<PAGE>
EXHIBIT 10.6
EXECUTION COPY
SALE AND SERVICING AGREEMENT
by and among
BAY VIEW 2005 WAREHOUSE TRUST,
as Issuer,
BAY VIEW WAREHOUSE CORPORATION,
as Depositor
BAY VIEW ACCEPTANCE CORPORATION,
as Servicer and as Contributor
and
JPMORGAN CHASE BANK, N.A.,
as Indenture Trustee
and
Systems & Services Technologies, Inc.,
as Backup Servicer
Dated as of June 20, 2005
BAY VIEW 2005 WAREHOUSE TRUST
UP TO $450,000,000 WAREHOUSE FUNDING FACILITY
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
ARTICLE I DEFINITIONS
2
Section 1.01. Defined
Terms
2
ARTICLE II TRANSFER AND ACQUISITION OF
RECEIVABLES
5
Section 2.01. Transfer
and Acquisition of Receivables
5
Section 2.02. The
Closing
6
Section 2.03. Funding
Dates
6
ARTICLE III REPRESENTATIONS AND WARRANTIES
7
Section 3.01.
Representations and Warranties of the Issuer
7
Section 3.02.
Representations and Warranties of the Depositor
8
Section 3.03.
Repurchase of Receivables
21
Section 3.04. Issuer's
Assignment of Repurchased Receivables
22
Section 3.05. Survival
of Representations and Warranties
22
ARTICLE IV CONDITIONS
23
Section 4.01.
Conditions to Obligation of the Issuer
23
Section 4.02.
Conditions to Obligation of the Depositor
25
ARTICLE V COVENANTS OF THE DEPOSITOR
25
Section 5.01.
Protection of Right, Title and Interest
25
Section 5.02. Other
Liens or Interest
26
Section 5.03.
Principal Executive Office; Jurisdiction of Organization
27
Section 5.04. Costs
and Expenses
27
Section 5.05. No
Waiver
27
Section 5.06.
Depositor's Records
27
Section 5.07.
Cooperation by Depositor
27
Section 5.08. Notice
of Breach
28
Section 5.09.
Liability of Depositor; Indemnities
28
Section 5.10. Merger
or Consolidation of, or Assumption of the Obligations of, Depositor
29
Section 5.11.
Limitation on Liability of Contributor, Depositor and Others
30
Section 5.12.
Contributor and Depositor May Own Notes
30
Section 5.13.
Additional Covenants of the Depositor
31
ARTICLE VI ADMINISTRATION AND SERVICING OF
RECEIVABLES
31
Section 6.01.
Appointment and Duties of the Servicer
31
Section 6.02.
Realization upon Receivables
33
Section 6.03.
Insurance
34
Section 6.04.
Maintenance of Security Interests in Vehicles
35
Section 6.05.
Servicing Fee; Payment of Certain Expenses by Servicer
36
</TABLE>
i
<PAGE>
<TABLE>
<S>
<C>
Section 6.06. Weekly
Servicer Report; Monthly Servicer Report; Pre-Funding
Servicer Report
37
Section 6.07. Annual
Statement as to Compliance; Notice of Servicer Event of
Default; Annual and Quarterly Financial Statements
37
Section 6.08. Annual
Independent Accountants' Report
38
Section 6.09. Access
to Certain Documentation and Information Regarding
Receivables
39
Section 6.10.
Recalculation of Monthly Servicer Report
39
Section 6.11. Fidelity
Bond
41
Section 6.12. No
Offset
41
Section 6.13. Delivery
of Backup Tapes to Backup Servicer
41
Section 6.14.
Covenants of Servicer
41
Section 6.15. Purchase
of Receivables upon Breach
42
Section 6.16.
Custodian Files
42
ARTICLE VII COLLECTIONS
43
Section 7.01.
Collection of Receivable Payments; Modification and Amendment
of
Receivables
43
ARTICLE VIII REPRESENTATIONS, WARRANTIES
AND COVENANTS
45
Section 8.01.
Covenants, Representations and Warranties of the Servicer
45
Section 8.02. Purchase
of Receivables upon Breach of Representation and Warranty
49
Section 8.03.
Representations of Backup Servicer
49
ARTICLE IX THE SERVICER AND BACKUP SERVICER
50
Section 9.01.
Liability of Servicer; Indemnities
50
Section 9.02. Merger
or Consolidation of, or Assumption of the Obligations of,
the Servicer and Backup Servicer
52
Section 9.03.
Limitation on Liability of Servicer, the Backup Servicer and Others
53
Section 9.04.
Delegation of Duties
54
Section 9.05. Servicer
and Backup Servicer Not to Resign
54
Section 9.06. Backup
Servicer's Reliance; Liability; Errors
55
ARTICLE X SERVICER EVENTS OF DEFAULT
56
Section 10.01.
Servicer Event of Default
56
Section 10.02.
Consequences of a Servicer Event of Default
59
Section 10.03.
Appointment of Successor
60
Section 10.04.
Notification
62
Section 10.05. Waiver
of Past Defaults
62
ARTICLE XI ADMINISTRATION OF TRUST DUTIES
62
Section 11.01.
Administrative Duties
62
ARTICLE XII TERMINATION OF AGREEMENT
63
</TABLE>
ii
<PAGE>
<TABLE>
<S>
<C>
Section 12.01. Term
63
Section 12.02. Effect
of Termination
63
ARTICLE XIII MISCELLANEOUS PROVISIONS
63
Section 13.01.
Amendment
63
Section 13.02. Waivers
63
Section 13.03. Notices
63
Section 13.04.
Severability of Provisions
66
Section 13.05. Rights
Cumulative
66
Section 13.06. No
Offset
66
Section 13.07. Powers
of Attorney
66
Section 13.08.
Assignment and Binding Effect
67
Section 13.09.
Captions
67
Section 13.10. Legal
Holidays
67
Section 13.11.
Counterparts
67
Section 13.12.
Governing Law
67
Section 13.13. Consent
to Jurisdiction
67
Section 13.14. Trial
by Jury Waived
68
Section 13.15. Parties
68
Section 13.16.
Relationship of the Parties
68
Section 13.17. No
Bankruptcy Petition Against the Issuer or the Depositor
69
Section 13.18. Third
Party Beneficiaries
69
Section 13.19. Reports
to Holders
69
Section 13.20.
Obligations of Depositor
69
Section 13.21.
Subsequent Pledge
69
Section 13.22.
Protection of Title to Trust
69
Section 13.23.
Limitation of Liability
72
Section 13.24.
Integration
72
Section 13.25.
Limitation on Recourse
72
Schedule I -- Initial Receivables
Schedule II -- Backup Servicer Fees
Exhibit A -- Form of Assignment and
Assumption Agreement
A-1
Exhibit B -- Form of Contract
B-1
Exhibit C -- Contributor's Underwriting
Guidelines
C-1
Exhibit D -- Servicer's Monthly Report
D-1
Exhibit E -- Bay View Acceptance
Corporation's Collection Policy
E-1
Exhibit F -- Form of Loan Master File and
History Information
F-1
Exhibit G -- Servicer's Weekly Report
G-1
Exhibit H -- Pre-Funding Servicer Report
H-1
</TABLE>
iii
<PAGE>
SALE AND SERVICING AGREEMENT
THIS SALE
AND SERVICING AGREEMENT (as amended and supplemented from time
to time, the "Sale and Servicing Agreement"
or the "Agreement") is made as of
June 20, 2005 , by and among BAY VIEW 2005
WAREHOUSE TRUST, a statutory trust
established under the laws of the State of
Delaware, as issuer (the "Issuer"),
BAY VIEW WAREHOUSE CORPORATION, a
corporation established under the laws of the
State of Delaware, as depositor (the
"Depositor"), BAY VIEW ACCEPTANCE
CORPORATION ("BAY VIEW ACCEPTANCE"), a
Nevada corporation, as servicer (the
"Servicer") and as contributor (the
"Contributor"), JPMORGAN CHASE BANK, N.A.,
as indenture trustee (the "Indenture
Trustee"), and Systems & Services
Technologies, Inc., as backup servicer (the
"Backup Servicer"). Capitalized
terms used herein and not otherwise defined
shall have the meanings ascribed
thereto in that certain Indenture dated as
of even date herewith (the
"Indenture") by and between the Issuer and
the Indenture Trustee.
PRELIMINARY STATEMENT
WHEREAS,
the Indenture provides for the issuance by the Issuer of its
Automobile Receivables Backed Notes, Series
2005-1 (the "Notes") to the
Noteholders; and
WHEREAS,
Bay View Acceptance has acquired and will acquire certain motor
vehicle receivables evidenced by retail
installment contracts and security
agreements secured by security interests in
the related Financed Vehicles; and
WHEREAS,
pursuant to the Contribution Agreement and each Contributor
Assignment on the Closing Date and on each
Funding Date, Bay View Acceptance, as
Contributor, will contribute the Initial
Receivables and the related Subsequent
Receivables, respectively, to the
Depositor; and
WHEREAS,
pursuant to the terms of the Indenture, on the Closing Date,
the
Issuer will pledge the Receivables and the
security interests in the Financed
Vehicles and the other items of the Trust
Estate to the Indenture Trustee for
the benefit of the Noteholders, the Agent
and the Financial Institutions; and
WHEREAS,
pursuant to the terms of the Custodian Agreement, the Depositor
is obligated to deliver or cause to be
delivered to the Custodian, the documents
to be included in the Custodian File, which
are to be held by the Custodian
pursuant to the terms of the Custodian
Agreement; and
WHEREAS,
the Issuer, the Depositor, the Servicer, the Indenture Trustee
and the Backup Servicer wish to enter into
this Sale and Servicing Agreement and
each Depositor Assignment pursuant to which
the Depositor will, on the Closing
Date and each Funding Date, transfer the
Initial Receivables and the related
Subsequent Receivables, respectively, to
the Issuer, and the Servicer will
perform the duties as described herein,
including servicing and administering
collections on all of the Receivables
transferred to the Issuer pursuant to the
terms of this Agreement and pledged to the
Indenture Trustee pursuant to the
terms of the Indenture, realizing upon such
Receivables, and administering
claims made under the Insurance
Policies.
<PAGE>
NOW
THEREFORE, in consideration of the covenants and conditions
contained
in this Sale and Servicing Agreement, the
parties, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section
1.01. Defined Terms. Capitalized terms used but not defined in
this Sale and Servicing Agreement shall
have the respective meanings assigned to
them in the Indenture and the Contribution
Agreement unless the context
otherwise requires, and the definitions of
such terms are equally applicable
both to the singular and plural forms of
such terms and to the masculine,
feminine and neuter genders of such
terms.
"Actual
Payment" means, with respect to a Collection Period and a
Receivable, all payments received from or
on behalf of an Obligor with respect
to such Receivable, all of which amounts
shall be deposited into the Local Bank
Account for deposit into the Collection
Account. An Actual Payment does not
include Repurchase Prices.
"Backup
Servicer Account" means Account Number 2806462 in the name of
the
Backup Servicer at Commerce Bank N.A (ABA#
101000019).
"Backup
Servicer Lockbox" means the locked postal box associated with
the
Backup Servicer Account with respect to
which Commerce Bank N.A. has been
granted exclusive access for the purpose of
retrieving and processing payments
made on the Receivables.
"Backup
Servicer Termination Fee" means the product of (x) 2 times (y)
the
Monthly Fee (as set forth in item I.B. of
Schedule II hereto) in effect at the
time of the Backup Servicer's termination
pursuant to Section 6.01(a) hereof.
"Backup
Servicing Fee" means the fee payable to the Backup Servicer as
set
forth in Schedule II hereto including, if
applicable, the Backup Servicer
Termination Fee.
"Chapter
13 Receivable" means a Receivable (a) the Obligor of which is
subject to a proceeding under Chapter 13 of
the Bankruptcy Code, (b) the terms
of which have been set forth in a plan
confirmed in that Chapter 13 proceeding,
under which plan, no default has occurred,
and (c) on which at least one payment
has been made since the confirmation of the
plan in the Chapter 13 proceeding.
"Collection Policy" means the
servicing policies and procedures utilized
by the Servicer in connection with its
servicing of the Receivables, a copy of
which is attached hereto as Exhibit E, or,
with respect to the Backup Servicer
as successor Servicer, the servicing
policies and procedures utilized by the
Backup Servicer in connection with its
servicing of the Receivables.
"Collection Records" means all manually prepared or computer
generated
records relating to collection efforts or
payment histories with respect to the
Receivables.
2
<PAGE>
"Core
State" means, as of any date of determination, any State in
which
Bay View Acceptance has originated
Receivables for more than 12 consecutive
months as of such date of
determination.
"Custodian
File" shall have the meaning specified in Section 4.01(d).
"Deposited
Assets" means, with respect to each Receivable, all right,
title and interest of the Depositor in, to
and under (i) the security interest
in the related Financed Vehicle granted by
the related Obligor pursuant to such
Receivable and any accessions thereto, and
any other interest of the Depositor
in the Financed Vehicles and accessions,
including, without limitation, the
related Certificate of Title; (ii) any
service warranties and service contracts
and any physical damage, credit life, risk
default, disability, gap or other
insurance policies covering the related
Financed Vehicle or the related Obligor
or refunds in connection therewith relating
to the Receivables (including,
without limitation, State tax refunds) and
any proceeds from the liquidation of
the Receivables or Financed Vehicles
received after the related Cutoff Date;
(iii) all property (including the right to
receive future Recoveries) that shall
secure a Receivable; (iv) the rights that
relate to a Receivable under each
Dealer Agreement, including, but not
limited to, any recourse against any
Dealer; (v) rebates or refunds of premiums
and other amounts relating to
insurance policies and other items financed
under the Receivables or otherwise
covering an Obligor or a Financed Vehicle;
(vi) the original retail installment
contract and security agreement and any
amendments thereof evidencing the
Receivables; (vii) all documentation in the
Custodian File and other documents
maintained by the Contributor according to
its customary procedures with respect
to the Receivables, Financed Vehicles or
Obligors; (viii) the Depositor's rights
under the Contribution Agreement and each
Contributor Assignment, including, but
not limited to, any recourse against the
Contributor and any right to require
the Contributor to repurchase or make
indemnity payments; and (ix) the proceeds
of any and all of the foregoing including
all proceeds of the conversion,
voluntary or involuntary, of any of the
foregoing into cash or other property
whether now existing or hereafter
arising.
"Depositor
Address" means 818 Oak Park Road, Covina, CA 91724.
"Depositor
Assignment" means the document of assignment substantially in
the form attached to this Agreement as
Exhibit A.
"Determination Date" means with respect to a Collection Period, the
15th
day of the next calendar month, or if such
15th day is not a Business Day, the
next succeeding Business Day.
"Eligible
Servicer" means the Servicer, the Backup Servicer or an entity
which, at the time of its appointment as
Servicer, (a) is legally qualified and
has the capacity to service the
Receivables, (b) has demonstrated the ability to
service a portfolio of motor vehicle retail
installment sale contracts in
accordance with the standards of skill and
care customary in the industry and
(c) is approved in writing by the Majority
Holders. The determination of the
qualifications specified in subsections (a)
and (b) of this definition shall be
made by the Majority Holders.
"FICO
Score" means, with respect to any Receivable, the Fair, Isaac
&
Company Inc. credit risk score with respect
to such Receivable.
3
<PAGE>
"Ineligible Receivable" means any Receivable which: (a) was
originated in
Maryland and which, at the time of the
origination of such Receivable, had a
Receivable Balance of less than $25,000,
until such time as all required
licenses and approvals are obtained, or (b)
was originated in Pennsylvania until
such time as all the required licenses and
approvals are obtained.
"Holiday
Pay Receivables" means those Receivables that (A) have an
original FICO Score above 700; (B) have not
been Delinquent Receivables within
the preceding six (6) months and (C) have
been on the books for at least six (6)
months.
"Holiday
Pay Receivables Program" means an extension program offered
once
per year in the fourth quarter to
Receivables meeting the requirements of
Holiday Pay Receivables; provided, however
that the Agent reserves the right to
suspend the Holiday Pay Receivables Program
at any time, in its sole discretion.
"Initial
Receivable" means each Receivable transferred from the
Contributor to the Depositor and then from
the Depositor to the Issuer, and a
security interest in which was
simultaneously granted by the Issuer to the
Indenture Trustee on the Closing Date as
set forth on Schedule I attached to the
Depositor Assignment dated as of the
Closing Date.
"Insurance
Policy" means with respect to a Receivable, any insurance
policy (including the insurance policies
described in Section 6.03) benefiting
the holder of the Receivable and providing
coverage for loss or physical damage,
credit life, credit disability, theft,
mechanical breakdown, gap or similar
coverage with respect to the Financed
Vehicle or the Obligor.
"Lendco
Receivable" means a Receivable originated by, and purchased by
the
Contributor from, Lendco Financial
Services.
"Local
Bank Account" shall have the meaning specified in Section
7.01(d).
"Monthly
Servicer Report" means with respect to each Determination Date,
a
report, completed by and executed by the
Servicer, in accordance with Section
6.06(b), in the form of Exhibit D or
otherwise in form and substance acceptable
to the Agent.
"Non-Core
State" means any State which is not a Core State.
"Pool"
means the aggregation of Receivables and related assets
contained
from time to time in the Issuer's trust
estate.
"Post
Office Boxes" shall have the meaning specified in Section
7.01(d).
"Pre-Funding Servicer Report" means a report completed by and
executed by
the Servicer in accordance with Section
6.06(c), in the form of Exhibit H or
otherwise in form and substance acceptable
to the Agent.
"Reliening
Expenses" shall have the meaning specified in Section 6.04(b).
4
<PAGE>
"Rule of
78s Method" means the method under which a portion of a payment
allocable to earned interest and the
portion allocable to principal are
determined according to the sum of the
month's digits or any equivalent method
commonly referred to as the "Rule of
78s."
"Rule of
78s Receivable" means any Receivable under which the portion of
a
payment allocable to interest and the
portion allocable to principal are
determined in accordance with the Rule of
78s Method.
"Servicer
Event of Default" means an event described in Section 10.01.
"Servicing
Fee" means, with respect to any Payment Date, the fee payable
to (i) the initial Servicer for services
rendered during the related Collection
Period, which shall be equal to one-twelfth
of the Servicing Fee Rate multiplied
by Aggregate Receivable Balance as of the
first day of such Collection Period
and (ii) the Backup Servicer (both prior to
and while acting as successor
Servicer) for services rendered during the
related Collection Period, which
shall be equal to the Backup Servicing Fees
applicable for such services and
such Collection Period.
"Servicing
Fee Rate" means 1.0% per annum, so long as Bay View Acceptance
or an Affiliate of Bay View Acceptance is
the Servicer and the per annum rate
negotiated with such successor Servicer if
a successor Servicer is acting as the
Servicer.
"Subsequent Receivable" means, with respect to each Funding Date,
each
Receivable contributed to the Depositor by
the Contributor and then transferred
from the Depositor to the Issuer and a
security interest simultaneously granted
to the Indenture Trustee by the Issuer on
such Funding Date as set forth as
Schedule I to the related Depositor
Assignment.
"Tangible
Net Worth" shall have the meaning set forth in the Indenture.
"Ultra
Receivable" means a Receivable originated by, and purchased by
the
Contributor from, Ultra Funding, Ltd.
"Weekly
Servicer Report" means a report completed by and executed by
the
Servicer each week in accordance with
Section 6.06(a), in the form of Exhibit G
or otherwise in form and substance
acceptable to the Agent.
ARTICLE II
TRANSFER AND ACQUISITION OF RECEIVABLES
Section
2.01. Transfer and Acquisition of Receivables. On the Closing
Date
and on each Funding Date, subject to the
terms and conditions of this Agreement,
the Depositor agrees to transfer to the
Issuer, and the Issuer agrees to acquire
from the Depositor, the Initial Receivables
and the related Subsequent
Receivables, respectively, and the
Deposited Assets relating thereto.
(a) Initial Transfer of Receivables. On the Closing Date,
simultaneously with the transactions set forth in the Indenture and
the
Contribution Agreement, the Depositor shall transfer to the
Issuer,
without
recourse except as set forth herein (i) the Initial
5
<PAGE>
Receivables, and all moneys received thereon on or after the
Initial
Cutoff
Date and (ii) the related Deposited Assets.
(b)
Consideration for Initial Receivables. In consideration of the
Receivables and the related Deposited Assets described in Section
2.01(a),
the
Depositor shall, on the Closing Date, receive an amount equal to
the
Receivables Purchase Price in immediately available funds.
(c) Transfer of Subsequent Receivables. On each Funding Date,
upon
the
simultaneous transfer of such assets from the Contributor to
the
Depositor,
the Depositor shall transfer to the Issuer, without recourse
except as
set forth herein (i) the related Subsequent Receivables, and
all
moneys
received thereon on or after the applicable Cutoff Date and
(ii)
the
related Deposited Assets; provided, however, that Subsequent
Receivables may not be transferred by the Depositor to the Issuer
or a
security
interest granted by the Issuer to the Indenture Trustee unless
each of
the conditions precedent in Section 2.12 of the Indenture has
been
satisfied.
(d)
Consideration for Subsequent Receivables. Upon two (2) Business
Days'
prior written notice given by the Depositor to the Issuer and
then
from the
Issuer to the Indenture Trustee, the Depositor shall cause the
Issuer to
cause the Indenture Trustee, on the applicable Funding Date, to
pay to the
Issuer, which will pay the Depositor, which will pay to or at
the
direction of the Contributor an amount equal to the Receivables
Purchase
Price with respect to the related Subsequent Receivables in
immediately available funds.
(e) Transfer. It is the intention of the Depositor and the
Issuer
that each
transfer hereunder constitute an absolute transfer of the
Receivables and the Deposited Assets from the Depositor to the
Issuer with
the
intention of removing them from the Depositor's estate pursuant
to
Section
541 of the United States Bankruptcy Code, as the same may be
amended
from time to time, or any successor provision thereto. If,
notwithstanding the express intention of the parties, this
Agreement is
deemed not
to constitute an absolute transfer of the Receivables and the
related
Deposited Assets from the Depositor to the Issuer, this
Agreement
shall be
deemed to be a security agreement within the meaning of Article
8
and
Article 9 of the Uniform Commercial Code as in effect in the State
of
New York,
and the conveyance provided for in this Section 2.01 shall be
deemed to
be a grant by the Depositor to the Issuer of a valid first
priority
perfected security interest in all of the Depositor's right,
title and
interest in and to the Receivables and the Deposited Assets.
Section
2.02. The Closing. The transfer of the Initial Receivables
shall
take place at a closing (the "Closing"), on
the Closing Date, simultaneously
with the grant by the Issuer of all of its
right, title and interest in and to
the Initial Receivables and related
Deposited Assets to the Indenture Trustee
for the benefit of the Noteholders, and the
issuance of the Notes pursuant to
the Indenture.
Section
2.03. Funding Dates. The transfer of Subsequent Receivables on
a
Funding Date shall take place at such
location as the Depositor, the Issuer and
the Indenture Trustee may
6
<PAGE>
reasonably agree. The transfer of
Subsequent Receivables shall be made in
accordance with Sections 2.12 through 2.14
of the Indenture pursuant to which
(a) the Depositor will transfer all of its
right, title and interest in and to
the Subsequent Receivables and the related
Deposited Assets to the Issuer, and
(b) the Issuer will confirm the grant of
all of its right, title and interest in
and to such Subsequent Receivables and the
related Deposited Assets to the
Indenture Trustee for the benefit of the
Noteholders, the Agent and the
Financial Institutions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section
3.01. Representations and Warranties of the Issuer. The Issuer
hereby represents and warrants to the
Depositor, the Indenture Trustee, the
Servicer and the Backup Servicer as of the
Closing Date and each Funding Date:
(a) Organization, Etc. The Issuer is a statutory trust duly
formed,
validly
existing and in good standing under the laws of the State of
Delaware
with full power and authority to execute and deliver this
Agreement
and to perform the terms and provisions hereof; the Issuer is
duly
qualified to do business as a foreign business entity in good
standing,
and has obtained all required licenses and approvals, if any,
in
all
jurisdictions in which the ownership or lease of property or
the
conduct of
its business (including, without limitation, the purchase of
the
Receivables from the Depositor hereunder and under each
Depositor
Assignment, the conveyance of the Receivables by the Issuer
pursuant to
the
Indenture, and the performance of its other obligations under
this
Agreement,
each Depositor Assignment and the other Transaction Documents
to which
it is a party) requires such qualifications except those
jurisdictions in which failure to be so qualified would not have
a
material
adverse effect on the business or operations of the Issuer, on
the
ability of the Issuer to perform its obligations under the
Transaction
Documents,
or on the Noteholders, the Receivables or the Trust Estate.
(b) Due Authorization. The execution, delivery and performance
by
the Issuer
of this Agreement have been duly authorized by all necessary
action, do
not require any approval or consent of any Person, do not and
will not
conflict with any provision of the Issuer Trust Agreement, and
do
not and
will not conflict with or result in a breach which would
constitute
(with or without notice or lapse of time) a default under any
agreement,
indenture, mortgage, deed of trust, or other instrument binding
upon or
applicable to it or its property, or any law or governmental
regulation
or court decree applicable to it or its property, do not and
will not
result in the creation or imposition of any Lien upon any of
its
properties
pursuant to the terms of any indenture, agreement, mortgage,
deed of
trust, or other instrument (other than as expressly provided in
the
Transaction Documents), and this Agreement is the legal, valid
and
binding
obligation of the Issuer enforceable in accordance with its
terms
except as
the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting the
enforcement of
creditors'
rights or by general equity principles.
(c)
No Proceedings. There are no proceedings or investigations
pending,
or to the Issuer's knowledge, threatened, before any court,
regulatory
body, administrative
7
<PAGE>
agency or
other governmental instrumentality having jurisdiction over the
Issuer or
its properties: (A) asserting the invalidity of this Agreement,
any
Depositor Assignment, the Indenture, the Notes, or any other
Transaction Document; (B) seeking to prevent the issuance of the
Notes or
the
consummation of any of the transactions contemplated by this
Agreement,
any Depositor Assignment, the Indenture or any other
Transaction Document to which it is a party; (C) seeking any
determination
or ruling that might materially
and adversely affect the performance by
the Issuer
of its obligations under, or the validity or enforceability of,
this
Agreement, any Depositor Assignment, the Indenture, the Notes or
any
other
Transaction Document to which it is a party; (D) which might
adversely
affect the federal or State income, excise, franchise or
similar
tax
attributes of the Notes; or (E) that could reasonably be expected
to
have a
material adverse effect on the Receivables.
(d) Business Purpose. The Issuer will acquire the Receivables for
a
bona fide
business purpose and has undertaken the transactions
contemplated herein as principal rather than as agent for the
Depositor or
any other
person.
(e) Issuer's Records. The books and records of the Issuer will
disclose
that the Depositor transferred the Receivables to the Issuer;
provided,
however, the Issuer acknowledges that the Receivables will
appear as
assets of the Contributor and its consolidated subsidiaries in
the
consolidated financial statements of the Contributor (which
financial
statements
will include a footnote stating that the Receivables are not
available
to satisfy the Contributor's or the Depositor's creditors).
(f) Valid Assignment. Each Receivable has been validly pledged
by
the Issuer
to the Indenture Trustee pursuant to the Indenture; and no
Receivable
has been sold, transferred, assigned or pledged by the Issuer
to any
Person other than the Indenture Trustee.
(g) Issuer's Address. The principal place of business of the
Issuer
is located
1840 Gateway Drive, San Mateo, CA 94404, and the executive
office of
the Issuer is located at Rodney Square North, 1100 North Market
Street,
Wilmington, Delaware 19890-0001. All books and records of the
Issuer
relating to the Trust Estate are (and have been since its date
of
organization) stored at such principal place of business. The
Depositor's
jurisdiction of organization is, and has been since its date of
organization, Delaware.
Section
3.02. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to
the Issuer, the Indenture Trustee,
the Servicer and the Backup Servicer as of
the Closing Date and each Funding
Date (except as otherwise provided):
(a) On the Closing Date, with respect to the Initial
Receivables,
and on the
related Funding Date, with respect to the Subsequent
Receivables:
(i) Characteristics of Receivables. Each Receivable (A) was
originated
by the Contributor or a Dealer for the retail sale or
refinancing of a Financed Vehicle in the ordinary course of the
Contributor's or such Dealer's business, and the Contributor or
8
<PAGE>
such
Dealer had all necessary licenses and permits to originate
Receivables in the State where the Contributor or such Dealer was
located
(except
for any Ineligible Receivable), was fully and properly executed
by
the
parties thereto, and, in the case of Receivables originated by
a
Dealer,
was purchased by the Contributor from such Dealer under an
existing
Dealer Agreement with the Contributor and was validly assigned
by
such
Dealer to the Contributor, (B) was purchased by the Depositor
from
the
Contributor pursuant to the Contribution Agreement and was
validly
assigned
by the Contributor to the Depositor, (C) contains customary and
enforceable provisions such as to render the rights and remedies of
the
holder
thereof adequate for realization against the collateral
security,
(D) is not
a Rule of 78s Receivable or a pre-computed interest Receivable,
but is a
fully amortizing simple interest receivable which provides for
level
monthly payments (provided that the payment or payments in the
first
Collection
Period and the final Collection Period of the life of the
Receivable
may be different from the level payment) which, if made when
due, shall
fully amortize the Amount Financed over the original term, (E)
provides
that, in the event such Receivable is prepaid, such prepayment
fully pays the
principal balance and all accrued and unpaid interest
through
the date of such prepayment at an interest rate equal to or
greater
than the APR, (F) has not been amended, rewritten, modified or
deferred,
nor any provisions thereof waived, except in accordance with
the
Collection
Policy and the provisions of the Transaction Documents, (F) is
payable in
United States dollars and (H) does not entitle the Contributor
to reduce,
nor has the Contributor reduced, the APR under such Receivable
to below
4%. No Subsequent Receivable will be a Chapter 13 Receivable,
an
Ultra
Receivable or a Lendco Receivable, as of its transfer date.
(ii) No Fraud or Misrepresentation. Each Receivable was
originated
by a
Dealer and was sold by the Dealer to the Contributor, or was
originated
by the Contributor, and was transferred by the Contributor to
the
Depositor without any fraud or material misrepresentation on the
part
of such
Dealer or the Contributor or on the part of the related
Obligor.
(iii) Compliance with Law. All requirements of applicable
federal,
State and
local laws, and regulations thereunder (including, without
limitation, usury laws, the Federal Truth-in-Lending Act, the Equal
Credit
Opportunity Act, the Fair Credit Billing Act, the Fair Credit
Reporting
Act, the
Fair Debt Collection Practices Act, the Federal Trade
Commission
Act, the
Federal Trade Commission Credit Practices Rule, the
Magnuson-Moss
Warranty
Act, the Federal Reserve Board's Regulations "B" and "Z," the
Servicemembers' Civil Relief Act of 2003, Division 3 of the
California
Vehicle
Code, State unfair and deceptive trade practices laws and State
adaptations of the National Consumer Act and of the Uniform
Consumer
Credit
Code and other consumer credit laws and equal credit
opportunity
and
disclosure laws) in respect of all of the Receivables, each and
every
sale of
Financed Vehicles have been complied with in all material
respects,
and each Receivable and the sale of the Financed Vehicle
evidenced
by each Receivable complied in all material respects at the
time
such
Receivable or sale was originated or made and now complies in
all
material
respects with all applicable legal requirements.
9
<PAGE>
(iv) Origination. Each Receivable was originated in the United
States,
and each Receivable (other than the Lendco Receivables and the
Ultra
Receivables), at the time of origination, conformed to
requirements
of the
Contributor's then current "Underwriting Guidelines" (the most
recent
copy of which is attached hereto as Exhibit C) and credit
policies
applicable
to such Receivable.
(v) Binding Obligation. Each Receivable represents the genuine,
legal,
valid and binding payment obligation of the Obligor thereon,
enforceable by the holder thereof in accordance with its terms,
except (A)
as
enforceability may be limited by bankruptcy, insolvency,
reorganization
or similar
laws affecting the enforcement of creditors' rights generally
and by
equitable limitations on the availability of specific remedies,
regardless
of whether such enforceability is considered in a proceeding in
equity or
at law and (B) as such Receivable may be modified by the
application after the related Cutoff Date of the Servicemembers'
Civil
Relief Act
of 2003, as amended; and all parties to each Receivable had
full legal
capacity to execute and deliver such Receivable and all other
documents
related thereto and to grant the security interest purported to
be granted
thereby.
(vi)
Obligors. Each Obligor is domiciled in the United States. None
of the
Obligors is an Affiliate of Bay View Acceptance or is employed
by
Bay View
Acceptance. None of the Obligors is the United States of
America
or any
State or any agency, department, subdivision or instrumentality
thereof.
No Receivable has been included in a "fleet" sale (i.e., a sale
to any
single Obligor of more than five (5) Financed Vehicles).
(vii) Obligor Bankruptcy. As of the related Cutoff Date, no
Obligor
has been
identified on the Depositor's records as being the subject of a
current
bankruptcy proceeding as a debtor, except for Obligors under
Chapter 13
Receivables.
(viii) Schedule of Receivables. The information pertaining to
each
Receivable
set forth in the Schedule of Receivables was true and correct
in all
material respects as of the close of business on the related
Cutoff
Date and
at the Closing Date or the related Funding Date, as applicable.
(ix) Marked Records. By the Closing Date or the related Funding
Date, as
applicable, each of the Contributor and the Depositor will have
caused the
portions of its records relating to the Receivables to be
clearly
and unambiguously marked to show that the Receivables
constitute
part of
the Trust Estate and are owned by the Issuer and pledged to the
Indenture
Trustee.
(x) Computer Tape or Listing. The computer tape made available
by
the Contributor
to the Backup Servicer on the Closing Date or the related
Funding
Date was complete and accurate as of the related Cutoff Date
and
includes a
description of the same Receivables that are described in the
related
Schedule of Receivables.
(xi) Chattel Paper. The Receivables constitute chattel paper
within
the
meaning of the UCC.
10
<PAGE>
(xii) One Original. There is only one original executed copy of
each
Receivable.
(xiii) Custodian Files Complete. There exists a Custodian File
pertaining
to each Receivable, and such Custodian File contains: (A) a
fully
executed original of the related retail installment contract, and
an
acknowledgment of the Custodian that it holds such Receivable for
the
benefit of
the Noteholders, (B) evidence of either (1) a certificate of
insurance,
(2) an application form for insurance signed by the Obligor, or
(3) a
signed representation letter from the Obligor named in the
Receivable
pursuant to which the Obligor has agreed to obtain physical
damage
insurance for the related Financed Vehicle, (C) the original or
electronic
equivalent of the Certificate of Title or, with respect to a
Certificate of Title filed electronically, a report prepared by a
third
party
service that shows such service maintains perfection related to
such
Certificate of Title on behalf of the Servicer; or, if the
Certificate of
Title has
not yet been received, and in the case of each electronic
Certificate of Title, an application therefor, or a copy of
such
Certificate of Title with a copy of the application filed to amend
the
Certificate of Title to indicate the security interest of the
Contributor
in the
related Financed Vehicle, (D) an electronic or hard copy of an
original
credit application signed by the Obligor, (E) the originals of
all
written assumption, consolidation, extension, modification or
waiver
agreements, if any, relating to such Receivable except for any such
item
listed
above which has been preserved by electronic means, (F) any
other
documents
that the Servicer shall keep on file, in accordance with its
customary
procedures, or reasonably required by the Issuer, from time to
time to be
kept on file, relating to a Receivable, the related Obligor or
the
related Financed Vehicle, and (G) any additional original loan
documents
evidencing any assumption, consolidation, extension,
modification or waiver of a Receivable approved by the Servicer.
Each of
such
documents which is required to be signed by the Obligor has
been
signed by
the Obligor in the appropriate spaces. All blanks on any form
have been
properly filled in and each form has otherwise been correctly
prepared
in all material respects. The complete Custodian File for each
Receivable
is currently in the possession of the Custodian.
(xiv) Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, and the Financed Vehicle securing each
such
Receivable
has not been released from the Lien of the related Receivable
in whole
or in part. No provisions of any Receivable have been waived,
altered or
modified in any respect since its origination, except by
instruments or documents identified in the Custodian File held by
the
Custodian
and in accordance with the Collection Policy in all material
respects.
Any modification to any Receivable necessary to comply with the
Servicemembers' Civil Relief Act of 2003, as amended, has been made
in
compliance
with the Act and any laws related thereto.
(xv) Lawful Assignment. No Receivable was originated in, or is
subject to
the laws of any jurisdiction, the laws of which would make
unlawful,
void or voidable the sale, transfer and assignment of such
Receivable
under this Agreement, the Contribution Agreement or the
Indenture.
The Depositor has not entered into any agreement with any
account
debtor that prohibits, restricts or conditions the assignment
of
any
portion of the Receivables. Each Receivable, by its terms, is
assignable.
11
<PAGE>
(xvi) Good Title. No Receivable has been sold, transferred,
assigned
or pledged
by the Depositor to any Person other than the Issuer.
Immediately prior to the conveyance of the Receivables to the
Issuer
pursuant
to this Agreement, the Depositor was the sole owner thereof and
had good
and indefeasible title thereto, free of any Lien and, upon
execution
and delivery of this Agreement and the applicable Depositor
Assignment
by the Depositor, the Issuer shall have good and indefeasible
title to
and will be the sole owner of such Receivables, free of any
Lien.
No Dealer
has a participation in, or other right to receive, proceeds of
any Receivable. The Depositor has
not taken any action to convey any right
to any
Person that would result in such Person having a right to
payments
received
under the related Insurance Policies or the related Dealer
Agreements
or to payments due under such Receivables. Each Initial
Receivable
has been validly assigned by the Depositor to the Issuer on the
Closing
Date pursuant to this Agreement and each Subsequent Receivable
will be
validly assigned to the Issuer on the related Funding Date
pursuant
to this Agreement and the related Depositor Assignment.
(xvii) Security Interest in Financed Vehicle. Each Receivable
from
each
respective Obligor is secured by a valid, binding and
enforceable
first
priority perfected security interest in favor of the Contributor
in
the
Financed Vehicle. The Certificate of Title for each Financed
Vehicle
shows or,
if a new or replacement Certificate of Title is being applied
for with
respect to such Financed Vehicle, the Certificate of Title will
be
received within one hundred eighty (180) days of the Closing Date
or
the
related Funding Date, as applicable, and will show, the
Contributor
named as
the original secured party under each Receivable as the holder
of
a first
priority perfected security interest in such Financed Vehicle.
With
respect to each Receivable for which the Certificate of Title has
not
yet been
returned from the applicable governmental authority, the
Servicer
has
received written evidence from the related Dealer that such
Certificate of Title showing the Contributor as first lienholder
has been
applied
for. If the Receivable was originated in a State in which the
filing or
recording of a financing statement under the UCC is required to
perfect a
security interest in motor vehicles, such filings or recordings
have been
duly made and show the Contributor named as the original
secured
party
under the related Receivable. As of the related Cutoff Date,
there
were no
Liens or claims for taxes, work, labor, storage or materials
affecting
a Financed Vehicle which are or may be Liens prior or equal to
the lien
of the related Receivable. Each security interest in the
Financed
Vehicles
has been or, with respect to Subsequent Receivables, will be as
of the
related Funding Date, validly assigned by the Depositor to the
Issuer
pursuant to this Agreement and the related Depositor
Assignment.
Immediately after the sale, assignment and transfer thereof to the
Issuer,
although
the related Certificates of Title will not indicate the Issuer
as
secured
party, each Receivable will be secured by an enforceable and
perfected
first priority security interest in the Financed Vehicle in
favor of
the Indenture Trustee as secured party for the benefit of the
Noteholders, the Agent and the Financial Institutions which
security
interest
is prior to all other Liens in such Financed Vehicle.
(xviii) All Filings Made. On the Closing Date or the related
Funding
Date, as
applicable, all filings (including, without limitation, UCC
filings)
required to be made by any Person and actions required to be
taken or
performed by any Person in any jurisdiction (A) to give the
Issuer a
first priority perfected ownership interest in, and (B)
12
<PAGE>
to give
the Indenture Trustee a first priority perfected Lien on, the
Initial
Receivables and the Subsequent Receivables, respectively, and
the
proceeds
thereof and the rest of the Trust Estate (other than the
Financed
Vehicles)
have been made, taken or performed or will be made, taken or
performed
on or prior to the Closing Date or the related Funding Date, as
applicable, and as of the Closing Date or the related Funding Date,
as
applicable, the Issuer has or will have, as applicable, such a
first
priority
perfected ownership interest and the Indenture Trustee has or
will have,
as applicable, such a first priority perfected Lien.
(xix) No Impairment. The Depositor has not done anything to
convey
any right
to any Person that would result in such Person having a right
to
payments
due under the Receivables or otherwise to impair the rights of
the
Issuer, the Indenture Trustee, the Agent or the Noteholders in
any
Receivable
or the proceeds thereof.
(xx) Receivable Not Assumable. No Receivable is assumable by
another
Person in
a manner which would release the Obligor thereof from such
Obligor's
obligations to the Depositor with respect to such Receivable.
(xxi) No Defenses. No Receivable is subject to any right of
rescission, setoff, counterclaim or defense and no such right has
been
asserted
or threatened with respect to any Receivable. The operation of
the terms
of any Receivable or the exercise of any right thereunder will
not render
such Receivable unenforceable in whole or in part or subject to
any such
right of rescission, setoff, counterclaim or defense.
(xxii) No Default. There has been no uncured default, breach,
violation
or event permitting acceleration under the terms of any
Receivable
(other than payment delinquencies of not more than sixty (60)
days as of
the Initial Cutoff Date or the related Funding Date, as
applicable, or payment delinquencies of sixty (60) days or more
that have
been cured
on or prior to the Closing Date or related Funding Date, as
applicable), and no condition exists or event has occurred and
is
continuing
that with notice, the lapse of time or both would constitute a
default, breach, violation or
event permitting acceleration under the
terms of
any Receivable, and there has been no waiver of any of the
foregoing.
As of the related Cutoff Date, no Financed Vehicle had been
repossessed from the related Obligor or repossessed by the Servicer
from
any other
Person.
(xxiii) Insurance. At the time of the origination of each
Receivable
with a
Receivable Balance of $50,000 or greater, the related Financed
Vehicle
was covered by a comprehensive and collision Insurance Policy
(A)
in an
amount at least equal to the lesser of (a) its maximum
insurable
value or
(b) the principal amount due from the Obligor under the related
Receivable, (B) naming the Contributor and its successors and
assigns as
loss payee
and (C) insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by
comprehensive and collision coverage. Each Receivable that finances
the
cost of premiums
for gap, credit life and credit accident and health
insurance
is covered by such an Insurance Policy. The Financed Vehicle
relating
to each Receivable that finances the cost of an extended
service
contract
is covered by such a service contract. Each Receivable requires
the
Obligor to maintain physical loss and damage insurance, naming
the
Contributor and its successors and
13
<PAGE>
assigns as
additional insured parties, and each Receivable permits the
holder
thereof to obtain physical loss and damage insurance at the
expense
of the
Obligor if the Obligor fails to do so.
(xxiv) Receivables. (A) Each Receivable had an original maturity
of
not less
than eighteen (18) and not more than ninety-seven (97) months;
(B) each
Receivable has an Annual Percentage Rate (exclusive of prepaid
finance
charges) of at least 4%; (C) no Receivable was a Defaulted
Receivable
or a Delinquent Receivable as of the Cutoff Date; (D) no funds
have been
advanced by the Depositor, the Contributor, the Servicer, the
Issuer,
any Dealer, or anyone acting on behalf of any of them in order
to
cause any
Receivable to qualify under subclause (B) of this clause
(xxiv);
(E) none
of the Receivables have been re-aged (except for Receivables
extended
in compliance with Section 7.01(c)); (F) the Receivable Balance
of each
Receivable set forth in the Schedule of Receivables is true and
accurate
in all material respects as of the related Cutoff Date; (G) no
more than
five percent (5%) of the Aggregate Receivable Balance may be
Receivables with individual principal balances in excess of
$100,000.00
(after
giving effect to acquisitions on such Funding Date) and (H) the
application with respect to the Certificate of Title for each
Receivable
has been
applied for.
(xxv) Subsequent Receivables. The addition of Subsequent
Receivables
on any
Funding Date shall not occur unless each of the funding
conditions
set forth
in Section 2.12 of the Indenture have been satisfied and unless
each of
the following representations and warranties are true and
correct
on the
related Cutoff Date (with each Receivable Balance or APR for
any
Receivable
measured as of its related Cutoff Date):
(A) no more than (i) 35% (determined by the Aggregate
Receivable
Balance)
of all of the Receivables pledged to the Indenture Trustee,
after
taking
into consideration the Subsequent Receivables pledged to the
Indenture
Trustee on such Funding Date, shall have been originated in
each
of
California, Florida, and Tennessee;
(B) no more than 25% (determined by the Aggregate Receivable
Balance)
of all of the Receivables pledged to the Indenture Trustee,
after
taking
into consideration the Subsequent Receivables pledged to the
Indenture
Trustee on such Funding Date, shall have been originated in
each
Core State
other than California or Florida or Tennessee;
(C) no more than 10% (determined by the Aggregate Receivable
Balance)
of all Receivables pledged to the Indenture Trustee, after
taking
into
consideration the Subsequent Receivables pledged to the
Indenture
Trustee on
such Funding Date, shall have been originated in each Non-Core
State;
(D) no more than 40% (determined by the Aggregate Receivable
Balance)
of all of the Receivables pledged to the Indenture Trustee,
after
taking
into consideration the Subsequent Receivables pledged to the
Indenture
Trustee on such Funding Date, shall have had a FICO Score at
the
time of
origination thereof equal to or below 700;
(E) no more than 15% (determined by the Aggregate Receivable
Balance)
of all of the Receivables pledged to the Indenture Trustee,
after
taking
into consideration the
14
<PAGE>
Subsequent Receivables
pledged to the Indenture Trustee on such Funding
Date,
shall have had a FICO Score at the time of origination thereof
equal
to or
below 660;
(F) no more than 5% (determined by the Aggregate Receivable
Balance)
of all of
the Receivables pledged to the Indenture Trustee, after taking
into
consideration the Subsequent Receivables pledged to the
Indenture
Trustee on
such Funding Date, shall have had a FICO Score at the time of
origination thereof below 640;
(G) no more than 35% (determined by the Aggregate Receivable
Balance)
of all of the Receivables pledged to the Indenture Trustee,
after
taking
into consideration the Subsequent Receivables pledged to the
Indenture
Trustee on such Funding Date, shall have an original term of
more than
84 months;
(H) no more than 85% (determined by the Aggregate Receivable
Balance)
of all of the Receivables pledged to the Indenture Trustee,
after
taking into
consideration the Subsequent Receivables pledged to the
Indenture
Trustee on such Funding Date, shall have an original term of
more than
72 months;
(I) no more than 75% (determined by the Aggregate Receivable
Balance)
of all of the Receivables pledged to the Indenture Trustee,
after
taking
into consideration the Subsequent Receivables pledged to the
Indenture
Trustee on such Funding Date, shall have been, at the time of
origination thereof, associated with a Financed Vehicle which is a
used
vehicle;
(J) no more than 20% (determined by the Aggregate Receivable
Balance)
of all of the Receivables pledged to the Indenture Trustee,
after
taking
into consideration the Subsequent Receivables pledged to the
Indenture
Trustee on such Funding Date, shall be associated with a
Financed
Vehicle which has a model year greater than 5 years prior to
the
calendar
year in which such Funding Date occurs;
(K) at least 95%
(determined by the Aggregate Receivable Balance) of
all of the
Receivables pledged to the Indenture Trustee, after taking into
consideration the Subsequent Receivables pledged to the Indenture
Trustee
on such
Funding Date, shall have been, at the time of origination
thereof,
associated
with a Financed Vehicle which is a passenger car, sport utility
vehicle or
light-duty truck;
(L) no more than $50,000 of all of the Receivables pledged to
the
Indenture Trustee, after taking
into consideration the Subsequent
Receivables pledged to the Indenture Trustee on such Funding Date,
shall
be Lendco
Receivables or Ultra Receivables;
(M) no more than 0.50% (determined by the Aggregate Receivable
Balance)
of all of the Receivables pledged to the Indenture Trustee,
after
taking
into consideration the Subsequent Receivable pledged to the
Indenture
Trustee on such Funding Date, shall be Chapter 13 Receivables;
and
(N) the weighted average loan-to-value of the Aggregate
Receivable
Balance in
the Pool is less than 130%.
15
<PAGE>
(xxvi) No Adverse Selection. No selection procedures adverse to
the
Noteholders have been utilized in selecting such Receivable from
all other
similar
receivables originated or acquired by the Contributor.
(xxvii) Form of Contract. For any State wherein 10% or more,
determined
by the Aggregate Receivable Balance, of all Receivables have
been
pledged to the Indenture Trustee, each such Receivable contains
provisions
that give the obligee substantially the same benefits as
provided
in one of the form contracts attached as Exhibit B hereto,
except
for such
immaterial modifications or deviations from such form contracts
which
appear in certain Receivables or which may appear in the future
form
contracts
of the Contributor or which the Depositor acquires from the
Contributor; any such modifications or deviations from the form
loan
contracts
will not have a material adverse effect on the Noteholders.
(xxviii) Loss or Destruction. As of the related Cutoff Date, no
Financed
Vehicle related to a Receivable has been the subject of a total
loss or
destruction.
(xxix) No Obligation to Dealers. The Issuer and its assignees
will
assume no
obligation to Dealers or other holders of the Receivables as a
result of
its acquisition of the Receivables.
(xxx) No Future Obligation. The full Amount Financed of each
Receivable
has been advanced to or on behalf of each Obligor, and there
are no
requirements for future advances thereunder. The Obligor with
respect to
each Receivable does not have any option under such Receivable
to borrow
from the Depositor or any Affiliate additional funds secured by
the
Financed Vehicle.
(xxxi) Prior Servicing. The servicing of each Receivable and
the
collection
practices relating thereto have been lawful and in accordance
with the
standards set forth in the Collection Policy; other than the
Servicer
and any back up servicer arrangement that has been entered into
in accordance with the provisions
of the Transaction Documents, no other
person has
the right to service any Receivable.
(xxxii) Licenses. The Contributor, at the time of origination
of
each
Receivable and as of Closing Date, with respect to the Initial
Receivables, and as of the applicable Funding Date, with respect to
the
Subsequent
Receivables, was in possession of all State and local licenses
(including
all debt collection licenses) required for it to acquire and
own such
Receivable and service such Receivable in accordance with the
Collection
Policy in effect on such date and to perform its services as
Servicer
under this Agreement, and none of such licenses has been
suspended,
revoked or terminated, except where the failure of the
Contributor to obtain and maintain any such license could not have
a
material
adverse effect on the Issuer, any Noteholder, any Receivable or
other part
of the Trust Estate or the Contributor's ability to perform its
obligations as Contributor, Custodian or Servicer under the
Transaction
Documents.
(xxxiii) Payment Instructions. No Person has provided any
payment
instructions to any Obligor that are inconsistent with the
provisions of
Section
7.01(d) hereof.
16
<PAGE>
Notwithstanding anything to the contrary
herein, within thirty (30) days after
the Closing Date, the Depositor shall
provide the forms of contracts required
pursuant to Section 3.02(a)(xxvii) hereof
and the representations and warranties
made by the Depositor, prior to such
delivery, pursuant to Section
3.02(a)(xxvii) hereof , shall be deemed to
be true and correct in all respects.
(b) Organization and Good Standing. The Depositor has been duly
organized
and is validly existing as a corporation in good standing under
the laws
of the State of Delaware, with power and authority to own its
properties
and to conduct its business as such properties are currently
owned and
such business is currently conducted. The Depositor is not
organized
under the laws of any jurisdiction other than Delaware.
(c) Due Qualification. The Depositor is duly qualified to do
business as a
foreign corporation in good standing, and has obtained all
necessary
licenses and approvals, in all jurisdictions in which the
ownership
or lease of its property or the conduct of its business
(including, without limitation, the purchase of the Receivables
from the
Contributor under the Contribution Agreement and under each
Contributor
Assignment, the conveyance of the Receivables by the Depositor
hereunder
and under
each Depositor Assignment, and the performance of its other
obligations under this Agreement, each Contributor Assignment,
each
Depositor
Assignment and the other Transaction Documents to which it is a
party)
requires such qualification where the failure to be so
qualified
would
materially and adversely affect its business or operations, its
ability to
perform its obligations under the Transaction Documents, the
Issuer,
any Noteholder, the Receivables or any other part of the Trust
Estate.
(d) Power and
Authority. The Depositor has the power and authority
to execute
and deliver this Agreement and the other Transaction Documents
to which
it is a party and to carry out its terms and their terms,
respectively; the Depositor has all power, authority and legal
right to
acquire,
own and transfer the Receivables and Deposited Assets to the
Issuer;
and the execution, delivery and performance of this Agreement
and
the other
Transaction Documents to which it is a party have been duly
authorized
by the Depositor by all necessary corporate action.
(e) Binding Obligations. This Agreement and the other
Transaction
Documents
to which the Depositor is a party, when duly executed and
delivered
by the other parties hereto and thereto, shall constitute
legal,
valid and
binding obligations of the Depositor enforceable in accordance
with their
respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting the
enforcement of creditors' rights generally and by equitable
limitations on
the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at
law.
(f) No Violation. The consummation of the transactions
contemplated
by this
Agreement and the other Transaction Documents to which it is a
party and
the fulfillment of the terms of this Agreement and the other
Transaction Documents
to which it is a party shall not conflict with,
result in
any breach of any of the terms and provisions of or constitute
(with or
without notice, lapse of time or both) a default under, the
certificate of incorporation or by-laws of the Depositor, or any
material
agreement,
mortgage, deed of
17
<PAGE>
trust or
other material instrument to which the Depositor is a party or
by
which it
is bound, or result in the creation or imposition of any Lien
upon any
of its properties pursuant to the terms of any such indenture,
agreement,
mortgage, deed of trust or other instrument, or violate any
material
law, order, rule or regulation applicable to the Depositor of
any
court or
of any federal or State regulatory body, administrative agency
or
other
governmental instrumentality having jurisdiction over the
Depositor
or any of
its properties, or in any way materially adversely affect the
interests
of the Noteholders or the Indenture Trustee in any Receivable
or
any other
part of the Trust Estate, or affect the Depositor's ability to
perform
its obligations under this Agreement or any other Transaction
Document
to which it is a party.
(g) No Proceedings. There are no proceedings or investigations
pending
or, to the Depositor's knowledge, threatened against the
Depositor,
before any court, regulatory body, administrative agency or
other
tribunal or governmental instrumentality having jurisdiction
over
the
Depositor or its properties (i) asserting the invalidity of
this
Agreement
or any of the other Transaction Documents, (ii) seeking to
prevent
the issuance of the Notes or the consummation of any of the
transactions contemplated by this Agreement or any of the other
Transaction Documents, (iii) seeking any determination or ruling
that
might
materially and adversely affect the performance by the Depositor
of
its
obligations under, or the validity or enforceability of, this
Agreement
or any of the other Transaction Documents, (iv) seeking to
adversely
affect the federal income tax or other federal, State or local
tax
attributes of the Notes, or (v) that could reasonably be expected
to
have a
material adverse effect on the Receivables.
(h) Approvals. All approvals, authorizations, consents, orders
or
other
actions of any person, corporation or other organization, or of
any
court,
governmental agency or body or official, required in connection
with the
execution and delivery by the Depositor of this Agreement or
any
other
Transaction Document to which it is a party have been or will
be
taken or
obtained on or prior to the Closing Date.
(i) Depositor Address. The Depositor Address is, and has been
since
its date
of incorporation, the chief place of business and the office
where the
Depositor keeps its records concerning the Receivables and the
Deposited
Assets. The Depositor's chief executive office is and has been
since its
date of incorporation 1840 Gateway Drive, Suite 401, San Mateo,
California
94404. The Depositor's jurisdiction of incorporation is, and
has been
since its date of incorporation, Delaware.
(j) Solvency of the Depositor:
(i) The Depositor does not believe, nor does it have any
reasonable cause to believe, that it cannot perform each and
every
covenant contained in this Agreement.
(ii) The transactions contemplated by the Transaction
Documents are being consummated by the Depositor in furtherance
of
its ordinary business purposes, with no contemplation of
insolvency
and with no intent to hinder, delay or defraud any of its present
or
future creditors.
18
<PAGE>
(iii) Neither on the date of the transactions contemplated by
the Transaction Documents or immediately before or after such
transactions, nor as a result of the transactions, will the
Depositor:
(A)be insolvent such that the sum of its debts is
greater than all of its respective property, at a fair
valuation;
(B) be engaged in or about to engage in, business or a
transaction for which any property remaining with the
Depositor will be an unreasonably small capital or the
remaining assets of the Depositor will be unreasonably small
in relation to its respective business or the transaction; and
(C) have intended to incur or believed it would incur,
debts that would be beyond its respective ability to pay as
such debts mature or become due. The Depositor's assets and
cash flow enable it to meet its present obligations in the
ordinary course of business as they become due.
(iv) Both immediately before and after the transactions
contemplated by the Transaction Documents (a) the present fair
salable value of the Depositor's assets was or will be in excess
of
the amount that will be required to pay its probable liabilities
as
they then exist and as they become absolute and matured; and (b)
the
sum of the
Depositor's assets was or will be greater than the sum of
its debts, valuing its assets at a fair salable value.
(v) There are no proceedings or investigations pending, or to
the knowledge of the Depositor, threatened, against or affecting
the
Depositor in or before any court, governmental authority or
agency
or arbitration board or tribunal (including, but not limited to
any
such proceeding or investigation with respect to any
environmental
or other liability resulting from the ownership of the
Receivables)
which, individually or in the aggregate, involve the possibility
of
materially and adversely affecting the properties, business,
prospects, profits or condition (financial or otherwise) of the
Depositor, or the ability of the Depositor to perform its
obligations under this Agreement. The Depositor is not in
default
with respect to any order of any court, governmental authority
or
agency or arbitration board or tribunal.
(k) Taxes. All tax returns or extensions required to be filed by
the
Depositor
in any jurisdiction (other than jurisdictions in which the
failure to
file would not have a material adverse effect on the Depositor,
the
Depositor's ability to perform its obligations under the
Transaction
Documents,
the Issuer, any Noteholder or any Receivable or any other part
of the
Trust Estate) have in fact been filed, and all taxes,
assessments,
fees and
other governmental charges upon the Depositor, or upon any of
the
properties, income or franchises shown to be due and payable on
such
returns
have been, or will be, paid or are being contested in good
faith
by
appropriate proceedings with respect to which the Agent has
received
written
notice. To the knowledge of the Depositor, all such tax returns
are true
and correct and the Depositor has no knowledge of any proposed
additional
tax
19
<PAGE>
assessment
against it in any material amount nor of any basis therefor.
The
provisions for taxes on the books of the Depositor are in
accordance
with generally
accepted accounting principles.
(l) Consolidated Returns. The Contributor, the Depositor and
the
Issuer are
members of an affiliated group within the meaning of Section
1504 of
the Internal Revenue Code which will file a consolidated
federal
income tax
return at all times until termination of the Transaction
Documents.
(m) Intent of Transactions. It is the intention of the
Depositor
that the
Receivables and the Deposited Assets are owned by the Issuer as
of the
Closing Date or the related Funding Date, as applicable, and
that
the
beneficial interest in and title to the Receivables and the
Deposited
Assets are
not part of the Depositor's estate in the event of the filing
of a
bankruptcy petition by or against the Depositor under any
bankruptcy
law.
(n) Notes as Debt. For federal, State and local income tax
purposes,
each of
the Contributor and the Depositor, its shareholders and
stockholders and the Issuer shall treat the Receivables and the
Deposited
Assets as
owned by the Issuer, shall include in the computation of the
Depositor's gross income for such purposes the income from the
Receivables
and the
Deposited Assets, shall treat the Notes as debt of the
Depositor
and its
consolidated subsidiaries for such purposes, and shall cause
the
Contributor and its consolidated subsidiaries to deduct the
interest paid
or accrued
with respect to the Notes in accordance with its applicable
method of
accounting for such purposes.
(o) ERISA. The Depositor is in compliance with the Employee
Retirement
Income Security Act of 1974, as amended.
(p) Certificates, Statements and Reports. The officers'
certificates, statements, reports and other documents prepared by
the
Depositor
and furnished by the Depositor to the Issuer, the Indenture
Trustee or
the Agent pursuant to this Agreement or any other Transaction
Document to which the
Depositor is a party, and in connection with the
transactions contemplated hereby or thereby, when taken as a whole,
do not
contain
any untrue statement of a material fact or omit to state a
material
fact necessary to make the statements contained herein or
therein
not
misleading.
(q) Stock of Depositor. The Contributor is the registered owner
of
all of the
shares of common stock of the Depositor, all of which are fully
paid and
nonassessable and owned of record, free and clear of all
mortgages,
assignments, pledges, security interests, warrants, options and
rights to
purchase other than those (if any) granted pursuant to the
Transaction Documents.
(r) Accuracy of Information. All information heretofore furnished
by
the
Depositor for purposes of or in connection with any of the
Transaction
Documents
or any transaction contemplated hereby or thereby is, and all
such
information hereafter furnished by the Depositor will be, true
and
accurate
in every material respect on the date such information is
stated
or
certified and does not and will not contain any material
20
<PAGE>
misstatement of fact or omit to state a material fact or any
fact
necessary
to make the statements contained therein not misleading.
(s) Material Adverse Change. Since December 31, 2004, no event
has
occurred
that would have a material adverse effect on (i) the financial
condition
or operations of Depositor, (ii) the ability of the Depositor
to
perform
its obligations under the Transaction Documents, or (iii) the
collectibility of the Receivables generally or any material portion
of the
Receivables.
(t) Compliance with Laws. The Depositor has complied in all
respects
with all
applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except
where
the
failure to so comply could not reasonably be expected to have a
material
adverse effect on the Issuer, any Noteholder, any Receivable or
other part
of the Trust Estate.
Section
3.03. Repurchase of Receivables. (a) The Depositor hereby
covenants and agrees to deliver to the
Issuer, the Contributor, the Servicer,
the Agent and the Indenture Trustee prompt
written notice of the occurrence of a
breach of any of the representations and
warranties of the Depositor contained
or deemed to be contained in Section
3.02(a) hereof with respect to a Receivable
transferred hereunder. Upon discovery by
the Depositor, the Issuer, the
Indenture Trustee, the Agent or the
Servicer of (a) a Nonconforming Receivable,
or (b) the failure to deliver any document
required to be included in any
Custodian File or file any UCC Financing
Statement required to be filed pursuant
to the Transaction Documents, the party
discovering such breach or failure to
deliver shall give prompt written notice to
each of the other foregoing parties.
Except as specifically provided in this
Agreement or the Indenture, the
Indenture Trustee has no obligation to
review or monitor the Receivables or the
Deposited Assets for compliance with the
representations and warranties or
delivery requirements set forth herein. If
(i) the breach of representations or
warranties causing such Receivable to be a
Nonconforming Receivable has a
material adverse effect on such Receivable
or its collectibility or the
Noteholders and shall not have been (A)
cured within thirty (30) days following
notice thereof or (B) waived by the
Majority Holders following notice thereof or
(ii) the failure to deliver to the
Custodian such Custodian File documents or
UCC Financing Statements shall not have
been cured within the time period
required herein (other than the
Certificates of Titles, with respect to which
the Contributor shall have three (3)
Business Days after the one hundred eighty
(180) day period set forth in Section
3.02(a)(xvii)), the Depositor shall
deposit or cause to be deposited the
Repurchase Price with respect to such
Receivable in the Collection Account within
two (2) Business Days following the
applicable cure period, if any; provided,
that a breach of a representation and
warranty set forth in paragraphs (ii),
(iii), (v), (vii), (ix), (xiv), (xv),
(xvi), (xvii), (xviii), (xix), (xx), (xxi),
(xxii), (xxviii), (xxx) and (xxxii)
of Section 3.02(a) automatically shall be
deemed to have a material adverse
effect on the applicable Receivable or the
Noteholders. The Issuer shall
transfer to the Depositor the Receivable
(and the Deposited Assets relating
solely to such Receivable) affected by such
breach or failure to deliver;
provided, that such transfer and assignment
shall only be made upon receipt by
the Issuer of notice from the Servicer that
the Repurchase Price has been
remitted to the Servicer and deposited into
the Collection Account. The Issuer
shall be entitled to enforce the
obligations of the Depositor, the Contributor
and each applicable Dealer under this
Agreement, the Contribution Agreement and
the applicable Dealer Agreement,
respectively, to remit the Repurchase Price to
the Servicer for
21
<PAGE>
deposit into the Collection Account. The
Indenture Trustee and the Agent are
authorized to take action on behalf of the
Issuer (i) to enforce the obligations
of the Depositor to repurchase such
Receivable under this Agreement, (ii) to
enforce the obligations of the Contributor
to repurchase such Receivable under
the Contribution Agreement and (iii) to
enforce the obligation of a Dealer to
repurchase such Receivable under the
applicable Dealer Agreement.
(b) The
obligations of the Depositor, the Contributor and the Issuer to
remove any Receivable (and the Deposited
Assets relating solely to such
Receivable) and to remit the Repurchase
Price with respect to a Nonconforming
Receivable which has a material adverse
affect on the Noteholders or on such
Receivable or its collectibility or as to
which a failure to deliver has
occurred and is continuing shall constitute
the sole remedy, except for the
indemnification provisions expressly set
forth in the Indenture, this Agreement
and the Contribution Agreement, against the
Depositor, the Contributor and the
Issuer for such breach or failure to
deliver, available to the Indenture Trustee
or the Noteholders.
Notwithstanding the foregoing, the Depositor shall indemnify the
Owner
Trustee (as such and in its individual
capacity), the Issuer, the Indenture
Trustee, the Backup Servicer, the Agent,
the Noteholders and their respective
officers, directors, employees and agents
against all costs, expenses, losses,
damages, claims and liabilities, including
reasonable fees and expenses of
counsel, which may be asserted against or
incurred by any of them, as a result
of third-party claims arising out of the
events or facts giving rise to a
repurchase event set forth in Section
3.03(a).
Section
3.04. Issuer's Assignment of Repurchased Receivables. With
respect
to any Receivable reacquired by the
Depositor pursuant to this Agreement, the
Issuer shall assign, without recourse,
representation or warranty, to the
Depositor all the Issuer's right, title and
interest in and to such Receivable,
and all security and documents relating
thereto.
Section
3.05. Survival of Representations and Warranties. The
representations and warranties contained in
this Agreement are made as of the
execution and delivery of this Agreement,
and shall survive the sale, transfer
and assignment of the related Receivables
and the other related Deposited Assets
hereunder and under the related Depositor
Assignment, as applicable, to the
Issuer, and the pledge thereof by the
Issuer to the Indenture Trustee under the
Indenture. The Depositor and the Issuer
agree that the Issuer will assign to the
Indenture Trustee all of the Issuer's
rights under this Agreement and each
Depositor Assignment and that the Indenture
Trustee shall thereafter be entitled
to enforce this Agreement and each
Depositor Assignment directly against the
Depositor in the Indenture Trustee's own
name on behalf of the Noteholders;
provided, however, that the representations
and warranties of the Depositor in
this Agreement shall not be construed as a
warranty or guaranty by the Depositor
as to the future payments by any
Obligor.
22
<PAGE>
ARTICLE IV
CONDITIONS
Section
4.01. Conditions to Obligation of the Issuer. The obligation of
the Issuer to accept any transfer of
Receivables hereunder is subject to the
satisfaction of the following
conditions:
(a) The representations and warranties of the Depositor
hereunder
shall be
true and correct on the Closing Date and each Funding Date, as
the case
may be, with the same effect as if then made, and the Depositor
shall have
performed all obligations to be performed by it hereunder on or
prior to
the Closing Date or Funding Date, as the case may be.
(b) The Depositor shall, at its own expense, on or prior to the
Closing
Date and each Funding Date, as applicable, indicate in its
files
that the
applicable Receivables have been transferred to the Issuer
pursuant
to this Agreement and pledged to the Indenture Trustee pursuant
to the
Indenture, and the Depositor shall deliver to the Issuer a
related
Schedule
of Receivables certified by an Authorized Officer of the
Depositor
to be true, correct and complete. Further, the Depositor hereby
agrees
that the computer files and other physical records of the
Receivables maintained by the Depositor will bear an indication
reflecting
that the
Receivables were transferred to the Issuer and pledged to the
Indenture
Trustee.
(c) The following documents must be delivered by the Depositor on
or
in
connection with the Closing Date and each Funding Date, as
applicable.
(i) The Depositor Assignment. As of the Closing Date and each
Funding Date, the Depositor shall execute a Depositor
Assignment,
substantially in the form of Exhibit A hereto, with respect to
the
Receivables and the related Deposited Assets being transferred
by
the Depositor on such date (as identified on the Schedule of
Receivables attached to such Depositor Assignment).
(ii) Evidence of UCC Filings. On or prior to the Closing Date
and each Funding Date, as applicable, the Depositor shall
provide
the Issuer evidence that the Depositor has obtained, at the
expense
of the Depositor, (A) executed releases and UCC-3 releases or
termination statements in each jurisdiction in which required
by
applicable law, if any, to release any prior security interests
in
the Receivables and the related Deposited Assets granted by the
Depositor and (B) UCC-1 financing statements in each jurisdiction
in
which required by applicable law, executed by the Depositor, as
seller or debtor, and naming the Issuer, as purchaser or
secured
party, identifying the Receivables and the related Deposited
Assets
as collateral, meeting the requirements of the laws of each
such
jurisdiction and in such manner as is necessary to perfect the
transfer of such Receivables to the Issuer.
23
<PAGE>
(iii) Other Documents. The Depositor must deliver such other
documents and legal opinions as the Issuer or the Agent may
reasonably request.
(d) Documents to be Delivered by the Depositor in Connection
with
the
Closing Date and each Funding Date. On or prior to the Closing Date
or
a Funding
Date, as applicable, the Depositor shall deliver to the
Custodian
the following documents with respect to each Receivable
transferred on such date (collectively, with respect to each
such
Receivable, a "Custodian File"): (a) a fully executed original of
the
related
retail installment contract, and an acknowledgment of the
Custodian
that it holds such Receivable for the benefit of the
Noteholders, (b) evidence of either (1) a certificate of insurance,
(2) an
application form for insurance signed by the Obligor, or (3) a
signed
representation letter from the Obligor named in the Receivable
pursuant to
which the
Obligor has agreed to obtain physical damage insurance for the
related
Financed Vehicle, (c) the original or electronic equivalent of
the
Certificate of Title or, with respect to a Certificate of Title
filed
electronically, a report prepared by a third party service that
shows such
service
maintains perfection related to such Certificate of Title on
behalf of
the Servicer; or, if the Certificate of Title has not yet been
received,
and in the case of each electronic Certificate of Title an
application therefor, or a copy of such Certificate of Title with a
copy
of the
application filed to amend the Certificate of Title to indicate
the
security
interest of the Contributor in the related Financed Vehicle,
(d)
an
electronic or hard copy of an original credit application signed by
the
Obligor,
(e) the originals of all written assumption, consolidation,
extension,
modification or waiver agreements, if any, relating to such
Receivable
except for any such item listed above which has been preserved
by
electronic means, (f) any other documents that the Servicer shall
keep
on file,
in accordance with its customary procedures, or reasonably
required
by the Issuer, from time to time to be kept on file, relating
to
a
Receivable, the related Obligor or the related Financed Vehicle,
and (g)
any
additional original loan documents evidencing any assumption,
consolidation, extension, modification or waiver of a Receivable
approved
by the
Servicer.
On or prior to the Closing Date or a Funding Date, as
applicable,
the
Depositor shall deliver or cause to be delivered to the Custodian
the
original
Certificate of Title or copies of correspondence to the
appropriate governmental authority, and all enclosures thereto,
for
issuance
of the original Certificate of Title for the related Financed
Vehicles.
If any original Certificate of Title is not delivered to the
Servicer
due to the fact that such Certificate of Title has not yet been
issued by
the applicable governmental authority and delivered to or on
behalf of
the Contributor, such Certificate of Title shall be delivered
by
the
Contributor to the Servicer promptly following receipt thereof by
the
Contributor but in no event later than one hundred eighty (180)
days
following
the Closing Date or the related Funding Date, as applicable;
provided,
however, that for any original Certificate of Title not so
delivered
to Custodian prior to the expiration of such 180-day period, or
if any
other item of the Custodian File is not included therein, the
Depositor
shall be deemed to be in breach of its representations and
warranties
contained in Section 3.02(a) hereof, and the related Receivable
shall be
repurchased by the Depositor pursuant to Section 3.03(a)
hereof.
24
<PAGE>
(e) Other Transactions. The transactions contemplated by the
Indenture,
the Contribution Agreement, this Agreement and the other
Transaction Documents shall be consummated on the Closing Date or,
with
respect to
a Subsequent Transfer, shall have been consummated on the
related
Funding Date.
Section
4.02. Conditions to Obligation of the Depositor. The obligation
of
the Depositor to transfer the Receivables
to the Issuer on the Closing Date or
each Funding Date, as the case may be, is
subject to the satisfaction of the
following conditions:
(a) The representations and warranties of the Issuer hereunder
shall
be true
and correct on the Closing Date or such Funding Date, as the
case
may be,
with the same effect as if then made, and the Issuer shall have
performed
all obligations to be performed by it hereunder on or prior to
the
Closing Date or such Funding Date, as the case may be.
(b) All corporate and legal proceedings and all instruments in
connection
with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Depositor and the Agent,
and the
Depositor
and the Agent shall have received from the Issuer copies of all
documents
relevant to the transactions herein contemplated as the
Depositor
or the Agent may have requested.
(c) The Depositor shall have received the related Receivables
Purchase
Price on the Closing Date and each Funding Date.
ARTICLE V
COVENANTS OF THE DEPOSITOR
The
Depositor agrees with the Issuer as follows:
Section
5.01. Protection of Right, Title and Interest.
(a)
Filings. The Depositor shall cause all financing statements and
continuation statements and any other
necessary documents covering the right,
title and interest of the Issuer in and to
the Receivables and the related
Deposited Assets to be promptly filed, and
at all times to be kept recorded,
registered and filed, all in such manner
and in such places as may be required
by law to fully preserve and protect the
right, title and interest of the Issuer
hereunder and the Indenture Trustee under
the Indenture to the Receivables and
the other property of the Trust Estate. The
Depositor shall deliver or cause to
be delivered to or at the direction of the
Issuer (with copies to the Agent),
file-stamped copies of, or filing receipts
for, any document recorded,
registered or filed as provided above, as
soon as available following such
recordation, registration or filing. The
Issuer shall cooperate fully with the
Depositor in connection with the
obligations set forth above and will execute
any and all documents reasonably required
to fulfill the intent of this Section
5.01(a). In the event the Depositor fails
to perform its obligations under this
subsection, the Issuer or the Indenture
Trustee may do so at the expense of the
Depositor.
(b) Name
and Other Changes. At least thirty (30) days prior to the
Depositor making any change in its name,
identity, jurisdiction of organization
or structure which would make any financing
statement or continuation statement
filed in accordance with paragraph (a)
above
25
<PAGE>
seriously misleading within the applicable
provisions of the UCC or any title
statute, the Depositor shall give the
Issuer, the Agent and the Indenture
Trustee written notice of any such change,
and, no later than five (5) days
after the effective date thereof, the
Depositor shall file such financing
statements or amendments as may be
necessary to continue the perfection of the
Issuer's interest in the Receivables and
the Deposited Assets. At least sixty
(60) days prior to the date of any
relocation of its principal executive office
or State of incorporation, the Depositor
shall give the Indenture Trustee, the
Agent and the Issuer written notice thereof
and the Depositor shall, within five
(5) days after the effective date thereof,
file any amendment of any previously
filed financing or continuation statement
or new financing statement necessary
or desirable to continue the perfection of
the Issuer's interest in the
Receivables and the Deposited Assets. The
Depositor shall at all times maintain
its principal executive office within the
United States of America. The
Depositor shall not become or seek to
become organized under the laws of more
than one jurisdiction. The Depositor at all
times shall be and remain a
wholly-owned subsidiary of Bay View
Acceptance.
(c)
Accounts and Records. The Depositor shall maintain accounts and
records as to each Receivable accurately
and in sufficient detail to permit the
reader thereof to know at any time the
status of such Receivable, including
payments and recoveries made and payments
owing (and the nature of each).
(d) Sale
of Other Receivables. If at any time the Depositor shall
propose
to sell, grant a security interest in, or
otherwise transfer any interest in any
automobile, van, sport utility vehicle or
light duty truck installment sale
contracts (other than the Receivables) to
any prospective purchaser, lender, or
other transferee, the Depositor shall give
to such prospective purchaser, lender
or other transferee computer tapes,
records, or print-outs (including any
restored from backup archives) that, if
they shall refer in any manner
whatsoever to any Receivable or Financed
Vehicle, shall indicate clearly that
such Receivable or Financed Vehicle has
been transferred to the Issuer and
pledged to the Indenture Trustee unless
such Receivable has been paid in full or
repurchased.
(e) Access
to Records. The Depositor shall, upon reasonable notice, permit
the Issuer, the Agent, the Indenture
Trustee, the Servicer and their respective
agents at any time during normal business
hours to inspect, audit, and make
copies of and abstracts from the
Depositor's records regarding any Receivable.
(f) Other
Actions. The Depositor shall from time to time, at its expense,
promptly execute and deliver all further
instruments and documents (including,
without limitation, powers of attorney for
the benefit of the Servicer) and take
all further action that may be necessary or
desirable to permit the Servicer to
perform its obligations under this
Agreement, including, without limitation the
Servicer's obligation to preserve and
maintain the perfected security interest
of the Indenture Trustee in the
Receivables, the Financed Vehicles and the other
Deposited Assets.
Section
5.02. Other Liens or Interest. Except for the transfers
hereunder,
the Depositor will not sell, pledge, assign
or transfer to any other person, or
grant, create, incur, assume or suffer to
exist any Lien on, any interest, and
the Depositor shall defend the right,
title, and interest of the Issuer in, to
and under the Initial Receivables and
Subsequent Receivables and
26
<PAGE>
other Deposited Assets against all claims
of third parties claiming through or
under the Depositor; provided, however,
that the Depositor's obligations under
this Section 5.02 shall terminate upon the
termination of the Indenture in
accordance with its terms.
Section
5.03. Principal Executive Office; Jurisdiction of Organization.
The Depositor shall maintain its principal
executive office, principal place of
business, location of all books and records
relating to the Receivables and
other Deposited Assets and sole
jurisdiction of organization at the locations
and in the jurisdiction, respectively, set
forth in Section 3.02(i).
Section
5.04. Costs and Expenses. The Depositor agrees to pay all
reasonable costs and disbursements in
connection with the perfection, as against
all third parties, of the transfer to the
Issuer of the Depositor's right, title
and interest in and to the Receivables and
the Deposited Assets and the pledge
thereof to the Indenture Trustee.
Section
5.05. No Waiver. The Depositor shall not waive any default,
breach, violation or event permitting
acceleration under the terms of any
Receivable; provided, however, nothing in
this Section 5.05 shall affect the
rights of and the restrictions on the
Servicer with respect to such matters as
set forth in this Agreement.
Section
5.06. Depositor's Records. The books and records of the
Depositor
will disclose that the Depositor
transferred the Receivables to the Issuer;
provided, however, the Depositor may show
the Receivables as assets of the
consolidated companies that include the
Contributor, the Depositor and the
Issuer as long as such financial statements
indicate the transfers consummated
hereunder, under the Contribution
Agreement, under each Contributor Assignment
and Depositor Assignment and under the
Indenture and indicate that such assets
will not be available to satisfy the claims
of any creditor of the Contributor
or the Depositor. In the event that the
Issuer shall be deemed a separate
taxable entity for federal income tax
purposes, the Contributor will file or
will cause to be filed all tax returns and
reports in a manner consistent with
the transfer to the Issuer of the
Receivables for federal income tax purposes.
Section
5.07. Cooperation by Depositor. (a) The Depositor will
cooperate
fully and in a timely manner with the
Issuer, the Servicer, the Agent and the
Indenture Trustee in connection with (i)
the filing of any claims with an
insurer or any agent of any insurer under
any Insurance Policy affecting an
Obligor or any of the Financed Vehicles;
(ii) supplying any additional
information as may be requested by the
Issuer, the Agent, the Servicer, the
Indenture Trustee or any such agent or
insurer in connection with the processing
of any such claim; and (iii) the execution
or endorsement of any check or draft
made payable to the Depositor representing
proceeds from any such claim. The
Depositor shall take all such actions as
may be requested by the Issuer, the
Servicer, the Agent or the Indenture
Trustee to protect the rights of the Issuer
or the Indenture Trustee on behalf of the
Noteholders in and to any proceeds
under any and all of the foregoing
insurance policies. The Depositor shall not
take or cause to be taken any action which
would impair the rights of the Issuer
or the Indenture Trustee on behalf of the
Noteholders in and to any proceeds
under any of the foregoing insurance
policies.
(b) The
Depositor shall, within one (1) Business Day of receipt
thereof,
endorse any check or draft payable to the
Depositor representing insurance
proceeds and in the event there are no
other payees on such check or draft,
forward, via hand delivery, such endorsed
check or
27
<PAGE>
draft to the Servicer for deposit into the
Local Bank Account (or, if the Backup
Servicer is acting as successor Servicer,
for deposit into the Backup Servicer
Account). The Depositor will hold in trust
and remit to the Local Bank Account
(or, if the Backup Servicer is acting as
successor Servicer, for deposit into
the Backup Servicer Account), within one
(1) Business Day of receipt thereof,
any funds received with respect to the
Receivables after the related Cutoff
Date.
Section
5.08. Notice of Breach. The Depositor shall notify in writing
the
Indenture Trustee, the Noteholders, the
Agent, and the Issuer promptly upon
becoming aware of any breach of the
representations and warranties or covenants
of the Depositor or the Issuer contained
herein or in any other Transaction
Documents.
Section
5.09. Liability of Depositor; Indemnities. The Depositor shall
be
liable in accordance herewith only to the
extent of the obligations specifically
undertaken by the Depositor under this
Agreement.
(i) The Depositor shall indemnify, defend, and hold harmless
the
Indenture
Trustee, the Agent, the Noteholders, the Servicer, the Backup
Servicer,
the Owner Trustee (as such and in its individual capacity) and
the Issuer
from and against any taxes (other than income or capital gains
taxes
related to the sale of the Notes) that may at any time be
asserted
against
the Indenture Trustee or the Issuer with respect to, as of the
Closing
Date (with respect to the Initial Receivables) and as of the
related
Funding Date (with respect to the Subsequent Receivables), the
sale of
the related Receivables to the Issuer or the issuance and
original
sale of
the Notes or asserted with respect to ownership of the
Receivables, including any sales, gross receipts, general
corporation,
tangible
personal property, privilege, or license taxes and costs and
expenses
in defending against the same.
(ii) The Depositor shall indemnify, defend, and hold harmless
the
Indenture
Trustee, the Agent, the Noteholders, the Servicer, the Backup
Servicer,
the Owner Trustee (as such and in its individual capacity) and
the Issuer and their
respective officers, directors, employees and agents,
from and
against any loss, liability, or expense incurred by reason of
the
Depositor's bad faith, willful misconduct or negligence in the
performance
of its
duties under this Agreement or any other Transaction Document
to
which it
is a party, or by reason of reckless disregard of the
Depositor's
obligations and duties under this Agreement or any other
Transaction
Document
to which it is a party, or the Depositor's violation of federal
or State
securities laws in connection with the initial sale of the
Notes.
(iii) The Depositor shall indemnify, defend, and hold harmless
the
Indenture
Trustee, the Agent, the Noteholders, the Servicer, the Backup
Servicer,
the Owner Trustee (as such and in its individual capacity) and
the Issuer
and their respective officers, directors, employees and agents,
from and
against any loss, liability, or expense incurred as a result of
third
party claims arising out of the events or facts giving rise to
a
breach of
the covenants or representations and warranties of the
Depositor
set forth
in Article V hereof and Section 3.02 hereof.
28
<PAGE>
Indemnification under this Section 5.09 shall survive the
termination of
this Agreement (or, in the case of
indemnification of the Indenture Trustee or
the Backup Servicer, shall survive the
resignation or removal of the Indenture
Trustee or Backup Servicer, respectively)
and shall include, without limitation,
reasonable fees and expenses of counsel and
expenses of litigation. If the
Depositor shall have made any indemnity
payment to the Indenture Trustee, the
Agent, the Noteholders, the Servicer, the
Backup Servicer, the Owner Trustee (as
such or in its individual capacity) or the
Issuer pursuant to this Section and
any such Person thereafter shall collect
any of such amounts from others, then
such Person shall repay such amounts to the
Depositor, without interest. If the
Depositor fails to indemnify any applicable
Person pursuant to this Section
5.09, then such Person shall notify the
Contributor of such failure and the
Contributor shall pay the amount of such
indemnification to the applicable
Person within two (2) Business Days of
receipt of such notice.
Notwithstanding anything to the contrary contained in this
Agreement, the
obligations of the Depositor under this
Section 5.09 are solely the corporate
obligations of the Depositor, and shall be
payable by the Depositor, as provided
in this Section 5.09. The Depositor shall
only be required to pay (a) any fees,
expenses, indemnities or other liabilities
that it may incur under this Section
5.09 to the extent the Depositor has funds
available that would be in excess of
amounts that would be necessary to pay the
debt and other obligations of the
Depositor incurred in accordance with the
Depositor's certificate of
incorporation and all financing documents
to which the Depositor is a party and
(b) any expenses, indemnities or other
liabilities that it may incur under this
Section 5.09 only to the extent it receives
funds designated for such purposes
or to the extent it has funds available
that would be in excess of amounts that
would be necessary to pay the debt and
other obligations of the Depositor
incurred in accordance with the Depositor's
certificate of incorporation and all
financing documents to which the Depositor
is a party. In addition, no amount
owing by the Depositor hereunder in excess
of the liabilities that it is
required to pay in accordance with the
preceding sentence shall constitute a
"claim" (as defined in Section 101(5) of
the Bankruptcy Code) against it. No
recourse shall be had for the payment of
any amount owing hereunder or for the
payment of any fee hereunder or any other
obligation of, or claim against, the
Depositor arising out of or based upon this
Section 5.09, against any
stockholder, employee, officer, agent,
director or authorized person of the
Depositor or of any Affiliate thereof
(other than with respect to any obligation
of the Contributor as set forth in the last
sentence of the foregoing
paragraph); provided, however, that the
foregoing shall not relieve any such
Person or entity of any liability they
might otherwise have as a result of
fraudulent actions or willful misconduct or
omissions taken by them.
Section
5.10. Merger or Consolidation of, or Assumption of the
Obligations
of, Depositor. Subject to Section 5.13
hereof, any Person (i) into which the
Depositor may be merged or consolidated,
(ii) resulting from any merger,
conversion, or consolidation to which the
Depositor shall be a party, (iii)
succeeding to the business of the
Depositor, or (iv) exercising control directly
or indirectly of the Depositor, which
Person in any of the foregoing cases
executes an agreement of assumption
acceptable, in their respective absolute
discretion, to each of the Agent and the
Indenture Trustee, to perform every
obligation of the Depositor under this
Agreement and the other Transaction
Documents to which the Depositor is a
party, will be the successor to the
Depositor under this Agreement without the
execution or filing of any document
or any further act on the part of any of
the parties to this Agreement;
provided, however, that (a) immediately
after giving effect to such transaction,
(1) no representation or warranty made
29
<PAGE>
pursuant to Section 3.02(a) would have been
breached (for purposes hereof, such
representations and warranties shall speak
as of the date of the consummation of
such transaction) and (2) no event that,
after notice or lapse of time, or both,
would become a Servicer Event of Default,
an Event of Default or a Termination
Event, shall have occurred and be
continuing, (b) the Depositor shall have
delivered to the Agent and the Indenture
Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such
consolidation, conversion, merger, or
succession and such agreement or assumption
comply with this Section and Section
5.13(iii) and that all conditions
precedent, if any, provided for in this
Agreement relating to such transaction have
been complied with, (c) the
Depositor shall have delivered to the Agent
and the Indenture Trustee an Opinion
of Counsel either (1) stating that, in the
opinion of such counsel, all
financing statements and continuation
statements and amendments thereto have
been executed and filed that are necessary
fully to preserve and protect the
interest of the Issuer and the Noteholders
in the Receivables, and reciting the
details of such filings, or (2) stating
that, in the opinion of such counsel, no
such action shall be necessary to preserve
and protect such interest, and (d)
the organizational documents of the Person
surviving or resulting from such
transaction shall contain provisions the
same in substantive effect as those of
the Depositor's articles of incorporation
in respect of the issuance of debt,
the independent director and bankruptcy
remoteness. The Depositor shall provide
written notice of any merger,
consolidation, conversion, or succession pursuant
to this Section and Section 5.13(iii) to
the Agent. Notwithstanding anything
herein to the contrary, the execution of
the foregoing agreement of assumption
and compliance with clauses (a) through (e)
above shall be conditions to the
consummation of the transactions referred
to in clauses (i), (ii), (iii) or (iv)
above.
Section
5.11. Limitation on Liability of Contributor, Depositor and
Others. Each of the Contributor and the
Depositor and any director or officer or
employee or agent of the Depositor or the
Contributor may rely in good faith on
the written advice of counsel, Opinion of
Counsel, Officer's Certificate, or on
any document of any kind, prima facie
properly executed and submitted by any
Person respecting any matters arising
hereunder. Neither the Contributor nor the
Depositor shall be under any obligation to
appear in, prosecute, or defend any
legal action that shall not be incidental
to its obligations under this
Agreement and that in its opinion may
involve it in any expense or liability;
provided, however, that the Contributor or
the Depositor, as the case may be,
may undertake any reasonable action that it
may in good faith deem necessary or
desirable in respect of this Agreement and
the rights and duties of the parties
to this Agreement and the interests of the
Noteholders under this Agreement. In
such event, the legal expenses and costs of
such action and any liability
resulting therefrom shall be
