Exhibit 10.1
EXECUTION COPY
===============================================================================
SALE AND SERVICING AGREEMENT
between
DAIMLERCHRYSLER AUTO TRUST 2005-B
Issuer,
and
DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC,
Seller and Servicer
Dated as of May 1, 2005
===============================================================================
<PAGE>
<TABLE>
<CAPTION>
ARTICLE I
Definitions
<S>
<C>
<C>
Section 1.01
Definitions.................................................................................1
Section 1.02
Other Definitional
Provisions..............................................................13
ARTICLE II
Conveyance of Receivables
Section 2.01
Conveyance of
Receivables..................................................................14
Section 2.02
Conveyance of Fixed Value Payments and Fixed Value Finance
Charges.........................15
Section 2.03
Fixed Value
Securities.....................................................................15
ARTICLE III
The Receivables
Section 3.01
Representations and Warranties of Seller with Respect to the
Receivables...................16
Section 3.02
Repurchase upon
Breach.....................................................................19
Section 3.03
Custody of Receivable
Files................................................................20
Section 3.04
Duties of Servicer as
Custodian............................................................20
Section 3.05
Instructions; Authority To
Act.............................................................21
Section 3.06
Custodian's
Indemnification................................................................21
Section 3.07
Effective Period and
Termination...........................................................21
Section 3.08
Representations and Warranties as to the Security Interest of the
Issuer in the Receivables21
ARTICLE IV
Administration and Servicing of Receivables
Section 4.01
Duties of
Servicer.........................................................................22
Section 4.02
Collection and Allocation of Receivable
Payments...........................................23
Section 4.03
Realization upon
Receivables...............................................................23
Section 4.04
Physical Damage
Insurance..................................................................23
Section 4.05
Maintenance of Security Interests in Financed
Vehicles.....................................24
Section 4.06
Covenants of
Servicer......................................................................24
Section 4.07
Purchase of Receivables upon
Breach........................................................24
Section 4.08
Servicing
Fee..............................................................................24
Section 4.09
Servicer's
Certificate.....................................................................24
Section 4.10
Annual Statement as to Compliance; Notice of
Default.......................................25
Section 4.11
Annual Independent Certified Public Accountants'
Report....................................25
i
<PAGE>
Section 4.12
Access to Certain Documentation and Information Regarding
Receivables......................26
Section 4.13
Servicer
Expenses..........................................................................26
Section 4.14
Appointment of
Subservicer.................................................................26
ARTICLE V
Distributions; Reserve Account; Statements to Certificateholders
and Noteholders
Section 5.01
Establishment of Deposit
Account...........................................................26
Section 5.02
Collections................................................................................28
Section 5.03
Application of
Collections.................................................................29
Section 5.04
Additional
Deposits........................................................................29
Section 5.05
Distributions..............................................................................29
Section 5.06
Reserve
Account............................................................................30
Section 5.07
Statements to Noteholders and
Certificateholders...........................................31
Section 5.08
Net
Deposits...............................................................................32
ARTICLE VI
The Seller
Section 6.01
Representations of
Seller..................................................................32
Section 6.02
Preservation of
Existence..................................................................33
Section 6.03
Liability of Seller;
Indemnities...........................................................34
Section 6.04
Merger or Consolidation of, or Assumption of Obligations of,
Seller........................35
Section 6.05
Limitation on Liability of Seller and
Others...............................................35
Section 6.06
Seller May Own
Notes.......................................................................35
ARTICLE VII
The Servicer
Section 7.01
Representations of
Servicer................................................................36
Section 7.02
Indemnities of
Servicer....................................................................37
Section 7.03
Merger or Consolidation of, or Assumption of Obligations of,
Servicer......................38
Section 7.04
Limitation on Liability of Servicer and
Others.............................................38
Section 7.05
DCS Not To Resign as
Servicer..............................................................39
ARTICLE VIII
Default
Section 8.01
Servicer
Default...........................................................................39
Section 8.02
Appointment of
Successor...................................................................40
Section 8.03
Notification to Noteholders and
Certificateholders.........................................41
ii
<PAGE>
Section 8.04
Waiver of Past
Defaults....................................................................41
ARTICLE IX
Termination
Section 9.01
Optional Purchase of All
Receivables.......................................................41
ARTICLE X
Miscellaneous
Section 10.01
Amendment..................................................................................42
Section 10.02
Protection of Title to
Trust...............................................................43
Section 10.03
Notices....................................................................................45
Section 10.04
Assignment by the Seller or the
Servicer...................................................45
Section 10.05
Limitations on Rights of
Others............................................................45
Section 10.06
Severability...............................................................................46
Section 10.07
Separate
Counterparts......................................................................46
Section 10.08
Headings...................................................................................46
Section 10.09
Governing
Law..............................................................................46
Section 10.10
Assignment by
Issuer.......................................................................46
Section 10.11
Nonpetition
Covenants......................................................................46
Section 10.12
Limitation of Liability of Owner Trustee and Indenture
Trustee.............................47
SCHEDULE A
Schedule of Receivables
SCHEDULE B
Location of Receivable Files
SCHEDULE C
Schedule of YSOA
EXHIBIT A
Form of Distribution Statement to
Noteholders........................................A-1
EXHIBIT B
Form of Servicer's
Certificate.......................................................B-1
</TABLE>
iii
<PAGE>
SALE AND SERVICING AGREEMENT dated as of May 1, 2005, between
DAIMLERCHRYSLER AUTO TRUST 2005-B, a Delaware statutory trust
(the
"Issuer"), and DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC, a
Michigan
limited liability company, as seller and servicer.
WHEREAS the Issuer desires to purchase a portfolio of
receivables
arising in connection with automobile
retail installment sale contracts
generated by DaimlerChrysler Services North
America LLC in the ordinary course
of business; and
WHEREAS DaimlerChrysler Services North America LLC is willing to
sell
such receivables to, and to service such
receivables on behalf of, the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties
hereto agree as follows:
ARTICLE I
Definitions
-----------
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the
context otherwise requires, shall have
the following meanings:
"Amortizing Payment" means, with respect to each Fixed Value
Receivable and each Collection Period prior
to the date on which the Fixed
Value Payment relating to such Receivable
is due, the amount specified in the
applicable Contract in the payment schedule
as the "Amount of Each Payment",
except that in the case of a prepayment,
liquidation or repurchase by the
Seller or purchase by the Servicer, the
Amortizing Payment shall be equal to
the aggregate "Amount of Each Payment" that
has not yet been paid for the
period through and including the last
payment prior to the date when the Fixed
Value Payment is due less the amount of the
unearned finance charges under the
related Contract allocable to such amount
in accordance with the Servicer's
customary procedures.
"Amortizing Payment Finance Charge" means, with respect to each
payment collected on a Fixed Value
Receivable, the finance charge included in
such payment (as determined in accordance
with the Servicer's customary
procedures) that is allocable to the
related Principal Balance.
"Amount Financed" means (i) with respect to a Standard
Receivable,
the amount advanced under such Standard
Receivable toward the purchase price
of the Financed Vehicle and any related
costs and (ii) with respect to a Fixed
Value Receivable, an amount equal to the
present value of the fixed level
payment monthly installments (not including
the amount designated as the Fixed
Value Payment) under such Fixed Value
Receivable, assuming that each payment
is made on the due date in the month in
which such payment is due, discounted
at the APR for such Fixed Value
Receivable.
"Annual Percentage Rate" or "APR" of a Receivable means the
annual
rate of finance charges stated in the
related Contract.
<PAGE>
"Basic Documents" means the Indenture, the Trust Agreement, the
Administration Agreement and the Purchase
Agreement.
"Certificateholders" has the meaning assigned to such term in
the
Trust Agreement.
"Certificates" has the meaning assigned to such term in the
Trust
Agreement.
"Class" means any one of the classes of Notes.
"Class A-1 Final Scheduled Payment Date" means May 8, 2006.
"Class A-1 Noteholder" means the Person in whose name a Class
A-1
Note is registered in the Note
Register.
"Class A-2 Final Scheduled Payment Date" means December 10,
2007.
"Class A-2 Noteholder" means the Person in whose name a Class
A-2
Note is registered in the Note
Register.
"Class A-3 Final Scheduled Payment Date" means September 8,
2009.
"Class A-3 Noteholder" means the Person in whose name a Class
A-3
Note is registered in the Note
Register.
"Class A-4 Final Scheduled Payment Date" means July 8, 2010.
"Class A-4 Noteholder" means the Person in whose name a Class
A-4
Note is registered in the Note
Register.
"Class B Final Scheduled Payment Date" means October 11, 2011.
"Class B Noteholder" means the Person in whose name a Class B Note
is
registered in the Note Register.
"Collection Period" means a calendar month (or in the case of
the
first Collection Period, the period from
but excluding May 2, 2005 to and
including May 31, 2005). The "related
Collection Period" for a Payment Date is
the Collection Period ending immediately
prior to such Payment Date. Unless
otherwise specified, any amount stated as
of the last day of a Collection
Period or as of the first day of a
Collection Period shall give effect to the
following calculations as determined as of
the close of business on such last
day: (1) all applications of collections
and (2) all distributions to be made
on the related Payment Date.
"Company" means DaimlerChrysler Retail Receivables LLC, a
Michigan
limited liability company, and any
successor in interest or, if the Rights (as
defined in the Purchase Agreement) have
been assigned to a Person that becomes
a transferee in accordance with Section
5.05 of the Purchase Agreement, such
transferee Person and any successor in
interest.
"Contract" means a motor vehicle retail installment sale
contract.
2
<PAGE>
"Corporate Trust Office" means the principal office of the
Indenture
Trustee at which at any particular time its
corporate trust business shall be
administered, which office at the date of
the execution of this Agreement is
located at 388 Greenwich Street, 14th
Floor, New York, New York 10013,
Attention: Structured Finance Agency and
Trust, DCAT 2005-B; or at such other
address as the Indenture Trustee may
designate from time to time by notice to
the Noteholders and the Seller, or the
principal corporate trust office of any
successor Indenture Trustee (of which
address such successor Indenture Trustee
will notify the Noteholders and the
Seller).
"Cutoff Date" means May 2, 2005.
"DCS" means DaimlerChrysler Services North America LLC, a
Michigan
limited liability company, or its
successors.
"Dealer" means the dealer who sold a Financed Vehicle and who
originated and assigned the related
Receivable to DCS under an existing
agreement between such dealer and DCS.
"Delivery" when used with respect to Trust Account Property
means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute
"instruments" within the meaning of Section 9-102(a)(47)
of the UCC and are susceptible of physical delivery, transfer
thereof
to the Indenture Trustee or its nominee or custodian by
physical
delivery to the Indenture Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Indenture Trustee
or
its nominee or custodian or endorsed in blank, and, with respect to
a
certificated security (as defined in Section 8-102 of the UCC)
transfer thereof (i) by delivery of such certificated security
endorsed to, or registered in the name of, the Indenture Trustee
or
its nominee or custodian or endorsed in blank to a securities
intermediary (as defined in Section 8-102 of the UCC) and the
making
by such securities intermediary of entries on its books and
records
identifying such certificated securities (as defined in Section
8-102
of the UCC) of the Indenture Trustee or its nominee or custodian
or
(ii) by delivery thereof to a "clearing corporation" (as defined
in
Section 8-102 of the UCC) and the making by such clearing
corporation
of appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the
appropriate
securities account of a securities intermediary by the amount of
such
certificated security, the identification by the clearing
corporation
on its books and records that the certificated securities are
credited to the sole and exclusive securities account of the
securities intermediary, the maintenance of such certificated
securities by such clearing corporation or a custodian or the
nominee
of such clearing corporation subject to the clearing
corporation's
exclusive control, and the making by such securities intermediary
of
entries on its books and records identifying such certificated
securities as being credited to the securities account of the
Indenture Trustee or its nominee or custodian (all of the
foregoing,
"Physical Property"), and, in any event, any such Physical
Property
in registered form shall be in the name of the Indenture Trustee
or
its nominee or custodian; and such additional or alternative
procedures as may hereafter become appropriate to effect the
complete
transfer of ownership of any such Trust Account Property (as
defined
herein) to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the
interpretation thereof;
3
<PAGE>
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the
Federal National Mortgage Association that are book-entry
securities
held through the Federal Reserve System pursuant to Federal
book-entry regulations, the following procedures, all in
accordance
with applicable law, including applicable Federal regulations
and
Articles 8 and 9 of the UCC: book-entry registration of such
Trust
Account Property to an appropriate book-entry account maintained
with
a Federal Reserve Bank by a securities intermediary which is also
a
"depository" pursuant to applicable Federal regulations; the
identification by the Federal Reserve Bank of such book-entry
securities on its record being credited to the securities
intermediary's securities account; the making by such
securities
intermediary of entries in its books and records identifying
such
book-entry security held through the Federal Reserve System
pursuant
to Federal book-entry regulations as being credited to the
Indenture
Trustee's securities account; and such additional or
alternative
procedures as may hereafter become appropriate to effect
complete
transfer of ownership of any such Trust Account Property to the
Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation
thereof; and
(c) with respect to any item of Trust Account Property that
is an uncertificated security under Article 8 of the UCC and that
is
not governed by clause (a) above, registration on the books and
records of the issuer thereof in the name of the securities
intermediary, the sending of a confirmation by the securities
intermediary of the purchase by the Indenture Trustee or its
nominee
or custodian of such uncertificated security, the making by
such
securities intermediary of entries on its books and records
identifying such uncertificated certificates as belonging to
the
Indenture Trustee or its nominee or custodian.
"Deposit Account" means the account designated as such,
established
and maintained pursuant to Section
5.01(a)(i).
"Eligible Deposit Account" means either (a) a segregated account
with
an Eligible Institution or (b) a segregated
trust account with the corporate
trust department of a depository
institution organized under the laws of the
United States of America or any one of the
states thereof or the District of
Columbia (or any domestic branch of a
foreign bank), having corporate trust
powers and acting as trustee for funds
deposited in such account, so long as
any of the securities of such depository
institution shall have a credit
rating from each Rating Agency in one of
its generic rating categories that
signifies investment grade.
"Eligible Institution" means (a) a depository institution
organized
under the laws of the United States of
America or any one of the states
thereof or the District of Columbia (or any
domestic branch of a foreign
bank), which (i) has either (A) a long-term
unsecured debt rating of "AAA" or
better by Standard & Poor's and "A1" or
better by Moody's or (B) a certificate
of deposit rating of "A-1+" by Standard
& Poor's and "P-1" or better by
Moody's, or any other long-term, short-term
or certificate of deposit rating
acceptable to the Rating Agencies and (ii)
whose deposits are insured by the
FDIC or (b) the corporate trust department
of the Indenture Trustee or the
Owner Trustee. If so qualified, the
Indenture Trustee or the Owner Trustee may
be considered an Eligible Institution for
the purposes of clause (a) of this
definition.
4
<PAGE>
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by
instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed
as to the full and timely payment by, the United States of
America;
(b) demand deposits, time deposits or certificates of
deposit of any depository institution or trust company
incorporated
under the laws of the United States of America or any state
thereof
(or any domestic branch of a foreign bank) and subject to
supervision
and examination by Federal or State banking or depository
institution
authorities; provided, however, that at the time of the investment
or
contractual commitment to invest therein, the commercial paper
or
other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a
Person
other than such depository institution or trust company)
thereof
shall have a credit rating from each of the Rating Agencies in
the
highest applicable rating category granted thereby;
(c) commercial paper, variable amount notes or other short
term debt obligations having, at the time of the investment or
contractual commitment to invest therein, a rating from each of
the
Rating Agencies in the highest applicable rating category
granted
thereby;
(d) investments in money market or common trust funds having
a rating from each of the Rating Agencies in the highest
applicable
rating category granted thereby (including funds for which the
Indenture Trustee or the Owner Trustee or any of their
respective
Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository
institution or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United
States
of America or any agency or instrumentality thereof the
obligations
of which are backed by the full faith and credit of the United
States
of America, in either case entered into with a depository
institution
or trust company (acting as principal) described in clause (b);
(g) repurchase obligations with respect to any security or
whole loan, entered into with (i) a depository institution or
trust
company (acting as principal) described in clause (b) above
(except
that the rating referred to in the proviso in such clause (b)
shall
be "A-1" or higher in the case of Standard & Poor's) (such
depository
institution or trust company being referred to in this definition
as
a "financial
institution"), (ii) a broker/dealer (acting as
principal) registered as a broker or dealer under Section 15 of
the
Exchange Act (a "broker/dealer") the unsecured short-term debt
obligations of which are rated "P-1" by Moody's and at least "A-1"
by
Standard & Poor's at the time of entering into such
repurchase
obligation (a "rated broker/dealer"), (iii) an unrated
broker/dealer
(an "unrated broker/dealer"), acting as principal, that is a
wholly-owned subsidiary of a non-bank holding company the
unsecured
short-term debt obligations of which are rated "P-1" by Moody's
and
at least "A-1" by Standard & Poor's at the time of entering
into
5
<PAGE>
such repurchase obligation (a "Rated Holding Company") or (iv)
an
unrated subsidiary (a "Guaranteed Counterparty"), acting as
principal, that is a wholly-owned subsidiary of a direct or
indirect
parent Rated Holding Company, which guarantees such
subsidiary's
obligations under such repurchase agreement; provided that the
following conditions are satisfied:
(A) the aggregate amount of funds invested in
repurchase obligations of a financial institution, a rated
broker/dealer, an unrated broker/dealer or Guaranteed
Counterparty in respect of which the Standard & Poor's
unsecured short-term ratings are "A-1" (in the case of an
unrated broker/dealer or Guaranteed Counterparty, such
rating being that of the related Rated Holding Company)
shall not exceed 20% of the sum of the then outstanding
principal amount of the Notes (there being no limit on the
amount of funds that may be invested in repurchase
obligations in respect of which such Standard & Poor's
rating is "A-1+" (in the case of an unrated broker/dealer or
Guaranteed Counterparty, such rating being that of the
related Rated Holding Company));
(B) in the case of the amount allocated to the
Reserve
Account, the rating from Standard & Poor's in
respect of the unsecured short-term debt obligations of the
financial institution, rated broker/dealer, unrated
broker/dealer or Guaranteed Counterparty (in the case of an
unrated broker/dealer or Guaranteed Counterparty, such
rating being that of the related Rated Holding Company)
shall be "A-1+";
(C) the repurchase obligation must mature within 30
days of the date on which the Indenture Trustee or the
Issuer, as applicable, enters into such repurchase
obligation;
(D) the repurchase obligation shall not be
subordinated to any other obligation of the related
financial institution, rated broker/dealer, unrated
broker/dealer or Guaranteed Counterparty;
(E) the collateral subject to the repurchase
obligation is held, in the appropriate form, by a custodial
bank on behalf of the Indenture Trustee or the Issuer, as
applicable;
(F) the repurchase obligation shall require that
the collateral subject thereto shall be marked to market
daily;
(G) in the case of a repurchase obligation of a
Guaranteed Counterparty, the following conditions shall also
be satisfied:
(i) the Indenture Trustee or the
Issuer, as applicable, shall have received an
opinion of counsel (which may be in-house counsel)
to the effect that the guarantee of the related
Rated Holding Company is a legal, valid and binding
agreement of the Rated Holding Company, enforceable
in accordance with its terms, subject as to
enforceability to bankruptcy, insolvency,
reorganization and moratorium or other similar
6
<PAGE>
laws affecting creditors' rights generally and to
general equitable principles;
(ii) the Indenture Trustee or the
Issuer, as applicable, shall have received (x) an
incumbency certificate for the signer of such
guarantee, certified by an officer of such Rated
Holding Company and (y) a resolution, certified by
an officer of the Rated Holding Company, of the
board of directors (or applicable committee
thereof) of the Rated Holding Company authorizing
the execution, delivery and performance of such
guarantee by the Rated Holding Company;
(iii) the only conditions to the
obligation of such Rated Holding Company to pay on
behalf of the Guaranteed Counterparty shall be that
the Guaranteed Counterparty shall not have paid
under such repurchase obligation when required (it
being understood that no notice to, demand on or
other action in respect of the Guaranteed
Counterparty is necessary) and that the Indenture
Trustee or the Issuer shall make a demand on the
Rated Holding Company to make the payment due under
such guarantee;
(iv) the guarantee of the Rated
Holding Company shall be irrevocable with respect
to such repurchase obligation and shall not be
subordinated to any other obligation of the Rated
Holding Company; and
(v) each of Standard & Poor's and
Moody's has confirmed in writing to the Indenture
Trustee or Issuer, as applicable, that it has
reviewed the form of the guarantee of the Rated
Holding Company and has determined that the
issuance of such guarantee will not result in the
downgrade or withdrawal of the ratings assigned to
the Notes; and
(H) the repurchase obligation shall require that
the repurchase obligation be overcollateralized and shall
provide
that, upon any failure to maintain such
overcollateralization, the repurchase obligation shall
become due and payable, and unless the repurchase obligation
is satisfied immediately, the collateral subject to the
repurchase agreement shall be liquidated and the proceeds
applied to satisfy the unsatisfied portion of the repurchase
obligation; or
(h) any other investment with respect to which the Issuer or
the Servicer has received written notification from the Rating
Agencies that the acquisition of such investment as an Eligible
Investment will not result in a withdrawal or downgrading of
the
ratings
assigned to the Notes.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Maturity Date" means October 11, 2011.
7
<PAGE>
"Financed Vehicle" means an automobile or light-duty truck,
together
with all accessions thereto, securing an
Obligor's indebtedness under the
respective Standard Receivable or Fixed
Value Receivable.
"Fitch" means Fitch, Inc., or its successor.
"Fixed Value Finance Charge" means, with respect to each
payment
collected on a Fixed Value Receivable, the
finance charge included in such
payment (as determined in accordance with
the Servicer's customary procedures)
that is allocable to the related Fixed
Value Payment.
"Fixed Value Payment" means, with respect to each Fixed Value
Receivable, the amount specified on the
applicable Contract as the "Amount of
Fixed Value Payment" reduced (i) in the
case of a prepayment or repurchase, by
the amount of the unearned finance charges
under the Contract allocable to
such payment in accordance with the
Servicer's customary procedures and (ii)
in the case of a liquidation, by the excess
of Liquidation Proceeds collected
by the Servicer over the Amortizing Payment
on such date.
"Fixed Value Receivable" means any Contract listed on Schedule
A
(which Schedule may be in the form of
microfiche) that provides for
amortization of the loan over a series of
fixed level payment monthly
installments in accordance with the simple
interest method, but also requires
a final payment that is greater than the
scheduled monthly payments and is due
after payment of such scheduled monthly
payments and that may be made by (i)
payment in full in cash of a fixed value
amount, (ii) return of the Financed
Vehicle to the Servicer provided certain
conditions are satisfied or (iii)
refinancing the final fixed value payment
in accordance with specified
conditions. No Fixed Value Receivables will
be transferred to the Trust.
"Fixed Value Securities" has the meaning assigned to such term
in
Section 2.03.
"Indenture" means the Indenture dated as of May 1, 2005, between
the
Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture
Trustee
under the Indenture, its successors in
interest and any successor trustee
under the Indenture.
"Initial Overcollateralization Amount" means $35,040,900.84.
"Insolvency Event" means, with respect to a specified Person, (a)
the
filing of a decree or order for relief by a
court having jurisdiction in the
premises in respect of such Person or any
substantial part of its property in
an involuntary case under any applicable
federal or state bankruptcy,
insolvency or other similar law now or
hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar
official for such Person or for any
substantial part of its property, or
ordering the winding-up or liquidation of
such Person's affairs, and such
decree or order shall remain unstayed and
in effect for a period of 60
consecutive days; or (b) the commencement
by such Person of a voluntary case
under any applicable federal or state
bankruptcy, insolvency or other similar
law now or hereafter in effect, or the
consent by such Person to the entry of
an order for relief in an involuntary case
under any such law, or the consent
by such Person to the appointment of or
taking possession by a receiver,
liquidator, assignee, custodian, trustee,
sequestrator or similar official for
such Person or for any substantial
8
<PAGE>
part of its property, or the making by such
Person of any general assignment
for the benefit of creditors, or the
failure by such Person generally to pay
its debts as such debts become due, or the
taking of action by such Person in
furtherance of any of the foregoing.
"Investment Earnings" means, with respect to any Payment Date,
the
investment earnings (net of losses and
investment expenses), if any, on
amounts on deposit in the Deposit Account
to be applied on such Payment Date
pursuant to Section 5.01(b).
"Issuer" means DaimlerChrysler Auto Trust 2005-B.
"Lien" means a security interest, lien, charge, pledge, equity
or
encumbrance of any kind, other than tax
liens, mechanics' liens and any liens
that attach to the respective Receivable by
operation of law as a result of
any act or omission by the related
Obligor.
"Liquidated Receivable" means any Receivable liquidated by the
Servicer through the sale of a Financed
Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the moneys collected in respect
thereof, from whatever source on a
Liquidated Receivable during the Collection
Period in which such Receivable
became a Liquidated Receivable, net of the
sum of any amounts expended by the
Servicer in connection with such
liquidation and any amounts required by law
to be remitted to the Obligor on such
Liquidated Receivable.
"Moody's" means Moody's Investors Service, Inc., or its
successor.
"Note Principal Distribution Account" means the subaccount that
is
part of the Deposit Account and is
designated as such, established and
maintained pursuant to Section 5.01.
"Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes,
Class A-4 Notes and Class B Notes.
"Obligor" on a Receivable means the purchaser or co-purchasers of
the
Financed Vehicle and any other Person who
owes payments under the Receivable.
"Officer's Certificate" means a certificate signed by the chairman
of
the board, any vice president, the
controller or any assistant controller, the
president, a treasurer, assistant
treasurer, secretary or assistant secretary
of the Seller, the Company or the Servicer,
as appropriate.
"OMSC Receivable" means any Standard Receivable acquired by DCS
from
the Overseas Military Sales Corporation, or
its successor.
"Opinion of Counsel" means one or more written opinions of
counsel,
who may be an employee of or counsel to the
Seller, the Company or the
Servicer, which counsel shall be acceptable
to the Indenture Trustee, the
Owner Trustee or the Rating Agencies, as
applicable.
"Original Pool Balance" means $2,137,500,207.96.
9
<PAGE>
"Overcollateralization Amount" means, with respect to any
Payment
Date, (i) the Related Pool Balance minus
(ii) the Securities Amount minus
(iii) the YSOA.
"Owner Trust Estate" has the meaning assigned to such term in
the
Trust Agreement.
"Owner Trustee" means the Person acting as Owner Trustee under
the
Trust Agreement, its successors in interest
and any successor owner trustee
under the Trust Agreement.
"Payment Date" means, with respect to each Collection Period,
the
eighth day of the following month or, if
such day is not a Business Day, the
immediately following Business Day,
commencing on June 8, 2005.
"Payment Determination Date" means, with respect to any Payment
Date,
the Business Day immediately preceding such
Payment Date.
"Physical Property" has the meaning assigned to such term in
the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day
of
a Collection Period, the aggregate
Principal Balance of the Receivables as of
such day (excluding Purchased Receivables
and Liquidated Receivables).
"Principal Balance" of a Receivable, as of the close of business
on
any date of determination, means the Amount
Financed minus the sum of (i) the
portion of all payments made by or on
behalf of the related Obligor on or
prior to such day and allocable to
principal using the Simple Interest Method
and (ii) the principal portion of the
Purchase Amount paid with respect to the
Receivable.
"Priority Principal Distribution Amount" means, with respect to
a
Payment Date, the excess, if any, of (i)
the Outstanding Amount of the Class A
Notes immediately prior to such Payment
Date over (ii) (a) the Related Pool
Balance minus (b) the YSOA for such Payment
Date.
"Purchase Agreement" means the Purchase Agreement dated as of May
1,
2005, between the Seller and the
Company.
"Purchase Amount" means the amount, as of the close of business
on
the last day of a Collection Period,
required to prepay in full a Receivable
under the terms thereof including interest
to the end of the month of
purchase.
"Purchased Receivable" means a Receivable purchased as of the
close
of business on the last day of a Collection
Period by the Servicer pursuant to
Section 4.07 or by the Seller pursuant to
Section 3.02.
"Rating Agency" means Moody's and Standard & Poor's or, if no
such
organization or successor is any longer in
existence, a nationally recognized
statistical rating organization or other
comparable Person designated by the
Seller, notice of which designation shall
be given to the Indenture Trustee,
the Owner Trustee and the Servicer. Any
notice required to be given to a
10
<PAGE>
Rating Agency pursuant to this Agreement
shall also be given to Fitch,
although Fitch shall not be deemed to be a
Rating Agency for any purposes of
this Agreement.
"Rating Agency Condition" means, with respect to any action,
that
each Rating Agency shall have been given 10
days' (or such shorter period as
shall be acceptable to each Rating Agency)
prior notice thereof and that each
of the Rating Agencies shall have notified
the Seller, the Company, the
Servicer, the Owner Trustee and the
Indenture Trustee in writing that such
action will not result in a reduction or
withdrawal of the then current rating
of the Notes.
"Receivable" means (i) any Standard Receivable and (ii) the
Amortizing Payments with respect to any
Fixed Value Receivable.
"Receivable Files" means the documents specified in Section
3.03.
"Related Pool Balance" means, with respect to any Payment Date,
the
Pool Balance as of the end of the related
Collection Period.
"Required Principal Distribution Amount" means, with respect to
a
Payment Date, the greater of (i) the
Outstanding Amount of the Class A-1 Notes
immediately prior to such Payment Date and
(ii) the excess, if any, of (a) the
Outstanding Amount of the Notes immediately
prior to such Payment Date over
(b) (I) the Related Pool Balance for such
Payment Date minus (II) the YSOA for
such Payment Date minus (III) the Target
Overcollateralization Amount for such
Payment Date.
"Reserve Account" means the subaccount that is part of the
Deposit
Account and is designated as such,
established and maintained pursuant to
Section 5.01.
"Reserve Account Initial Deposit" means the initial deposit of
cash
and Eligible Investments in the amount of
$5,005,000.00 made by the Seller
into the Deposit Account on the Closing
Date.
"Securities Amount" means, with respect to any Payment Date, the
sum
of the aggregate Outstanding Amount of the
Notes after giving effect to
payments of principal made on the Notes on
such Payment Date.
"Seller" means DCS and its successors in interest to the extent
permitted hereunder.
"Servicer" means DCS, as the servicer of the Receivables, and
each
successor to DCS (in the same capacity)
pursuant to Section 7.03 or 8.02.
"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" means a certificate of the Servicer
delivered pursuant to Section 4.09,
substantially in the form of Exhibit B.
"Servicing Fee" means the fee payable to the Servicer for
services
rendered during each Collection Period,
determined pursuant to Section 4.08.
11
<PAGE>
"Servicing Fee Rate" means 1/12 of 1.00%.
"Simple Interest Method" means the method of allocating a fixed
level
payment to principal and interest, pursuant
to which the portion of such
payment that is allocated to interest is
equal to the product of the fixed
rate of interest multiplied by the unpaid
principal balance multiplied by a
fraction, the numerator of which is the
number of days elapsed since the
preceding payment of interest was made, the
denominator of which is 365, and
the remainder of such payment is allocable
to principal.
"Simple Interest Receivable" means any Receivable under which
the
portion of a payment allocable to interest
and the portion allocable to
principal is determined in accordance with
the Simple Interest Method.
"Specified Reserve Amount" means, with respect to any Payment
Date,
an amount equal to the Reserve Account
Initial Deposit.
"Standard & Poor's" means Standard & Poor's Ratings
Services, a
division of The McGraw-Hill Companies,
Inc., or its successor.
"Standard
Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche)
that is not a Fixed Value
Receivable.
"Target Overcollateralization Amount" means, with respect to a
Payment Date, the greater of (A) the
product of 5.00% times P and (B) the OC
Floor, where:
P = (a) the Related Pool Balance for such Payment Date minus
(b) the YSOA for such Payment Date
OC Floor = the lesser of (a) P and (b) the product of 1.50% times
P/i/
P/i/ = the Original Pool Balance minus the initial YSOA
"Total Distribution Amount" means, for any Payment Date and the
Collection Period preceding such Payment
Date, the sum of the following
amounts, without duplication: (a) all
collections on Receivables (including
payments relating to refunds of extended
warranty protection plan costs or of
physical damage, credit life or disability
insurance policy premiums, but only
to the extent that such costs or premiums
were financed by the respective
obligor as of the date of the related
Contract), (b) all Liquidation Proceeds
of Receivables that became Liquidated
Receivables in accordance with the
Servicer's customary servicing procedures,
(c) the Purchase Amount of each
Receivable that became a Purchased
Receivable in such Collection Period and
(d) Investment Earnings deposited in the
Deposit Account during such
Collection Period.
"Trust" means the Issuer.
"Trust Account Property" means the Deposit Account, all amounts
and
investments held from time to time in the
Deposit Account (whether in the form
of deposit accounts, Physical
12
<PAGE>
Property, book-entry securities,
uncertificated securities or otherwise),
including the Reserve Account Initial
Deposit, and all proceeds of the
foregoing.
"Trust Agreement" means the Amended and Restated Trust
Agreement
dated as of May 1, 2005, among the Seller,
the Company and the Owner Trustee.
"Trust Officer" means, in the case of the Indenture Trustee,
any
Officer within the Corporate Trust Office
of the Indenture Trustee, including
any Vice President, Assistant Vice
President, Secretary, Assistant Secretary
or any other officer of the Indenture
Trustee customarily performing functions
similar to those performed by any of the
above designated officers and also,
with respect to a particular matter, any
other officer to whom such matter is
referred because of such officer's
knowledge of and familiarity with the
particular subject and, with respect to the
Owner Trustee, any officer or any
agent acting pursuant to a power of
attorney by the Owner Trustee in the
Corporate Trust Administration Department
of the Owner Trustee with direct
responsibility for the administration of
the Trust Agreement and the Basic
Documents on behalf of the Owner
Trustee.
"YSOA" means, with respect to a Payment Date, the dollar amount
set
forth opposite such Payment Date in
Schedule YSOA; provided that the YSOA for
a Payment Date shall not be greater than
the Related Pool Balance for such
Payment Date.
Section 1.02 Other Definitional Provisions. (a) Capitalized
terms
used herein and not otherwise defined
herein shall have the meanings assigned
to them in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or
other document made or delivered
pursuant hereto unless otherwise defined
therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto
or thereto, accounting terms not
defined in this Agreement or in any such
certificate or other document, and
accounting terms partly defined in this
Agreement or in any such certificate
or other document to the extent not
defined, shall have the respective
meanings given to them under generally
accepted accounting principles. To the
extent that the definitions of accounting
terms in this Agreement or in any
such certificate or other document are
inconsistent with the meanings of such
terms under generally accepted accounting
principles, the definitions
contained in this Agreement or in any such
certificate or other document shall
control.
(d) The words "hereof", "herein", "hereunder" and words of
similar
import when used in this Agreement shall
refer to this Agreement as a whole
and not to any particular provision of this
Agreement; Article, Section,
Schedule and Exhibit references contained
in this Agreement are references to
Articles, Sections, Schedules and Exhibits
in or to this Agreement unless
otherwise specified; and the term
"including" and its variants shall be deemed
to be followed by "without limitation".
(e) The definitions contained in this Agreement are applicable to
the
singular as well as the plural forms of
such terms and to the masculine as
well as to the feminine and neuter genders
of such terms.
13
<PAGE>
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate
delivered in connection herewith
means such agreement, instrument or statute
as from time to time amended,
modified or supplemented and includes (in
the case of agreements or
instruments) references to all attachments
thereto and instruments
incorporated therein; references to a
Person are also to its permitted
successors and assigns.
(g) For all purposes of this Agreement and the Basic Documents,
interest with respect to all Classes of
Notes other than the Class A-1 Notes
shall be computed on the basis of a 360-day
year consisting of twelve 30-day
months; and interest with respect to the
Class A-1 Notes shall be computed on
the basis of the actual number of days in
each applicable Class A-1 Interest
Accrual Period divided by 360.
ARTICLE II
Conveyance of Receivables
-------------------------
Section 2.01 Conveyance of Receivables. In consideration of the
Issuer's delivery to or upon the order of
the Seller of $1,591,817,286 (which
amount represents the Original Pool Balance
less (i) the Reserve Account
Initial Deposit, (ii) the Initial
Overcollateralization Amount, (iii) the
initial YSOA, (iv) the Class A-1 Principal
Balance and (v) certain other
discounts and expenses of the Issuer), the
Seller does hereby sell, transfer,
assign, set over and otherwise convey to
the Issuer, without recourse (subject
to the obligations of the Seller set forth
herein), all right, title and
interest of the Seller in and to:
(a) the Receivables and all moneys received thereon after May
2, 2005;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of
the
Seller in such Financed Vehicles;
(c) any proceeds with respect to the Receivables from claims on
any physical damage, credit life or disability insurance
policies
covering Financed Vehicles or Obligors;
(d) any proceeds from recourse to Dealers with respect to
Receivables with respect to which the Servicer has determined
in
accordance with its customary servicing procedures that
eventual
payment in full is unlikely;
(e) any Financed Vehicle that shall have secured a Receivable
and shall have been acquired by or on behalf of the Seller, the
Servicer, the Company or the Trust;
(f) all funds on deposit from time to time in the Deposit
Account (including without limitation any subaccount thereof),
including the Reserve Account Initial Deposit, and in all
investments
and proceeds thereof (including all income thereon); and
(g) the proceeds of any and all of the foregoing.
14
<PAGE>
The Seller hereby directs the Issuer to issue the Certificates
to the Company. The Seller and the Issuer acknowledge that
$402,000,000.00 of the purchase price of the Receivables owed by
the
Issuer to the Seller pursuant to this Section 2.01 (which amount
is
not included in the first sentence of Section 2.01) shall be
offset
by the Issuer against delivery of the Class A-1 Notes to the order
of
the Seller.
Section 2.02 Conveyance of Fixed Value Payments and Fixed Value
Finance Charges. Promptly following the
transfer to the Issuer of the
Receivables on the Closing Date, the Issuer
shall, without further action
hereunder, be deemed to sell, transfer,
assign, set over and otherwise convey
to the Seller, effective as of the Closing
Date, without recourse,
representation or warranty, all the right,
title and interest of the Issuer in
and to the Fixed Value Payments and the
Fixed Value Finance Charges, if any,
all monies due and to become due and all
amounts received with respect thereto
and all proceeds thereof, subject to
Section 5.03(b).
Section 2.03 Fixed Value Securities. (a) At any time after the
Closing Date, at the option of the Seller
and upon 10 days prior notice to the
Owner Trustee and the Indenture Trustee,
the Seller will be permitted to sell
to the Issuer, and the Issuer shall be
obligated to purchase from the Seller
(subject to the availability of funds), all
or any portion of the Fixed Value
Payments and/or Fixed Value Finance
Charges, if any, subject to the terms and
conditions described below. Upon any such
sale, (x) the Seller and the Owner
Trustee will enter into an amendment to
this Agreement and the Basic Documents
to provide for, at the election of the
Seller, the issuance of certificates
representing ownership interests in the
Trust to the extent of such Fixed
Value Payments and/or Fixed Value Finance
Charges or the issuance of
indebtedness by the Issuer secured by such
Fixed Value Payments (collectively,
the "Fixed Value Securities") and to make
any other provisions herein or
therein that are necessary or desirable in
connection therewith and (y) the
Owner Trustee will enter into any other
agreements or instruments related
thereto as requested by the Seller;
provided, however, that the Owner Trustee
may, but shall not be obligated to, enter
into any such amendment, agreement
or instrument that affects the Owner
Trustee's own rights, duties or
immunities under this Agreement or any
other Basic Document; and provided,
further, that the obligation of the Issuer
to purchase such Fixed Value
Payments and/or Fixed Value Finance Charges
and of the Owner Trustee to enter
into any such amendment or other agreement
or instrument is subject to the
following conditions precedent:
(i) such amendment and other agreements and instruments, in
forms satisfactory to the Owner Trustee and, in the case of
amendments or agreements to be executed and delivered by the
Indenture Trustee, in forms satisfactory to the Indenture
Trustee,
shall have been executed by each other party thereto and delivered
to
the Owner Trustee or the Indenture Trustee as appropriate;
(ii) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee an Officer's Certificate and an Opinion
of
Counsel to the effect that each condition precedent (including
the
requirement with respect to all required filings) provided by
this
Section has been complied with and such amendment or other
agreement
or instrument is authorized or permitted by this Agreement;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such sale and issuance;
15
<PAGE>
(iv) such sale and issuance and such amendment or other
agreement or instrument shall not adversely affect in any
material
respect the interest of any Noteholder or Certificateholder, and
the
Seller shall have provided to the Owner Trustee and the
Indenture
Trustee an Officer's Certificate to such effect;
(v) the Owner Trustee and the Indenture Trustee shall have
received an Opinion of Counsel to the effect that such sale and
issuance will not have any material tax consequence to any
Noteholder
or Certificateholder; and
(vi) all filings and other actions required to continue the
first perfected interest of the Trust in the Owner Trust Estate
and
the Indenture Trustee in the Collateral shall have been duly made
or
taken by
the Seller.
(b) Except as described in Section 10.04, the Seller will not
sell,
transfer, assign, set over or otherwise
convey the Fixed Value Payments and
Fixed Value Finance Charges other than to
the Issuer pursuant to paragraph
(a).
ARTICLE III
The Receivables
---------------
Section 3.01 Representations and Warranties of Seller with Respect
to
the Receivables. The Seller makes the
following representations and warranties
as to the Receivables on which the Issuer
is deemed to have relied in
acquiring the Receivables. Such
representations and warranties speak as of the
execution and delivery of this Agreement
and as of the Closing Date, but shall
survive the sale, transfer and assignment
of the Receivables to the Issuer and
the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Characteristics of Receivables. Each Standard Receivable
and Fixed Value
Receivable (A) was originated in the United States of
America by a Dealer for the retail sale of a Financed Vehicle in
the
ordinary course of such Dealer's business, was fully and
properly
executed by the parties thereto, was purchased by the Seller
from
such Dealer under an existing dealer agreement, (B) has created
or
shall create a valid, subsisting and enforceable first priority
security interest in favor of the Seller and is assignable by
the
Seller to the Issuer and by the Issuer to the Indenture Trustee,
(C)
contains customary and enforceable provisions such that the
rights
and remedies of the holder thereof are adequate for realization
against the collateral of the benefits of the security, and (D)
generally provides for level monthly payments (provided, that
the
payment in the first or last month in the life of the Standard
Receivable or Fixed Value Receivable may be minimally different
from
the level payments and that the payment in the last month of a
Fixed
Value Receivable may be a Fixed Value Payment) that fully
amortize
the Amount Financed by maturity and yield interest at the
Annual
Percentage Rate. No Receivable conveyed to the Issuer on the
Closing
Date is an OMSC Receivable or has forced-placed physical damage
insurance.
(b) Schedule of Receivables. The information set forth in
Schedule A to this Agreement is true and correct in all
material
respects as of the opening of business on the
16
<PAGE>
applicable Cutoff Date, and no selection procedures believed to
be
adverse to the Noteholders or Certificateholders were utilized
in
selecting the Receivables. The computer tape or other listing
regarding the Standard Receivables and the Fixed Value
Receivables
made available to the Issuer and its assigns (which computer tape
or
other listing is required to be delivered as specified herein)
is
true and correct in all respects.
(c) Compliance with Law. Each Standard Receivable and Fixed
Value Receivable and the sale of the Financed Vehicle complied at
the
time it was originated or made and, at the execution of this
Agreement, complies in all material respects with all requirements
of
applicable federal, state and local laws and regulations
thereunder,
including usury laws, the federal Truth-in-Lending Act, the
Equal
Credit Opportunity Act, the Fair Credit Reporting Act, the Fair
Debt
Collection Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations
B
and Z, the Texas Consumer Credit Code and State adaptations of
the
National Consumer Act and of the Uniform Consumer Credit Code,
and
other consumer credit laws and equal credit opportunity and
disclosure laws.
(d) Binding Obligation. Each Standard Receivable and Fixed
Value Receivable represents the genuine, legal, valid and
binding
payment obligation in writing of the Obligor, enforceable by
the
holder thereof in accordance with its terms.
(e) No Government Obligor. None of the Standard Receivables or
Fixed Value Receivables is due from the United States of America
or
any State or from any agency, department or instrumentality of
the
United States of America or any State.
(f) Security Interest in Financed Vehicle. Immediately prior to
the sale, assignment and transfer thereof, each Standard
Receivable
and Fixed Value Receivable shall be secured by a validly
perfected
first security interest in the Financed Vehicle in favor of the
Seller as secured party or all necessary and appropriate actions
have
been commenced that would result in the valid perfection of a
first
security interest in the Financed Vehicle in favor of the Seller
as
secured party.
(g) Receivables in Force. No Standard Receivable or Fixed Value
Receivable has been satisfied, subordinated or rescinded, nor has
any
Financed Vehicle been released from the lien granted by the
related
Standard Receivable or Fixed Value Receivable in whole or in
part.
(h) No Amendments. No Standard Receivable or Fixed Value
Receivable has been amended such that the amount of the
Obligor's
scheduled payments has been increased.
(i) No Waiver. No provision of a Standard Receivable or Fixed
Value Receivable has been waived.
(j) No Defenses. No right of rescission, setoff, counterclaim
or defense has been asserted or threatened with respect to any
Standard Receivable or Fixed Value Receivable.
17
<PAGE>
(k) No Liens. To the best of the Seller's knowledge, no liens
or claims have been filed for work, labor or materials relating to
a
Financed Vehicle that are liens prior to, or equal to or
coordinate
with, the security
interest in the Financed Vehicle granted by any
Standard Receivable or Fixed Value Receivable.
(l) No Default. No Standard Receivable or Fixed Value
Receivable has a payment that is more than 30 days overdue as of
the
related Cutoff Date, and, except as permitted in this paragraph,
no
default, breach, violation or event permitting acceleration under
the
terms of any Standard Receivable or Fixed Value Receivable has
occurred; and no continuing condition that with notice or the
lapse
of time would constitute a default, breach, violation or event
permitting acceleration under the terms of any Standard Receivable
or
Fixed Value Receivable has arisen; and the Seller has not waived
and
shall not waive any of the foregoing.
(m) Insurance. The Seller, in accordance with its customary
procedures, has determined that, at the origination of the
Standard
Receivable or Fixed Value Receivable, the Obligor had obtained
physical damage insurance covering the Financed Vehicle and under
the
terms of the Standard Receivable and Fixed Value Receivable the
Obligor is required to maintain such insurance.
(n) Title. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute a sale of the
Standard
Receivables and Fixed Value Receivables from the Seller to the
Issuer
and that the beneficial interest in and title to the Standard
Receivables and Fixed Value Receivables not be part of the
debtor's
estate in the event of the filing of a bankruptcy petition by
or
against the Seller under any bankruptcy law. No Standard
Receivable
or Fixed Value Receivable has been sold, transferred, assigned
or
pledged by the Seller to any Person other than the Issuer.
Immediately prior to the transfer and assignment herein
contemplated,
the Seller
had good and marketable title to each Standard Receivable
and Fixed Value Receivable free and clear of all Liens,
encumbrances,
security interests and rights of others and, immediately upon
the
transfer thereof, the Issuer shall have good and marketable title
to
each Standard Receivable and Fixed Value Receivable, free and
clear
of all Liens, encumbrances, security interests and rights of
others;
and the transfer has been perfected under the UCC.
(o) Lawful Assignment. No Standard Receivable or Fixed Value
Receivable has been originated in, or is subject to the laws of,
any
jurisdiction under which the sale, transfer and assignment of
such
Standard Receivable or Fixed Value Receivable or any Receivable
under
this Agreement or the Indenture is unlawful, void or voidable.
(p) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Issuer a first
perfected
ownership interest in the Standard Receivable and Fixed Value
Receivables, and to give the Indenture Trustee a first
perfected
security interest therein, shall have been made.
(q) One Original. There is only one original executed copy of
each Standard Receivable and Fixed Value Receivable.
18
<PAGE>
(r) Maturity of Receivables. Each Standard Receivable and Fixed
Value Receivable has a final maturity date on or before April
3,
2011.
(s) Scheduled Payments. (A) Each Standard Receivable and Fixed
Value Receivable has a first scheduled due date on or prior to
the
end of the month following the related Cutoff Date and (B) no
Standard Receivable or Fixed Value Receivable has a payment that
is
more than 30 days overdue as of the related Cutoff Date, and has
a
final scheduled payment date no later than the Final Scheduled
Maturity Date.
(t) Location of Receivable Files. The Receivable Files are kept
at one or more of the locations listed in Schedule B.
(u) Remaining Maturity. The latest scheduled maturity of any
Standard Receivable or Fixed Value Receivable shall be no later
than
the Final Scheduled Maturity Date.
(v) Outstanding Principal Balance. Each Standard Receivable and
Fixed Value Receivable has an outstanding principal balance of
at
least $1,000.00.
(w) No Bankruptcies. No Obligor on any Standard Receivable or
Fixed Value Receivable as of the related Cutoff Date was noted in
the
related Receivable File as the subject of a bankruptcy
proceeding.
(x) No Repossessions. No Financed Vehicle securing any Standard
Receivable or Fixed Value Receivable is in repossession status.
(y) Chattel Paper. Each Standard Receivable and Fixed Value
Receivable constitutes "tangible chattel paper" as defined in
the
UCC.
(z) Agreement. The representations of the Seller in Section
6.01 are true and correct.
(aa) Financing. As of the Cutoff Date, approximately 94.29% of
the aggregate principal balance of the Receivables,
constituting
approximately 90.65% of the number of Receivables, represents
new
vehicles; approximately all of the Receivables are Simple
Interest
Receivables; and
none of the Receivables are Fixed Value Receivables.
The aggregate principal balance of the Receivables, as of the
Cutoff
Date is $2,137,500,207.96.
Section 3.02 Repurchase upon Breach. The Seller, the Servicer or
the
Owner Trustee, as the case may be, shall
inform the other parties to this
Agreement and the Indenture Trustee
promptly, in writing, upon the discovery
of any breach of the Seller's
representations and warranties made pursuant to
Section 3.01 or 6.01. Unless any such
breach shall have been cured by the last
day of the second Collection Period
following the discovery thereof by the
Owner Trustee or receipt by the Owner
Trustee of written notice from the
Seller or the Servicer of such breach, the
Seller shall be obligated to
repurchase any Receivable materially and
adversely affected by any such breach
as of such last day (or, at the Seller's
option, the last day of the first
Collection Period following the discovery).
In consideration of the repurchase
of any such
19
<PAGE>
Receivable, the Seller shall remit the
Purchase Amount, in the manner
specified in Section 5.04. Subject to the
provisions of Section 6.03, the sole
remedy of the Issuer, the Owner Trustee,
the Indenture Trustee, the
Noteholders or the Certificateholders with
respect to a breach of
representations and warranties pursuant to
Section 3.01 and the agreement
contained in this Section shall be to
require the Seller to repurchase
Receivables pursuant to this Section,
subject to the conditions contained
herein.
Section 3.03 Custody of Receivable Files. To assure uniform
quality
in servicing the Receivables and to reduce
administrative costs, the Issuer
hereby revocably appoints the Servicer, and
the Servicer hereby accepts such
appointment, to act for the benefit of the
Issuer and the Indenture Trustee as
custodian of the following documents or
instruments which are hereby or will
hereby be constructively delivered to the
Indenture Trustee, as pledgee of the
Issuer, as of the Closing Date with respect
to each Receivable:
(a) the fully executed original of the Standard Receivable or
Fixed Value Receivable;
(b) the original credit application fully executed by the
Obligor;
(c) the original certificate of title or such documents that
the Servicer or the Seller shall keep on file, in accordance with
its
customary procedures, evidencing the security interest of the
Seller
in the Financed Vehicle; and
(d) any and all other documents that the Servicer or the Seller
shall keep on file, in accordance with its customary
procedures,
relating to a Standard Receivable or Fixed Value Receivable, an
Obligor or a Financed Vehicle.
Section 3.04 Duties of Servicer as Custodian. (a) Safekeeping.
The
Servicer shall hold the Receivable Files as
custodian for the benefit of the
Issuer and maintain such accurate and
complete accounts, records and computer
systems pertaining to each Receivable File
as shall enable the Issuer to
comply with this Agreement. In performing
its duties as custodian the Servicer
shall act with reasonable care, using that
degree of skill and attention that
the Servicer exercises with respect to the
receivable files relating to all
comparable automotive receivables that the
Servicer services for itself or
others. The Servicer shall conduct, or
cause to be conducted, periodic audits
of the Receivable Files held by it under
this Agreement and of the related
accounts, records and computer systems, in
such a manner as shall enable the
Issuer or the Indenture Trustee to verify
the accuracy of the Servicer's
record keeping. The Servicer shall promptly
report to the Issuer and the
Indenture Trustee any failure on its part
to hold the Receivable Files and
maintain its accounts, records and computer
systems as herein provided and
shall promptly take appropriate action to
remedy any such failure. Nothing
herein shall be deemed to require an
initial review or any periodic review by
the Issuer or the Indenture Trustee of the
Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall
maintain
each Receivable File at one of its offices
specified in Schedule B or at such
other office as shall be specified to the
Issuer and the Indenture
