if Servicer so elects) after the date on which Servicer
becomes aware of,
or receives written notice of, such breach, and such breach or
failure
materially and adversely affects the interests of Trustee and the
Holders in any
Receivable, Servicer shall purchase such Receivable from Trustee as
of the last
day of the Collection Period at a purchase price equal to the
Purchase Amount
for such Receivable as of the last day of such Collection Period;
provided that
in the case of a breach of the covenant contained in Section
3.6(c), Servicer
shall be obligated to purchase the affected
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Receivable or Receivables on the Deposit Date immediately
succeeding the
Collection Period during which Servicer becomes aware of, or
receives written
notice of, such breach. In consideration of the purchase of a
Receivable
hereunder, Servicer shall remit the Purchase Amount of such
Receivable in the
manner specified in Section 5.4. The sole remedy of the Trust,
Trustee or the
Holders against Servicer with respect to a breach pursuant to
Section 3.5 or 3.6
shall be to require Servicer to repurchase Receivables pursuant to
this Section.
Section 3.8 Servicing Compensation. The servicing fee for (a)
the
_____ 200_ Distribution Date shall equal $________ and (b) for each
Distribution
Date thereafter shall equal the product of (i) one-twelfth, (ii)
the Servicing
Fee Rate and (iii) the Pool Balance as of the opening of business
on the first
day of the related Collection Period (the "Servicing Fee").
Servicer shall also
be entitled to retain any late fees, extension fees, prepayment
charges
(including, in the case of any Rule of 78's Receivable or Sum of
Periodic
Balances Receivable that is prepaid in full, amounts received in
excess of the
outstanding Principal Balance of such Receivable and accrued
interest thereon
calculated as if such Receivable were an Actuarial Receivable) and
certain
non-sufficient funds charges and other administrative fees or
similar charges
allowed by applicable law with respect to Receivables collected
(from whatever
source) on the Receivables and shall be paid any interest earned on
deposits in
the Accounts (the "Supplemental Servicing Fee"). It is understood
and agreed
that Available Interest or Available Principal shall not include
any amounts
retained by Servicer which constitute Supplemental Servicing Fees.
The Servicing
Fee in respect of a Collection Period (together with any portion of
the
Servicing Fee that remains unpaid from prior Distribution Dates),
if the Rating
Agency Condition is satisfied, may be paid at the beginning of such
Collection
Period out of Collections for such Collection Period. As provided
in Section
4.5, as additional compensation, Servicer shall be entitled to
receive on each
Distribution Date, any Additional Servicing for such Distribution
Date.
Section 3.9 Servicer's Report. (a) On each Determination Date,
Servicer shall deliver to Trustee, each Paying Agent and Seller,
with a copy to
the Rating Agencies, a Servicer's Report substantially in the form
of Exhibit C
(a "Servicer's Report") containing, among other things, (i) all
information
necessary to make the deposits, transfers and distributions
required by Sections
4.4, 4.5 and 4.6, (ii) all information necessary for sending
statements to
Holders pursuant to Section 4.7, (iii) all information necessary to
prepare the
certificate described in Section 9.3, (iv) all information nece
