Exhibit 10.5

SERVICING AGREEMENT

among

BANK OF AMERICA, NATIONAL ASSOCIATION,

as Servicer and as Custodian

BANK OF AMERICA AUTO TRUST 2010-2,

as Issuer

and

U.S. BANK NATIONAL ASSOCIATION,

as Indenture Trustee

Dated as of June 24, 2010

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ARTICLE I      DEFINITIONS AND USAGE    1       Section 1.1.   

Definitions

   1 ARTICLE II      SERVICER AS CUSTODIAN    1       Section 2.1.   

Custody of Receivable Files

   1       Section 2.2.   

Effective Period, Termination, and Amendment; Interpretive and Additional
Provisions

   2 ARTICLE III      ADMINISTRATION AND SERVICING OF RECEIVABLES AND PURCHASED
PROPERTY    3       Section 3.1.   

Duties of Servicer

   3       Section 3.2.   

Collection of Receivable Payments

   4       Section 3.3.   

Realization Upon Receivables

   5       Section 3.4.   

Allocations of Collections

   6       Section 3.5.   

Maintenance of Security Interests in Financed Vehicles

   6       Section 3.6.   

Covenants of Servicer

   6       Section 3.7.   

Purchase of Receivables Upon Breach by the Servicer

   6       Section 3.8.   

Servicing Fee and Supplemental Servicing Fee Payable to the Servicer

   7       Section 3.9.   

Annual Statement as to Compliance; Notice of Servicer Termination Event

   7       Section 3.10.   

Servicer Expenses

   8       Section 3.11.   

Annual Registered Public Accounting Firm Attestation Report

   8       Section 3.12.   

1934 Act Filings

   8       Section 3.13.   

Form 15.

   8 ARTICLE IV      DISTRIBUTIONS; STATEMENTS    9       Section 4.1.   

Deposits into Collection Account

   9       Section 4.2.   

Net Remittances; Retention of Servicing Fees

   9

      Section 4.3.

  

Statements to Issuer

   9 ARTICLE V      THE SERVICER    9       Section 5.1.   

Representations of Servicer

   9       Section 5.2.   

Indemnities of Servicer

   11       Section 5.3.   

Merger or Consolidation of, or Assumption of the Obligations of, Servicer

   11       Section 5.4.   

Limitation on Liability of Servicer and Others

   11       Section 5.5.   

Subservicer and Delegation of Duties

   12       Section 5.6.   

Servicer Not to Resign as Servicer

   12       Section 5.7.   

Servicer May Own Notes or Certificates

   12       Section 5.8.   

Sarbanes-Oxley Act Requirements

   13 ARTICLE VI      SERVICING TERMINATION    13       Section 6.1.   

Servicer Termination Events

   13       Section 6.2.   

Appointment of Successor Servicer

   14

 

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      Section 6.3.   

Notification to Noteholders and Certificateholders

   15       Section 6.4.   

Waiver of Past Servicer Termination Events

   15       Section 6.5.   

Termination

   16       Section 6.6.   

Optional Purchase of All Receivables

   16 ARTICLE VII      MISCELLANEOUS PROVISIONS    16       Section 7.1.   

Amendment

   16       Section 7.2.   

Counterparts

   17       Section 7.3.   

GOVERNING LAW

   18       Section 7.4.   

Submission to Jurisdiction; Waiver of Jury Trial

   18       Section 7.5.   

Headings and Cross-References

   18       Section 7.6.   

Notices

   18       Section 7.7.   

Severability of Provisions

   18       Section 7.8.   

Further Assurances

   19       Section 7.9.   

Waivers

   19       Section 7.10.   

Cumulative Remedies

   19       Section 7.11.   

Third-Party Beneficiaries

   19       Section 7.12.   

Nonpetition Covenant

   19       Section 7.13.   

Limitation of Liability

   19       Section 7.14.   

Regulation AB

   20       Section 7.15.   

Information to Be Provided by the Indenture Trustee

   20       Section 7.16.   

Form 8-K Filings

   21       Section 7.17.   

Indemnification

   21

 

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EXHIBIT A   

FORM OF MONTHLY SERVICER REPORT

EXHIBIT B    SERVICING CRITERIA TO BE ADDRESSED IN INDENTURE TRUSTEE’S
ASSESSMENT OF COMPLIANCE EXHIBIT C   

FORM OF INDENTURE TRUSTEE’S ANNUAL CERTIFICATION

 

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This SERVICING AGREEMENT, (as amended, modified or supplemented from time to
time, this “Agreement”), is made as of June 24, 2010 among Bank of America,
National Association, a national banking association (“BANA”), as servicer (in
such capacity, the “Servicer”) and as custodian (in such capacity, the
“Custodian”), Bank of America Auto Trust 2010-2, a Delaware statutory trust, as
issuer (the “Issuer”), and U.S. Bank National Association, a national banking
association, as indenture trustee (the “Indenture Trustee” and together with the
Servicer, the Custodian, the Indenture Trustee and the Issuer, the “Parties” and
each a “Party”).

1. The Issuer purchased a specified portfolio of receivables consisting of motor
vehicle installment loans and retail installment sales contracts and related
property from Bank of America Auto Receivables Securitization, LLC, a Delaware
limited liability company (the “Depositor”).

2. The Servicer is willing to service, on behalf of the Issuer, the Receivables.

3. The Servicer is willing to act as the custodian, on behalf of the Issuer, of
the Receivables and related property.

In consideration of the foregoing, other good and valuable consideration, and
the mutual terms and covenants contained herein, the Parties hereto agree as
follows:

ARTICLE I

DEFINITIONS AND USAGE

Section 1.1. Definitions. Certain capitalized terms used in the above recitals
and in this Agreement are defined in and shall have the respective meanings
assigned to them in Appendix A to the Sale Agreement, dated as of the Closing
Date, as amended, modified or supplemented from time to time, between the
Depositor and the Issuer. All references herein to “the Agreement” or “this
Agreement” are to this Servicing Agreement as it may be amended, supplemented or
modified from time to time, the exhibits and attachments hereto and the
capitalized terms used herein which are defined in such Appendix A, and all
references herein to Articles, Sections and subsections are to Articles,
Sections or subsections of this Agreement unless otherwise specified. The rules
of construction and usage set forth in such Appendix A shall be applicable to
this Agreement.

ARTICLE II

SERVICER AS CUSTODIAN

Section 2.1. Custody of Receivable Files. To assure uniform quality in servicing
the Receivables and to reduce administrative costs, the Indenture Trustee, upon
the execution and delivery of this Agreement, hereby revocably appoints BANA to
act as Custodian, and BANA hereby accepts such appointment, to act solely as the
agent for the Indenture Trustee, as pledgee of the Issuer and as custodian of
the following documents or instruments, which are hereby constructively
delivered to the Indenture Trustee, as pledgee of the Issuer pursuant to the

 

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Indenture (collectively, the “Receivable Files”) with respect to each Receivable
(but only to the extent applicable to such Receivable and only to the extent
held in tangible paper form):

(a) the fully executed original of the installment sale contract or the
promissory note and security agreement, as applicable, for such Receivable (with
respect to tangible chattel paper) or an “authoritative copy” (as such term is
used in Section 9-105 of the UCC) of the Receivable (with respect to electronic
chattel paper) or, if no such original executed Receivable or authoritative copy
exists, a copy thereof, including any written amendment or extensions thereto;
provided, however, that an authoritative copy may be held by a third party
service provider;

(b) the original credit application, an electronic image thereof or a photocopy
thereof to the extent held in paper form;

(c) the original Certificate of Title for the related Financed Vehicle (or
evidence that such certificate of title has been applied for) or such other
documents (electronic or otherwise, as used in the applicable jurisdiction) that
the Servicer will keep on file, in accordance with its normal policies and
procedures, evidencing the security interest of BANA, as first lienholder or
secured party, in such Financed Vehicle; provided, however, that in lieu of
being held in the Receivable File, the Certificate of Title may be held by a
third party service provider engaged by the servicer to obtain or to hold the
Certificate of Title; and

(d) any and all other documents that the Servicer keeps on file in accordance
with its Customary Servicing Practices relating to the individual Receivable,
Obligor or Financed Vehicle.

The Issuer and the Indenture Trustee shall have no responsibility to monitor the
Servicer’s performance as custodian and shall have no liability in connection
with the Servicer’s performance of such duties hereunder.

The Custodian hereby acknowledges receipt of the Receivable Files for each
Receivable listed on the Schedule of Receivables.

Section 2.2. Effective Period, Termination, and Amendment; Interpretive and
Additional Provisions. The Servicer’s appointment as Custodian has become
effective as of the Cut-Off Date and will continue in full force and effect
until terminated as herein provided. The Servicer shall not resign from the
obligations and duties imposed on it by this Agreement as Custodian except upon
the reasonable determination by the Servicer that the performance of its duties
herein is no longer permissible under applicable law. No such resignation shall
become effective until a successor Custodian shall have assumed the
responsibilities and obligations of the Custodian in accordance with
Section 6.2. If BANA resigns as Servicer in accordance with the provisions of
this Agreement or if all of the rights and obligations of the Servicer are
terminated under Section 6.1, the appointment of the Servicer as Custodian
hereunder will be terminated. As soon as practicable after any termination under
this Section 2.2 the Custodian at its expense will deliver to the Indenture
Trustee or the Indenture Trustee’s designee, the Receivable Files and the
related accounts and Records maintained by the Custodian at such place or places
as the Indenture Trustee may reasonably designate provided, however, that with
respect

 

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to authoritative copies of the Receivables constituting electronic chattel
paper, the Servicer, as Custodian, in its sole discretion, shall either
(i) continue to hold any such authoritative copies on behalf of the Issuer and
the Indenture Trustee or the Indenture Trustee’s agent or (ii) deliver copies of
such authoritative copies and destroy the authoritative copies maintained by the
Servicer prior to its termination such that such copy delivered to the Indenture
Trustee or the Indenture Trustee’s agent becomes the authoritative copy of the
Receivable constituting electronic chattel paper.

ARTICLE III

ADMINISTRATION AND SERVICING OF

RECEIVABLES AND PURCHASED PROPERTY

Section 3.1. Duties of Servicer. Effective as of the Cut-Off Date, the Servicer
is hereby appointed and authorized to act as agent for the Issuer and in such
capacity shall manage, service, administer, make collections on, and make
remittances with respect to, the Receivables in accordance with its Customary
Servicing Practices, using that degree of skill and attention that the Servicer
exercises with respect to comparable automotive receivables that it services for
itself or others. The Servicer hereby accepts such appointment and authorization
and agrees to perform the duties of Servicer set forth herein. The Servicer’s
duties shall include tracking the balances of outstanding Receivables, notifying
Obligors of the amounts and due dates of their required payments, communicating
with Obligors regarding their accounts and seeking to collect overdue payments.
The Servicer is not required under the Transaction Documents to make any
disbursements via wire transfer or otherwise on behalf of an Obligor. There are
no requirements under the Receivables or the Transaction Documents for funds to
be, and funds shall not be, held in trust for an Obligor. No payments or
disbursements shall be made by the Servicer on behalf of an Obligor. Subject to
the provisions of Section 3.2, the Servicer shall follow its Customary Servicing
Practices and shall have full power and authority, acting alone, to do any and
all things in connection with such managing, servicing, administration and
collection that it may deem necessary or desirable. Without limiting the
generality of the foregoing, the Servicer is hereby authorized and empowered,
pursuant to this Section 3.1, to execute and deliver, on behalf of itself or the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholder, or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and the Financed
Vehicles. The Servicer is hereby authorized to commence, in its own name or in
the name of the Issuer, a legal Proceeding to enforce a Receivable as
contemplated by Section 3.3, to enforce all obligations or participate in a
legal Proceeding (including without limitation a bankruptcy Proceeding) relating
to or involving a Receivable including a Defaulted Receivable. If the Servicer
commences or participates in such a legal Proceeding in its own name, the
Servicer is hereby authorized and empowered by the Issuer pursuant to this
Section 3.1 to obtain possession of the related Financed Vehicle and immediately
and without further action on the part of the Issuer or the Servicer, the Issuer
shall thereupon automatically assign in trust such Receivable and the security
interest in the related Financed Vehicle to the Servicer for the benefit of the
Issuer for purposes of commencing or participating in any such Proceeding as a
party or claimant. Upon such automatic assignment, the Servicer will be, and
will have all the rights and duties of, a secured party under the UCC and other
applicable law with respect to such Receivable and the related Financed Vehicle.
At the

 

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Servicer’s request from time to time, the Issuer shall provide the Servicer with
evidence of the assignment in trust for the benefit of the Issuer, as
applicable, as may be reasonably necessary for the Servicer to take any of the
actions set forth in the following sentence. The Servicer is hereby authorized
and empowered by the Issuer and the Indenture Trustee to execute and deliver in
the Servicer’s name any notices, demands, claims, complaints, responses,
affidavits or other documents or instruments in connection with any such
Proceeding. If in any enforcement suit or legal proceeding it shall be held that
the Servicer may not enforce a Receivable on the grounds that it shall not be a
real party in interest or a holder entitled to enforce such Receivable, the
Issuer shall, at the Servicer’s expense and direction, take steps to enforce
such Receivable, including bringing suit in the name of the Issuer. The Issuer
shall furnish the Servicer with any powers of attorney and other documents and
take any other steps which the Servicer may deem necessary or appropriate to
enable the Servicer to carry out its duties herein. Except to the extent
required by the preceding two sentences, the authority and rights granted to the
Servicer in this Section 3.1 shall be nonexclusive and shall not be construed to
be in derogation of the retention by the Issuer or the Indenture Trustee of
equivalent authority and rights.

Section 3.2. Collection of Receivable Payments. (a) The Servicer will make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same become due in accordance with
its Customary Servicing Practices. Subject to clause (b) of this Section and
Section 3.6, the Servicer may grant waivers, extensions, deferrals, alterations,
amendments, modifications or adjustments with respect to any Receivable in
accordance with its Customary Servicing Practices; provided, however, that if
the Servicer (i) extends the date for final payment by the Obligor of any
Receivable beyond the last day of the Collection Period preceding the Final
Scheduled Payment Date for the latest maturing Class of Notes (such extension, a
“Post-Maturity Term Extension”), or (ii) reduces the Annual Percentage Rate or
the Amount Financed with respect to any Receivable (such reduction, a “Reduction
Event”) other than as required by applicable law (including, without limitation,
by the Servicemembers Civil Relief Act) or by court order it will promptly
purchase such Receivable in the manner provided in Section 3.7; provided,
further, that the Servicer shall not make any modification described in the
preceding proviso that would trigger a purchase pursuant to the above provisions
or pursuant to Section 3.7, in either case for the sole purpose of enabling the
Servicer to purchase a Receivable from the Issuer. The Servicer shall not be
required to make any advances of funds or guarantees regarding collections, cash
flows or distributions. Payments on the Receivables, including payoffs, made in
accordance with the related documentation for such Receivables, shall be posted
to the Servicer’s records related to such Receivables in accordance with the its
Customary Servicing Practices. Such payments shall be allocated to principal,
interest or other items in accordance with the related documentation for such
Receivables.

(b) Notwithstanding anything in Section 3.2(a) to the contrary, the Servicer may
grant extensions, deferrals, amendments, modifications or adjustments with
respect to any Receivable only if at least one of the following conditions has
been satisfied: (i) any such extension, deferral, amendment, modification or
adjustment is administrative, promotional or ministerial in nature (for example,
the change is to the payment due date of a Receivable); (ii) the Obligor is in
payment default or, in the judgment of the Servicer, it is reasonably
foreseeable that the Obligor will default (it being understood that the Servicer
may proactively contact any Obligor whom the Servicer believes may be at higher
risk of a payment default under the related Receivable (for

 

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example, in connection with natural disasters impacting the geographic region in
which such Obligor resides)); (iii) the Obligor has notified the Servicer of a
financial difficulty that impacts such Obligor’s ability to make a scheduled
payment on time; or (iv) any such extension, deferral, amendment, modification
or adjustment is a “payment holiday” or “skip-a-pay” extension granted to an
Obligor in accordance with the Servicer’s Customary Servicing Practices.

(c) The Servicer may in its discretion waive any late payment charge or any
other fees that may be collected in the ordinary course of servicing a
Receivable.

(d) The Servicer shall distribute to the applicable Obligor any rebates or
refunds of premiums with respect to the cancellation or termination of any
insurance policy, extended warranty or service contract required by law or
contract to be returned to such Obligor (but only to the extent such amounts are
actually received by the Servicer).

(e) Records documenting collection efforts with respect to any Receivable shall
be maintained by the Servicer during the period a Receivable is delinquent in
accordance with the Servicer’s Customary Servicing Practices. Such records shall
be maintained on at least a periodic basis that is not less frequent than the
Servicer’s Customary Servicing Practices, and describe the entity’s activities
in monitoring delinquent pool assets including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is deemed
temporary (e.g., illness or unemployment) in accordance with the Servicer’s
Customary Servicing Practices.

(f) The Servicer shall not be required to maintain a fidelity bond or errors and
omissions policy.

Section 3.3. Realization Upon Receivables. On behalf of the Issuer, the Servicer
shall use commercially reasonable efforts, consistent with its Customary
Servicing Practices, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer has determined
eventual payment in full is unlikely unless it determines in its sole discretion
that repossession will not increase the Liquidation Proceeds by an amount
greater than the expense of such repossession or that the proceeds ultimately
recoverable with respect to such Receivable would be increased by forbearance.
The Servicer is authorized to follow such Customary Servicing Practices as it
follows in its servicing of comparable motor vehicle receivables, which
practices, policies and procedures may include selling the Financed Vehicles at
public or private sale and other actions by the Servicer in order to realize
upon such a Receivable. The foregoing is subject to the provision that, in any
case in which the Financed Vehicle shall have suffered damage, the Servicer
shall not be required to expend funds in connection with any repair or towards
the repossession of such Financed Vehicle unless it shall reasonably determine
in its discretion that such repair and/or repossession shall increase the
proceeds of liquidation of the related Receivable by an amount greater than the
amount of such expenses. After repossession of a Financed Vehicle, the Servicer
shall in accordance with its Customary Servicing Practices sell such Financed
Vehicle in a public or private sale as soon as is practicable after
repossession, subject to any applicable laws. The Servicer is authorized to take
any and all actions necessary or appropriate on behalf of the Issuer to evidence
the sale of the Financed Vehicle at public or private sale free from any Lien or
other interest of the Issuer or the Indenture Trustee. The Servicer shall be
entitled to receive Liquidation Expenses with respect to

 

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each Defaulted Receivable at such time as the Receivable becomes a Defaulted
Receivable from the related Liquidation Proceeds.

If the Depositor purchases any Deficiency Balance pursuant to Section 3.7(b) of
the Sale Agreement, net proceeds of any such sale allocable to the related
Receivable will constitute Liquidation Proceeds, and the sole right of the
Issuer and the Indenture Trustee with respect to any such Receivable will be to
receive such Liquidation Proceeds. Upon such sale, (i) the Indenture Trustee
shall release the lien on any Deficiency Balance sold to the Depositor and
(ii) the Servicer will mark its computer records indicating that any such
Receivable has been sold.

Section 3.4. Allocations of Collections. If an Obligor is obligated under one or
more Receivables and also under one or more other assets owned by the Servicer
or assigned to a third party, then any payment on any such asset received from
or on behalf of such Obligor will, if identified as being made with respect to a
particular item or asset, be applied to such item, and otherwise will be
allocated by the Servicer in accordance with its Customary Servicing Practices.

Section 3.5. Maintenance of Security Interests in Financed Vehicles. The
Servicer shall, in accordance with its Customary Servicing Practices and at its
own expense, take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle. It
is understood that the Financed Vehicles are the collateral and security for the
Receivables, but that the Certificate of Title with respect to a Financed
Vehicle does not constitute collateral and merely evidences such security
interest. The Issuer hereby authorizes the Servicer to re-perfect such security
interest on behalf of the Issuer and the Indenture Trustee, as necessary because
of the relocation of a Financed Vehicle, or for any other reason.

Section 3.6. Covenants of Servicer. Unless required by law (including, without
limitation, by the Servicemembers Civil Relief Act) or court order, the Servicer
will not release the Financed Vehicle securing each such Receivable from the
security interest granted by such Receivable in whole or in part except (i) in
the event of payment in full by or on behalf of the Obligor thereunder or
payment in full less a deficiency which the Servicer would or would not attempt
to collect in accordance with its Customary Servicing Practices, (ii) in
connection with repossession or (iii) except as may be required by an insurer in
order to receive proceeds from any Insurance Policy covering such Financed
Vehicle.

Section 3.7. Purchase of Receivables Upon Breach by the Servicer. Upon discovery
by any party to this Agreement of (i) a Post-Maturity Term Extension or a
Reduction Event as contemplated by Section 3.2 or (ii) a breach of any of the
covenants set forth in Sections 3.5 or 3.6 that materially and adversely affects
the interest of the Noteholders, the party discovering such event described in
clause (i) or (ii) herein shall give prompt written notice thereof to the other
party hereto; provided, that delivery of the Monthly Servicer Report, which
identifies Receivables that are being or have been purchased, shall be deemed to
constitute prompt notice of such event; provided, further, the failure to give
such notice shall not affect any obligation of the Servicer hereunder. If
(i) either a Post-Maturity Term Extension or Reduction Event occurs with respect
to any Receivable or (ii) a breach of any of the covenants set forth in
Sections 3.5 or 3.6 materially and adversely affects the interests of the
Noteholders, then the Servicer shall either (i) correct or cure such breach or
(ii) purchase such Receivable from the holder thereof, in either

 

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case on or before the last day of the second Collection Period (or, at the
option of the Servicer, the last day of the first Collection Period) following
the date the Servicer became aware of or was notified of such breach. Any such
breach or failure of the covenants set forth in Sections 3.5 or 3.6 will be
deemed to not have a material and adverse effect if such breach or failure does
not affect the ability of the Issuer (or its assignee) to collect, receive and
retain timely payment in full on such Receivable, including Liquidation
Proceeds. Any such purchase by the Servicer shall be at a price equal to the
related Repurchase Price. In consideration for such purchase, the Servicer shall
make a payment to the Issuer equal to the Repurchase Price by depositing such
amount into the Collection Account on the Business Day prior to the Payment Date
immediately following the date of such repurchase. Upon receipt by the Issuer of
such Repurchase Price by the Servicer, the Issuer shall (and shall cause the
Indenture Trustee to) release and execute and deliver such instruments of
release, transfer or assignment, in each case without recourse or
representation, as may be reasonably requested by the Servicer to evidence such
release, transfer or assignment or more effectively vest in the Servicer or its
designee all of the Issuer’s rights (and, if applicable, the Indenture Trustee’s
rights and security interest) in any Receivable and related Purchased Assets
repurchased pursuant to this Section 3.7. It is understood and agreed that the
right to cause the Servicer to purchase any Receivable as described above shall
constitute the sole remedy (except as provided in Section 5.2 of this Agreement)
against the Servicer for such breach available to the Issuer.

Section 3.8. Servicing Fee and Supplemental Servicing Fee Payable to the
Servicer. (a) Servicing Fee. To compensate the Servicer for services rendered
under this Agreement and the other Transaction Documents, the Issuer will pay
the Servicer the Servicing Fee from the Cut-Off Date until the earliest to occur
of:

 

  (i) resignation of the Servicer pursuant to Section 5.6;

 

  (ii) termination of the Servicer pursuant to Section 6.2; or

 

  (iii) the Termination Date (as defined in Section 6.5).

Such Servicing Fee will be payable by the Issuer on each Payment Date in
accordance with Sections 5.4(b) and 8.4(a) of the Indenture.

(b) Supplemental Servicing Fee. In addition to the Servicing Fee, and as
additional compensation for its services rendered under this Agreement, the
Servicer will be entitled to retain any late fees, prepayment charges, extension
fees and other administrative fees and expenses or similar charges allowed by
applicable law collected (from whatever source) on the Receivables during each
Collection Period (such amounts, the “Supplemental Servicing Fee”).

Section 3.9. Annual Statement as to Compliance; Notice of Servicer Termination
Event. (a) So long as the Depositor is filing any reports with respect to the
Issuer under the Exchange Act, the Servicer will deliver to the Issuer, with a
copy to the Indenture Trustee, on or before March 30 of each year beginning
March 30, 2011, an Officer’s Certificate (with appropriate insertions),
providing such information as is required under Item 1123 of Regulation AB.

 

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(b) The Servicer will deliver to the Issuer, with a copy to the Indenture
Trustee and the Administrator promptly after having obtained knowledge thereof,
notice of the occurrence of any Servicer Termination Event. Except to the extent
set forth in this Sections 3.9(b), 6.3 and 7.16 of this Agreement and Sections
3.12 and 6.5 of the Indenture, the Transaction Documents do not require any
policies or procedures to monitor any performance or other triggers and Events
of Default.

(c) So long as the Depositor is filing any reports with respect to the Issuer
under the Exchange Act, the Servicer will deliver to the Issuer, on or before
March 30 of each year, beginning on March 30, 2011, a report regarding the
Servicer’s assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, including disclosure of any material
instance of non-compliance identified by the Servicer, as required under
paragraph (b) of Rule 13a-18, Rule 15d-18 of the Exchange Act and Item 1122 of
Regulation AB.

Section 3.10. Servicer Expenses. Subject to any limitations on the Servicer’s
liability herein, the Servicer will be required to pay all expenses incurred by
it in connection with its activities hereunder, including fees, expenses and
disbursements of any independent accountants and taxes imposed on the Servicer,
except expenses incurred in realizing upon Receivables under Section 3.3.

Section 3.11. Annual Registered Public Accounting Firm Attestation Report. So
long as the Depositor is filing any reports with respect to the Issuer under the
Exchange Act, on or before March 30th of each year, beginning March, 30, 2011,
the Servicer shall cause a registered public accounting firm, who may also
render other services to the Servicer or to its Affiliates, to furnish to the
Servicer and the Depositor, each attestation report on assessments of compliance
with the Servicing Criteria with respect to the Servicer or any Affiliate
thereof during the related fiscal year delivered by such accountants pursuant to
paragraph (c) of Rule 13a-18 or Rule 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. The certification required by this paragraph may be replaced by
any similar certification using other procedures or attestation standards which
are now or in the future in use by servicers of comparable assets, or which
otherwise comply with any rule, regulation, “no action” letter or similar
guidance promulgated by the Commission.

Section 3.12. 1934 Act Filings. The Issuer hereby authorizes the Servicer and
the Depositor, or either of them, to prepare, sign, certify and file any and all
reports, statements and information respecting the Issuer and/or the Notes
required to be filed pursuant to the Exchange Act and the rules thereunder.

Section 3.13. Form 15. The Depositor shall file a Form 15 (or applicable
successor form) to suspend the Depositor’s reporting obligations with respect to
the Issuer under the Exchange Act as soon as legally permissible (absent a
change in circumstances making such a filing, in the judgment of the Depositor,
imprudent).

 

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ARTICLE IV

DISTRIBUTIONS; STATEMENTS

Section 4.1. Deposits into Collection Account.

(a) If the Monthly Remittance Condition is satisfied with respect to the
Servicer, then on the Business Day prior to each Payment Date, the Servicer
shall remit into the Collection Account an amount equal to all Collections on
the Receivables received by the Servicer during the related Collection Period;
provided, however, that such remittance may be made net of Servicing Fees and
unpaid Servicing Fees in accordance with Section 4.2(b). Pending deposit in the
Collection Account, Collections may be used by the Servicer at its own risk and
are not required to be segregated from its own funds.

(b) If the Monthly Remittance Condition is not satisfied with respect to the
Servicer, then the Servicer shall deposit an amount equal to all Collections on
the Receivables received by the Servicer into the Collection Account within two
Business Days of identification by the Servicer.

Section 4.2. Net Remittances; Retention of Servicing Fees. (a) Supplemental
Servicing Fees may be retained by the Servicer, and need not be deposited into
the Collection Account.

(b) The amount deposited in the Collection Account may be net of the Servicing
Fee and any unpaid Servicing Fee owed to the Servicer, provided, however, that
such amounts will be listed separately on the Monthly Servicer Report as if such
amounts were distributed to the Servicer separately.

(c) The Servicer may select Eligible Investments with respect to funds on
deposit in the Collection Account and the Reserve Account in accordance with
Section 8.3 of the Indenture.

Section 4.3. Statements to Issuer. On or before each Determination Date, the
Servicer will deliver to the Issuer and the Indenture Trustee with respect to
all of the Receivables on an aggregate basis a monthly servicer report
substantially in the form attached hereto as Exhibit A (each, a “Monthly
Servicer Report”). The Indenture Trustee shall not be responsible for verifying
or confirming the accuracy of the information provided to it by or at the
direction of the Servicer. No disbursements shall be made directly by the
Servicer to a Noteholder, and the Servicer shall not be required to maintain any
investor record relating to the posting of disbursements or otherwise.

ARTICLE V

THE SERVICER

Section 5.1. Representations of Servicer. The Servicer makes the following
representations as of the Cut-Off Date and as of the Closing Date:

(a) Existence and Power. The Servicer is a national banking association validly
existing and in good standing under the laws of the United States and has, in
all material

 

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respects, full power and authority to own its assets and operate its business as
presently owned or operated, and to execute, deliver and perform its obligations
under the Transaction Documents to which it is a party or affect the
enforceability or collectibility of the Receivables or any other part of the
Purchased Assets. The Servicer has obtained all necessary licenses and approvals
in each jurisdiction where the failure to do so would materially and adversely
affect the ability of the Servicer to perform its obligations under the
Transaction Documents or affect the enforceability or collectibility of the
Receivables or any other part of the Purchased Assets.

(b) Authorization and No Contravention. The execution, delivery and performance
by the Servicer of the Transaction Documents to which it is a party have been
duly authorized by all necessary action on the part of the Servicer and do not
contravene or constitute a default under (i) any applicable law, rule or
regulation, (ii) its organizational documents or (iii) any material indenture or
material agreement or instrument to which the Servicer is a party or by which
its properties are bound (other than violations of such laws, rules,
regulations, indentures or agreements which do not affect the legality, validity
or enforceability of any of such agreements and which, individually or in the
aggregate, would not materially and adversely affect the transactions
contemplated by, or the Servicer’s ability to perform its obligations under, the
Transaction Documents).

(c) No Consent Required. No approval or authorization by, or filing with, any
Governmental Authority is required in connection with the execution, delivery
and performance by the Servicer of any Transaction Document other than (i) UCC
filings, (ii) approvals and authorizations that have previously been obtained
and filings that have previously been made and (iii) approvals, authorizations
or filings which, if not obtained or made, would not have a material adverse
effect on the enforceability or collectibility of the Receivables or any other
part of the Purchased Assets or would not materially and adversely affect the
ability of the Servicer to perform its obligations under the Transaction
Documents.

(d) Binding Effect. Each Transaction Document to which the Servicer is a party
constitutes the legal, valid and binding obligation of the Servicer enforceable
against the Servicer in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship or other similar laws affecting the enforcement of
creditors’ rights generally and, if applicable, the rights of creditors of
national banks from time to time in effect or by general principles of equity.

(e) No Proceedings. There are no actions, orders, suits or Proceedings pending
or, to the knowledge of the Servicer, threatened against the Servicer before or
by any Governmental Authority that (i) assert the invalidity or unenforceability
of this Agreement or any of the other Transaction Documents, (ii) seek 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) seek any determination or ruling that would materially and adversely
affect the performance by the Servicer of its obligations under this Agreement
or any of the other Transaction Documents or have a material adverse effect on
the Noteholders or (iv) relating to the Servicer that would materially and
adversely affect the federal or Applicable Tax State income, excise, franchise
or similar tax attributes of the Notes.

 

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Section 5.2. Indemnities of Servicer. The Servicer shall be liable in accordance
with this Agreement only to the extent of the obligations in this Agreement
specifically undertaken by the Servicer. Such obligations shall include the
following:

(a) The Servicer will compensate and indemnify the Indenture Trustee to the
extent and subject to the conditions set forth in Section 6.7 of the Indenture.
The Servicer will compensate and indemnify the Owner Trustee to the extent and
subject to the conditions set forth in Section 8.1 and 8.2 of the Trust
Agreement. The Servicer will compensate and indemnify the Administrator to the
extent and subject to the conditions set forth in Section 3 of the
Administration Agreement.

(b) The Servicer shall defend, indemnify and hold harmless the Issuer, the Owner
Trustee, the Indenture Trustee, the Noteholders, the Certificateholder and the
Depositor from and against any and all costs, expenses, losses, damages, claims
and liabilities, arising out of or resulting from the use, ownership or
operation by the Servicer or any Affiliate thereof of a Financed Vehicle.

(c) Indemnification under this Section 5.2 by Servicer (or any successor
thereto) pursuant to Sections 5.3 and 5.6, as Servicer, with respect to the
period such Person was the Servicer, shall survive the termination of such
Person as Servicer or a resignation by such Person as Servicer as well as the
termination of this Agreement or the resignation or removal of the Owner Trustee
or the Indenture Trustee and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Servicer shall have made any
indemnity payments pursuant to this Section 5.2 and the Person to or on behalf
of whom such payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to the Servicer, without
interest.

Section 5.3. Merger or Consolidation of, or Assumption of the Obligations of,
Servicer. Any corporation or other entity (a) into which the Servicer may be
merged or consolidated, (b) resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, (c) succeeding to the
business of the Servicer, or (d) more than 50% of the voting stock (or, if not a
corporation, other voting interests) of which is owned directly or indirectly by
BAC, which corporation or other entity in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Servicer under the
Transaction Documents, shall be the successor to the Servicer under the
Transaction Documents without the execution or filing of any paper or any
further act on the part of any of the Parties to this Agreement, anything in the
Transaction Documents to the contrary notwithstanding. The Servicer shall
provide notice of any merger, consolidation or succession pursuant to this
Section 5.3 to the Issuer and the Indenture Trustee.

Section 5.4. Limitation on Liability of Servicer and Others. (a) None of the
Servicer, the Custodian or any of the directors, officers, employees or agents
of the Servicer or the Custodian shall be under any liability to the Indenture
Trustee, the Issuer, the Noteholders or any other Person for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers, unless the Servicer’s or Custodian’s conduct, as applicable,
constitutes willful misconduct, negligence or bad faith. The Servicer, the
Custodian and any director, officer or employee or agent of the Servicer or the
Custodian may reasonably

 

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rely in good faith on the advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement or under the other Transaction Documents.

(b) Except as provided in this Agreement, neither the Servicer nor the Custodian
shall be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its duties to service, or with respect to custody of,
the Receivables in accordance with this Agreement and that in its opinion may
involve it in any expense or liability; provided, however, that the Servicer or
the Custodian may undertake any reasonable action that it may deem necessary or
desirable in respect of the Transaction Documents and the rights and duties of
the Parties to the Transaction Documents and the interests of the Issuer in the
Transaction Documents. In such event, the legal expenses and costs for such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Servicer except to the extent otherwise provided herein.

Section 5.5. Subservicer and Delegation of Duties. The Servicer may, at any time
without notice or consent, delegate (a) any or all of its duties (including,
without limitation, its duties as Custodian) under the Transaction Documents to
any of its Affiliates or (b) specific duties (including, without limitation, its
duties as Custodian) to sub-contractors who are in the business of performing
such duties; provided, that no such delegation or subcontracting will relieve
the Servicer of its responsibilities with respect to such duties as to which the
Servicer will remain primarily responsible with respect thereto and the Servicer
will be solely responsible for the fees of any such sub-contractors. For any
servicing activities delegated to third parties in accordance with this
Section 5.5, the Servicer shall follow such policies and procedures to monitor
the performance of such third parties and compliance with such servicing
activities as the Servicer follows with respect to comparable motor vehicle
receivables serviced by the Servicer for its own account.

Section 5.6. Servicer Not to Resign as Servicer. Subject to the provisions of
Section 5.3, the Servicer shall not resign from its obligations and duties under
this Agreement except upon the mutual consent of the Servicer, the Indenture
Trustee and the Issuer or upon its determination that the performance of its
duties under this Agreement shall no longer be permissible under applicable law.
Notice of any such determination permitting the resignation of the Servicer
shall be communicated to the Owner Trustee and the Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Issuer, and the Indenture Trustee concurrently with or promptly
after such notice. No such resignation shall become effective until the
Indenture Trustee or a successor Servicer shall have (i) taken the actions
required by Section 6.2, (ii) assumed the responsibilities and obligations of
the Servicer and (iii) provided in writing the information reasonably requested
by the Depositor to comply with its reporting obligation under the Exchange Act
with respect to any replacement Servicer.

Section 5.7. Servicer May Own Notes or Certificates. The Servicer, and any
Affiliate of the Servicer, may, in its individual or any other capacity, become
the owner or pledgee of Notes or Certificates with the same rights as it would
have if it were not the Servicer or an Affiliate thereof, except as otherwise
expressly provided herein or in the other Transaction

 

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Documents. Except as set forth herein or in the other Transaction Documents,
Notes and Certificates so owned by or pledged to the Servicer or such Affiliate
shall have an equal and proportionate benefit under the provisions of this
Agreement, without preference, priority or distinction as among all of the Notes
and Certificates, except as specifically provided for in the Transaction
Documents.

Section 5.8. Sarbanes-Oxley Act Requirements. To the extent any documents are
required to be filed or any certification is required to be made with respect to
the Issuer or the Notes pursuant to the Sarbanes-Oxley Act, the Issuer hereby
authorizes the Servicer and the Depositor, or either of them, to prepare, sign,
certify and file any such documents or certifications on behalf of the Issuer.

ARTICLE VI

SERVICING TERMINATION

Section 6.1. Servicer Termination Events. (a) If any one or more of the
following events (“Servicer Termination Event”) shall occur and be continuing:

(i) any failure by the Servicer to deliver to the Indenture Trustee any payment
required to be so delivered by the Servicer under the terms of this Agreement
that shall continue unremedied for a period of ten (10) Business Days after
written notice of such failure is received by the Servicer from the Issuer or
the Indenture Trustee; or

(ii) failure on the part of the Servicer duly to observe or to perform in any
material respect any other covenants or agreements, as the case may be, set
forth in this Agreement, which failure shall (A) materially and adversely affect
the rights of Noteholders or Certificateholders and (B) continue unremedied for
a period of ninety (90) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (1) to the
Servicer by the Issuer or the Indenture Trustee or (2) to the Issuer, the
Indenture Trustee and the Servicer by the Noteholders of Notes evidencing not
less than a majority of the Note Balance amount of the Outstanding Notes or, if
no Notes are Outstanding, by holders of Certificates evidencing a majority of
the beneficial interest in the Issuer; or

(iii) the Servicer suffers a Bankruptcy Event;

provided, however, that if a delay in or failure of performance referred to
under clauses (i) or (ii) above was caused by force majeure or similar
occurrence the grace period in the applicable clause will be extended for an
additional thirty days;

provided, further, the existence or occurrence of any “material instance of
noncompliance” (within the meaning of Item 1122 of Regulation AB) shall not
create any presumption that any event in clauses (i), (ii) or (iii) above has
occurred;

then the Indenture Trustee (provided, that a Responsible Officer of the
Indenture Trustee shall have received written notice thereof) shall promptly
notify each Rating Agency, and in each and every case, so long as a Servicer
Termination Event shall not have been remedied, either the Indenture Trustee or
the holders of Notes evidencing not less than a majority of the principal

 

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amount of the Notes Outstanding (or, if no Notes are Outstanding, Holders of
Certificates evidencing at least a majority of the beneficial interest in the
Issuer), by notice then given in writing to the Servicer (and to the Indenture
Trustee and the Issuer if given by the Noteholders and to the Issuer if given by
the Certificateholders and in each case with a copy to the Rating Agencies) may
terminate all of the rights and obligations of the Servicer under this
Agreement. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Notes, the Certificates or the Trust Estate or otherwise, shall pass to
and be vested in the Indenture Trustee or such successor Servicer as may be
appointed under Section 6.2; and, without limitation, the Indenture Trustee and
the Issuer are hereby authorized and empowered to execute and deliver, on behalf
of the predecessor Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise.

(b) Upon termination of the Servicer under Section 6.1(a), the predecessor
Servicer shall cooperate with the Indenture Trustee, the Issuer and such
successor Servicer in effecting the termination of the responsibilities and
rights of the predecessor Servicer under this Agreement, including the transfer
to the Indenture Trustee or such successor Servicer for administration of all
cash amounts that shall at the time be held by the predecessor Servicer for
deposit, or shall thereafter be received with respect to a Receivable and the
delivery of the Receivable Files and the related accounts and Records to the
extent maintained by the Servicer. All reasonable costs and expenses (including
attorneys’ fees) incurred in connection with transferring the Receivable Files
to the successor Servicer and amending this Agreement to reflect such succession
as Servicer pursuant to this Section 6.1 shall be paid by the predecessor
Servicer upon presentation of reasonable documentation of such costs and
expenses.

Section 6.2. Appointment of Successor Servicer. (a) Upon the Servicer’s receipt
of notice of termination pursuant to Section 6.1 or the Servicer’s resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (x) the date 45 days
from the delivery to the Indenture Trustee and the Issuer of written notice of
such resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Servicer
shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of the Servicer’s
resignation or termination hereunder, the Indenture Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its appointment by a
written assumption in form acceptable to the Issuer and the Indenture Trustee
(with a copy to each Rating Agency). In the event that a successor Servicer has
not been appointed at the time when the predecessor Servicer has ceased to act
as Servicer in accordance with this Section 6.2, the Indenture Trustee without
further action shall automatically be appointed the successor Servicer. The
Indenture Trustee may resign as the Servicer by giving written notice of such
resignation to the Issuer and in such event shall be released from such duties
and obligations, such release not to be effective until the date a successor
Servicer enters into a written assumption as provided in this Section 6.2. Upon
delivery of any such notice to the Issuer, the Issuer shall obtain a new
servicer as the successor

 

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Servicer in accordance with this Section 6.2. Notwithstanding the above, if the
Indenture Trustee shall be legally unable so to act or if, within 30 days after
the delivery of its notice of resignation, the Issuer shall not have obtained a
successor Servicer, the Indenture Trustee shall appoint, or petition a court of
competent jurisdiction to appoint, any established institution, having a net
worth of not less than $100,000,000 and whose regular business shall include the
servicing of automotive receivables, as the successor to the Servicer under this
Agreement; provided that the Rating Agency Condition shall be satisfied in
connection with such appointment.

(b) Upon appointment, the successor Servicer shall be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties, and liabilities arising thereafter relating thereto
placed on the predecessor Servicer, by the terms and provisions of this
Agreement; provided, that (i) any failure of such successor Servicer to perform
such responsibilities or duties that are caused by the predecessor Servicer’s
failure to provide information or monies required hereunder shall not be
considered a default by such successor Servicer, (ii) such successor Servicer
shall have no liability for actions, inactions or representations of the
predecessor Servicer, (iii) the successor Servicer shall have no obligation to
pay any taxes required to be paid by the predecessor Servicer, (iv) the
successor Servicer shall have no obligation to pay any of the fees and expenses
of any other party involved in this transaction and (v) the successor Servicer
shall have no liability or obligation with respect to any indemnification
obligations of any predecessor Servicer. The indemnification obligations of the
successor Servicer are expressly limited to those instances in which liability
would otherwise be imposed by reason of willful misconduct, negligence or bad
faith.

(c) In connection with such appointment, the Indenture Trustee may make such
arrangements for the compensation of such successor Servicer out of payments on
Receivables as it and such successor Servicer shall agree; provided, however,
that no such compensation shall be in excess of the compensation permitted for
the predecessor Servicer under this Agreement. The Indenture Trustee and such
successor Servicer shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession.

(d) Notwithstanding anything herein or in the other Transaction Documents to the
contrary, in no event shall any successor Servicer be required to purchase any
Receivable pursuant to Section 3.7 herein.

Section 6.3. Notification to Noteholders and Certificateholders. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article VI, the Indenture Trustee shall give prompt written notice thereof to
Noteholders, and the Issuer shall give prompt written notice thereof to
Certificateholders at their respective addresses of record and to each Rating
Agency.

Section 6.4. Waiver of Past Servicer Termination Events. The holders of the
Notes evidencing not less than a majority of the principal amount of the
Outstanding Notes (or, if no Notes are Outstanding, holders of Certificates
evidencing a majority of the beneficial interest in the Issuer) may, on behalf
of all Noteholders and Certificateholders, waive any Servicer Termination Event
hereunder and its consequences, except an event resulting from the failure by
the Servicer to make any required payments in accordance with this Agreement,
which shall

 

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require the unanimous vote of all Holders of Outstanding Notes and Certificates.
Upon any such waiver of a past Servicer Termination Event, such Servicer
Termination Event shall cease to exist, and shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other Servicer Termination Event or impair any right consequent
thereon. The Indenture Trustee shall provide written notice of any such waiver
to the Rating Agencies.

Section 6.5. Termination. Unless earlier terminated, this Agreement will
terminate on the Payment Date in the month following the final payment or
liquidation of all the Receivables (the “Termination Date”).

Section 6.6. Optional Purchase of All Receivables. The Servicer, may purchase
the outstanding Receivables (such purchase, the “Optional Purchase”) and the
other assets in the Trust Estate (other than the Reserve Account) on any Payment
Date if both of the following conditions are satisfied: (i) as of the last day
of the related Collection Period, the Pool Balance has declined to 10% or less
of the Pool Balance as of the Cut-Off Date and (ii) the sum of the Optional
Purchase Price and the Available Collections for such Payment Date would be
sufficient to pay (A) the Servicing Fee for such Payment Date and all unpaid
Servicing Fees with respect to prior periods, (B) interest then due on the
Notes, (C) the aggregate Outstanding Note Balance of all of the Notes, as
determined by the Indenture Trustee and (D) expenses (including indemnification
amounts) due to the Owner Trustee, the Indenture Trustee, the Administrator and
the Servicer, which have not been previously paid. To exercise such option, the
Servicer shall deposit the Optional Purchase Price into the Collection Account
on the Business Day prior to such Payment Date. The Servicer shall furnish
written notice of such election to the Indenture Trustee and the Owner Trustee
not later than twenty (20) days (or such longer period as may be required by the
Clearing Agency in connection with the Note Depository Agreement for notice in
connection with a redemption of the Notes) prior to the Redemption Date.
Following its receipt of such notice, (i) the Indenture Trustee will promptly
(but not later than 3 Business Days after it has received such notice) provide
notice of such purchase to the Noteholders of record on such date and (ii) the
Issuer will promptly (but not later than 3 Business Days after it has received
such notice) provide notice of such purchase to the Certificateholders of record
on such date. The purchase price for the Trust Estate (other than the Reserve
Account) under this Section 6.6 shall be equal to the Optional Purchase Price.
If the Servicer exercises its option to purchase the Trust Estate (other than
the Reserve Account), the Notes shall be redeemed and in each case in whole but
not in part on the Redemption Date for the Redemption Price.

ARTICLE VII

MISCELLANEOUS PROVISIONS

Section 7.1. Amendment. (a) Any term or provision of this Agreement may be
amended by the Servicer or the Issuer with prior written notice to each Rating
Agency but without the consent of the Indenture Trustee any Noteholder, the
Owner Trustee or any other Person subject to subsection (d) of this Section 7.1;
provided that (i) such amendment shall not, as evidenced by an Officer’s
Certificate of the Servicer or an Opinion of Counsel delivered to the Indenture
Trustee and the Owner Trustee, materially and adversely affect the interests of
the Noteholders or (ii) the Rating Agency Condition shall have been satisfied
with respect to such

 

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amendment; provided further, that in the case of any amendment pursuant to this
Section 7.1(a), such amendment shall not, as evidenced by an Opinion of Counsel,
(i) affect the treatment of the Notes as indebtedness for federal income tax
purposes, (ii) be deemed to cause, for federal income tax purposes, a taxable
exchange of the Notes or (iii) cause the Issuer (or any part thereof) to be
treated as an association or publicly traded partnership taxable as a
corporation for federal income tax purposes.

(b) Subject to subsection (d) of this Section 7.1, this Agreement may also be
amended from time to time by the Servicer or the Issuer with the consent of the
Holders evidencing not less than a majority of the Outstanding Note Balance for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of the Noteholders. It will not be necessary to obtain the consent of
Noteholders to approve the particular form of any proposed amendment or consent,
but it will be sufficient if such consent approves the substance thereof. The
manner of obtaining such consents (and any other consents of Noteholders
provided for in this Agreement) and of evidencing the authorization of the
execution thereof by Noteholders will be subject to such reasonable requirements
as the Indenture Trustee may prescribe, including the establishment of record
dates pursuant to the Note Depository Agreement.

(c) Prior to the execution of any amendment to this Agreement, the Servicer or
the Issuer shall provide written notification of the substance of such amendment
to each Rating Agency; and promptly after the execution of any such amendment or
consent, the Servicer or the Issuer shall furnish a copy of such amendment or
consent to each Rating Agency and the Indenture Trustee.

(d) Prior to the execution of any amendment to this Agreement, the Depositor,
the Owner Trustee and the Indenture Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent to the execution and delivery of such amendment have been satisfied.
The Owner Trustee and the Indenture Trustee may, but shall not be obligated to,
enter into any such amendment which adversely affects the Owner Trustee’s or the
Indenture Trustee’s, as applicable, own rights, duties or immunities under this
Agreement. Furthermore, notwithstanding anything to the contrary herein, this
Agreement may not be amended in any way that would materially and adversely
affect the Owner Trustee’s, Indenture Trustee’s or Administrator’s rights,
privileges, indemnities, duties or obligations under this Agreement, the
Transaction Documents or otherwise without the prior written consent of such
party.

(e) Notwithstanding any provision of this Section 7.1 to the contrary, the
permitted activities or powers of the Issuer may be significantly changed only
with the approval of Holders of at least a majority of the Notes held by
entities other than the Depositor, its Affiliates and its agents.

Section 7.2. Counterparts. For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed in any number
of counterparts, each of which counterparts will be deemed to be an original,
and all of which counterparts will constitute but one and the same instrument.

 

   17    Servicing Agreement (BAAT 2010-2)

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Section 7.3. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING TO THE MAXIMUM
EXTENT PERMITTED BY LAW ALL OTHER CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

Section 7.4. Submission to Jurisdiction; Waiver of Jury Trial. Each of the
Parties hereto hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or Proceeding
relating to this Agreement or any documents executed and delivered in connection
herewith, or for recognition and enforcement of any judgment in respect thereof,
to the nonexclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New York
and appellate courts from any thereof;

(b) consents that any such action or Proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of such
action or Proceeding in any such court or that such action or Proceeding was
brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or Proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its
address determined in accordance with Section 7.6 of this Agreement;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) to the extent permitted by applicable law, each Party hereto irrevocably
waives all right of trial by jury in any action, Proceeding or counterclaim
based on, or arising out of, under or in connection with this Agreement, any
other Transaction Document, or any matter arising hereunder or thereunder.

Section 7.5. Headings and Cross-References. The various headings in this
Agreement are included for convenience only and will not affect the meaning or
interpretation of any provision of this Agreement.

Section 7.6. Notices. All communications and notices pursuant hereto to any
Party must be in writing or by fax and addressed or delivered to it at its
address as shown in Schedule I to the Sale Agreement or at such other address as
may be designated by it by notice to the other Parties and, if mailed or sent by
fax, will be deemed given upon receipt at the address or fax number for each
Party as set forth on Schedule I to the Sale Agreement.

Section 7.7. Severability of Provisions. If any one or more of the covenants,
agreements, provisions, or terms of this Agreement will be for any reason
whatsoever held invalid, then such covenants, agreements, provisions, or terms
will be deemed severable from the

 

   18    Servicing Agreement (BAAT 2010-2)

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remaining covenants, agreements, provisions, or terms of this Agreement and will
in no way affect the validity or enforceability of the other provisions of this
Agreement.

Section 7.8. Further Assurances. The Servicer agrees to do and perform, from
time to time, any and all acts and to execute any and all further instruments
required or reasonably requested by the Issuer more fully to effect the purposes
of this Agreement, including, without limitation, the execution of any financing
statements or continuation statements relating to the Receivables for filing
under the provisions of the UCC of any applicable jurisdiction.

Section 7.9. Waivers. No failure or delay on the part of the Servicer, the
Issuer or the Indenture Trustee in exercising any power or right hereunder (to
the extent such Person has any power or right hereunder) shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. No notice to or demand on any Party hereto in any case
shall entitle it to any notice or demand in similar or other circumstances. No
waiver or approval by any Party hereto under this Agreement shall, except as may
otherwise be stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval under this Agreement shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.

Section 7.10. Cumulative Remedies. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

Section 7.11. Third-Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the Parties hereto, the Noteholders and the
Certificateholders and their respective successors and permitted assigns and the
Owner Trustee shall be an express third party beneficiary hereof and may enforce
the provisions hereof as if it were a party hereto. Except as otherwise provided
in this Section, no other Person will have any right hereunder.

Section 7.12. Nonpetition Covenant. Each Party hereto agrees that, prior to the
date which is one year and one day after payment in full of all obligations of
each Bankruptcy Remote Party in respect of all securities issued by any
Bankruptcy Remote Party (i) such Party shall not authorize any Bankruptcy Remote
Party to commence a voluntary winding-up or other voluntary case or other
Proceeding seeking liquidation, reorganization or other relief with respect to
such Bankruptcy Remote Party or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect in any jurisdiction or seeking the
appointment of an administrator, a trustee, receiver, liquidator, custodian or
other similar official with respect to such Bankruptcy Remote Party or any
substantial part of its property or to consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other Proceeding commenced against such Bankruptcy Remote Party, or to make a
general assignment for the benefit of, its creditors generally, any Party hereto
or any other creditor of such Bankruptcy Remote Party, and (ii) none of the
Parties hereto shall commence or join with any other Person in commencing any
Proceeding against such Bankruptcy Remote Party under any bankruptcy,
reorganization, liquidation or insolvency law or statute now or hereafter in
effect in any jurisdiction. This Section shall survive the termination of this
Agreement.

Section 7.13. Limitation of Liability. Notwithstanding anything contained herein
to the contrary, this Agreement has been executed and delivered by Wilmington
Trust Company, not in

 

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its individual capacity but solely as Owner Trustee, and in no event shall it
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or under the Notes or any of the other
Transaction Documents or in any of the certificates, notices or agreements
delivered pursuant thereto, as to all of which recourse shall be had solely to
the assets of the Issuer. Under no circumstances shall the Owner Trustee be
personally liable for the payment of any indebtedness or expense of the Issuer
or be liable for the breach or failure of any obligations, representation,
warranty or covenant made or undertaken by the Issuer under the Transaction
Documents. For the purposes of this Agreement, in the performance of its duties
or obligations hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.

Section 7.14. Regulation AB. The Servicer shall cooperate fully with the
Depositor and the Issuer to deliver to the Depositor and the Issuer (including
any of its assignees or designees) any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Depositor or the Issuer to permit the Depositor to comply
with the provisions of Regulation AB, together with such disclosures relating to
the Servicer and the Receivables, or the servicing of the Receivables,
reasonably believed by the Depositor to be necessary in order to effect such
compliance.

Section 7.15. Information to Be Provided by the Indenture Trustee.

(a) So long as the Depositor is filing reports under the Exchange Act with
respect to the Issuer, the Indenture Trustee shall (i) on or before the fifth
Business Day of each month, notify the Depositor, in writing, of any Form 10-D
Disclosure Item with respect to the Indenture Trustee, together with a
description of any such Form 10-D Disclosure Item in form and substance
reasonably satisfactory to the Depositor; provided, however, that the Indenture
Trustee shall not be required to provide such information in the event that
there has been no change to the information previously provided by the Indenture
Trustee to Depositor, and (ii) as promptly as practicable following notice to or
discovery by a Responsible Officer of the Indenture Trustee of any changes to
such information, provide to the Depositor, in writing, such updated
information.

(b) As soon as available but no later than March 15 of each calendar year for so
long as the Issuer is filing reports under the Exchange Act, commencing in 2011,
the Indenture Trustee shall:

(i) deliver to the Depositor a report regarding the Indenture Trustee’s
assessment of compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under paragraph (b) of Rule 13a-18, Rule
15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be
signed by an authorized officer of the Indenture Trustee, and shall address each
of the Servicing Criteria specified in Exhibit B or such other criteria as
mutually agreed upon by the Depositor and the Indenture Trustee;

(ii) cause a firm of registered public accountants that is qualified and
independent with the meaning of Rule 2-01 of Regulation S-X under the Securities
Act to

 

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deliver a report for inclusion in the Issuer’s filing of Exchange Act Form 10-K
that attests to, and reports on, the assessment of compliance made by the
Indenture Trustee and delivered to the Depositor pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and
2-02(g) of Regulation S-X under the Securities Act and the Exchange Act;

(iii) deliver to the Depositor and any other Person that will be responsible for
signing the certification (a “Sarbanes Certification”) required by Rules
13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302 of the
Sarbanes-Oxley Act) on behalf of the Issuer or the Depositor substantially in
the form attached hereto as Exhibit C or such form as mutually agreed upon by
the Depositor and the Indenture Trustee; and

(iv) notify the Depositor in writing of any affiliations or relationships (as
described in Item 1119 of Regulation AB) between the Indenture Trustee and any
Item 1119 Party, provided, that no such notification need be made if the
affiliations or relationships are unchanged from those provided in the
notification in the prior calendar year.

The Indenture Trustee acknowledges that the parties identified in clause
(iii) above may rely on the certification provided by the Indenture Trustee
pursuant to such clause in signing a Sarbanes Certification and filing such with
the Commission.

Section 7.16. Form 8-K Filings. So long as the Depositor is filing Exchange Act
Reports with respect to the Issuer, the Indenture Trustee shall promptly notify
the Depositor, but in no event later than two (2) Business Days after the
Indenture Trustee had actual knowledge of its occurrence, of any Reportable
Event of which a Responsible Officer of the Indenture Trustee has actual
knowledge (other than a Reportable Event described in clause (a) or (b) of the
definition thereof as to which the Depositor or the Servicer has actual
knowledge). The Indenture Trustee shall be deemed to have actual knowledge of
any such event to the extent that it relates to the Indenture Trustee or any
action or failure to act by the Indenture Trustee.

Section 7.17. Indemnification. U.S. Bank National Association shall indemnify
the Depositor and shall hold the Depositor harmless from and against any losses,
damages, penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that the Depositor may
sustain arising out of or based upon:

(a) (A) any untrue statement of a material fact contained or alleged to be
contained in the Servicing Criteria assessment and any other information
required to be provided by U.S. Bank National Association to the Depositor under
Sections 7.15 (excluding clause (b)(ii) of Section 7.15) or 7.16 (such
information, the “Provided Information”), or (B) the omission or alleged
omission to state in the Provided Information a material fact required to be
stated in the Provided Information, or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, by way of clarification, that clause (B) of this paragraph
shall be construed solely by reference to the related information and not to any
other information communicated in connection with a sale or purchase of

 

   21    Servicing Agreement (BAAT 2010-2)

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securities, without regard to whether the Provided Information or any portion
thereof is presented together with or separately from such other information; or

(b) any failure by U.S. Bank National Association to deliver any Servicing
Criteria assessment, information, report, certification, accountants’ letter or
other material when and as required under Sections 7.15 and 7.16; provided,
however, for the avoidance of doubt, this provision shall exclude the
accountants’ report described in clause (b)(ii) of Section 7.15.

(c) In the case of any failure of performance described in clauses (a) and
(b) of this Section, U.S. Bank National Association shall promptly reimburse the
Depositor for all costs reasonably incurred in order to obtain the information,
report, certification, accountants’ letter (which shall not include the
accountants’ report described in clause (b)(ii) of Section 7.15) or other
material not delivered as required by U.S. Bank National Association.

Notwithstanding anything to the contrary contained herein, in no event shall
U.S. Bank National Association be liable for special, indirect or consequential
damages of any kind whatsoever, including but not limited to lost profits, even
if U.S. Bank National Association has been advised of the likelihood of such
loss or damage and regardless of the form of action.

 

   22    Servicing Agreement (BAAT 2010-2)

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The Parties have caused this Servicing Agreement to be executed by their
respective duly authorized officers as of the date and year first above written.

 

BANK OF AMERICA, NATIONAL ASSOCIATION,

as Servicer and Custodian

By:

 

/s/ Pedro Alvarez, Jr.

Name:

 

Pedro Alvarez, Jr.

Title:

  Director

BANK OF AMERICA AUTO TRUST 2010-2,

as Issuer

By:

 

WILMINGTON TRUST COMPANY,

not in its individual capacity

but solely as Owner Trustee

By:

 

/s/ J. Christopher Murphy

Name:

  J. Christopher Murphy

Title:

  Financial Services Officer

U.S. BANK NATIONAL ASSOCIATION,

as Indenture Trustee

By:

 

/s/ Melissa A. Rosal

Name:

  Melissa A. Rosal

Title:

  Vice President

 

   S-1    Servicing Agreement (BAAT 2010-2)

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF MONTHLY SERVICER REPORT

Attached

 

      Servicing Agreement (BAAT 2010-2)

--------------------------------------------------------------------------------

[SAMPLE DATA]

 

XX/XX/XX

   BAC REFERENCE REGISTRY SUMMARY REPORT - POOL# xxxx    PAGE    X    AS OF
MONTH-END XXX XXXX   

 

CO.

   TOTAL CURRENT
PRIN. BALANCE    TOTAL
CURRENT
FLAT AMOUNT    TOTAL
CURRENT
W/D AMOUNT    TOTAL NET
PRINCIPAL    NUM
OF
ACCTS

XXX

   XXX,XXX.XX    XX,XXX.XX    XX,XXX.XX    XXX,XXX.XX    XXX

XXX

   X,XXX,XXX.XX    XXX,XXX.XX    XX,XXX.XX    X,XXX,XXX.XX    XXX   
X,XXX,XXX.XX    XXX,XXX.XX    XX,XXX.XX    X,XXX,XXX.XX    XXX

 

*****************************************

LOAN RATE

   - WEIGHTED AVERAGE    =    X.XXX

REM. TERM

   - WEIGHTED AVERAGE    =    XX.XX

FICO SCORE

   - WEIGHTED AVERAGE    =    XXX.XX *****************************************

--------------------------------------------------------------------------------

[SAMPLE DATA]             BANK    XX       ADVANCED LOAN SYSTEM    *AMRXXXIV*   
PAGE NO    X BRANCH    XXX          WEDNESDAY    PROCESS DATE XX/XX/XX         
   SECURITIZATION PORTFOLIO STATISTICS    *AMXX XXX*    PROCESS THRU XX/XX/XX   
               CURRENT DATE XX/XX/XX   

 

POOL NUMBER xxxx    PERIOD ENDING XX/XX/XX    AUTO SECURITIZATION      

 

PORTFOLIO INFORMATION

ORIGINAL PRINCIPAL BALANCE

   XXX,XXX.XX    NUMBER OF CONTRACTS THIS PERIOD END    XXX

BEGINNING PERIOD PRINCIPAL BAL

   XXX,XXX.XX    BEGINNING PERIOD POOL FACTOR    XXX.XXXXXXX

ENDING PERIOD PRINCIPAL BAL

   XXX,XXX.XX    ENDING PERIOD POOL FACTOR    XX.XXXXXXX

PASS THRU PRINCIPAL

   X,XXX.XX    SERVICING FEE    X.XX

PASS THRU INTEREST

   X.XX    NUMBER OF CONTRACTS BOUGHT BACK    X

DISTRIBUTION AMOUNT

   X,XXX,XXX.XX-    AMOUNT OF CONTRACTS BOUGHT BACK    X.XX

SCHEDULED PYMT INT DIFFERENCE

   X.XX    DAYS IN PERIOD    X

CURRENT UNEARNED INTEREST

   X.XX      

PER UNIT INFORMATION

NUMBER OF UNITS

   .XXXXX    ACCRUED INTEREST PAYMENTS    X.XX

PRINCIPAL OUTSTANDING

   X.XX    SERVICING FEE    X.XX

PASS THRU PRINCIPAL

   X.XX    DISTRIBUTION AMOUNT    X.XX

PASS THRU INTEREST

   X.XX      

WEIGHTED AVERAGES

LOAN RATE

   X.XXXXXXX    REM TERM    XX.XXXXXXX

DEALER BUY RATE

   X.XXXXXXX      

 

DELINQUENCIES

DAYS PAST DUE

   NUMBER OF
CONTRACTS    PERCENT
OF TOTAL
NBR   

AMOUNT PAST DUE

   PERCENT
OF
PAYOFF
AMT    PRINCIPAL
OUTSTANDING

30 - 59

   XX    XX.XXXXX    XX,XXX.XX    X.XXX    XXX,XXX.XX

60 - 89

   XX    XX.XXXXX    XX,XXX.XX    X.XXX    XX,XXX.XX

90 - 119

   X    X.XXXXX    XX,XXX.XX    X.XXX    XX,XXX.XX

120 - 149

   X    X.XXXXX    X,XXX.XX    X.XXX    XX,XXX.XX

150 - 179

   X    X.XXXXX    XXX.XX    X.XXX    X,XXX.XX

180 AND OVER

   X    X.XXXXX    X.XX    X.XXX    X.XX

TOTALS

   XXX    X.XXXXX    XX,XXX.XX    X.XXX    XXX,XXX.XX

 

ORIGINAL AMT FINANCED:

       

ORIGINAL TERM (MONTHS):

    

LOWEST ORIG AMT FIN

   X,XXX.XX    WTD AVG ORIG TERM    XX.XXXXXXX

HIGHEST ORIG AMT FIN

   XX,XXX.XX    SHORTEST ORIG TERM    XX.XXXX

TOT ORIG LOAN AMT FIN

   X,XXX,XXX.XX    LONGEST ORIG TERM    XXX.XXXX

ANNUAL PERCENTAGE RATE:

        

LOWEST APR

   X.XXXX    REMAINING TERM(MONTHS):   

HIGHEST APR

   X.XXXX    SHORTEST REM TERM    X.XXXX       LONGEST REM TERM    XX.XXXX

SCHEDULED WEIGHTED AVG LIFE (MONTHS)

   XX.XXXX      

AVERAGE SEASONING (MONTHS)

   XX.XXXX      

--------------------------------------------------------------------------------

[SAMPLE DATA]             BANK    XX       ADVANCED LOAN SYSTEM    *AMRXXXIV*   
PAGE NO    XX BRANCH    XXX                PROCESS DATE XX/XX/XX               
      ADDITIONAL SECURITIZATION TOTALS    *AM01 XXX*    PROCESS THRU XX/XX/XX   
               CURRENT DATE XX/XX/XX   

POOL NUMBER        00xxxx        AUTO SECURITIZATION

 

     NUMBER    TODAY    NUMBER    MONTH TODAY

REGULAR PRINCIPAL PAID

      XXX.XX       X,XXX.XX

REGULAR INTEREST PAID

      XX.XX       XX.XX

ADDITIONAL PRINCIPAL PAID

   X    X.XX    X    XXX.XX

PAID OFF PRINCIPAL

   X    XX.XX    X    X,XXX.XX

PAID OFF INTEREST

      X.XX       XXX.X

PAID OFF SCHED PMTS

      XX.XX       XXX.X

CHARGED OFF PRINCIPAL

   X    XXX.XX    X    X,XXX.XX

CHARGED OFF INTEREST

      X.XX       X.XX

CHARGED OFF SCHED PMTS

      X.XX       X.XX

CHARGE OFF RECOVERIES

      X.XX       X.XX

REPURCHASED PRINCIPAL

   X    X.XX    X    X.XX

REPURCHASED INTEREST

      X.XX       X.XX

REPURCHASED SCHED PMTS

      X.XX       XXX

INTEREST ADVANCED

      X,XXX.XX       X,XXX.XX

INTEREST ADVANCED RECOVERIES (PMTS)

      X.XX       X.XX

INTEREST ADVANCED RECOVERIES (CHOFF)

      X.XX       X.XX

NET PRINCIPAL ADJUSTMENTS

      X.XX       X.XX

NET INTEREST ADJUSTMENTS

      X.XX       X.XX

SOLD PRINCIPAL

   X    X.XX    X    X.XX

TRANSACTION COUNT

   XXX         

INTEREST ADVANCES

   X         

--------------------------------------------------------------------------------

EXHIBIT B

SERVICING CRITERIA TO BE ADDRESSED IN

INDENTURE TRUSTEE’S ASSESSMENT OF COMPLIANCE

The assessment of compliance to be delivered by the Indenture Trustee shall
address, at a minimum, the criteria identified as below as “Applicable Servicing
Criteria”:

 

Servicing Criteria

   Applicable
Servicing Criteria

Reference

  

Criteria

        General Servicing Considerations   

1122(d)(1)(i)

   Policies and procedures are instituted to monitor any performance or other
triggers and events of default in accordance with the transaction agreements.   
X

1122(d)(1)(ii)

   If any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s performance
and compliance with such servicing activities.    X

1122(d)(1)(iii)

   Any requirements in the transaction agreements to maintain a back-up servicer
for the pool assets are maintained.   

1122(d)(1)(iv)

   A fidelity bond and errors and omissions policy is in effect on the party
participating in the servicing function throughout the reporting period in the
amount of coverage required by and otherwise in accordance with the terms of the
transaction agreements.    X    Cash Collection and Administration   

1122(d)(2)(i)

   Payments on pool assets are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the transaction
agreements.    X

1122(d)(2)(ii)

   Disbursements made via wire transfer on behalf of an obligor or to an
investor are made only by authorized personnel.    X

1122(d)(2)(iii)

   Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances, are
made, reviewed and approved as specified in the transaction agreements.    X

1122(d)(2)(iv)

   The related accounts for the transaction, such as cash reserve accounts or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth in the
transaction agreements.    X

1122(d)(2)(v)

   Each custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes of this
criterion, “federally insured depository institution” with respect to a foreign
financial institution means a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.    X

1122(d)(2)(vi)

   Unissued checks are safeguarded so as to prevent unauthorized access.    X

1122(d)(2)(vii)

   Reconciliations are prepared on a monthly basis for all asset-backed
securities related bank accounts, including custodial accounts and related bank
clearing accounts. These reconciliations are (A) mathematically accurate; (B)
prepared within 30 calendar days after the bank statement cutoff date, or such
other number of days specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared the reconciliation; and
(D) contain explanations for reconciling items. These reconciling items are
resolved within 90 calendar days of their original identification, or such other
number of days specified in the transaction agreements.    X

 

      Servicing Agreement (BAAT 2010-2)

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Servicing Criteria

   Applicable
Servicing Criteria

Reference

  

Criteria

          Investor Remittances and Reporting      1122(d)(3)(i)    Reports to
investors, including those to be filed with the Commission, are maintained in
accordance with the transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared in accordance with
timeframes and other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in the transaction
agreements; (C) are filed with the Commission as required by its rules and
regulations; and (D) agree with investors’ or the trustee’s records as to the
total unpaid principal balance and number of pool assets serviced by the
Servicer.    X 1122(d)(3)(ii)    Amounts due to investors are allocated and
remitted in accordance with timeframes, distribution priority and other terms
set forth in the transaction agreements.    X 1122(d)(3)(iii)    Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the transaction
agreements.    X 1122(d)(3)(iv)    Amounts remitted to investors per the
investor reports agree with cancelled checks, or other form of payment, or
custodial bank statements.    X    Pool Asset Administration    1122(d)(4)(i)   
Collateral or security on pool assets is maintained as required by the
transaction agreements or related asset pool documents.    1122(d)(4)(ii)   
Pool assets and related documents are safeguarded as required by the transaction
agreements    1122(d)(4)(iii)    Any additions, removals or substitutions to the
asset pool are made, reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.    X 1122(d)(4)(iv)    Payments on
pool assets, including any payoffs, made in accordance with the related pool
asset documents are posted to the Servicer’s obligor records maintained no more
than two business days after receipt, or such other number of days specified in
the transaction agreements, and allocated to principal, interest or other items
(e.g., escrow) in accordance with the related asset pool documents.   
1122(d)(4)(v)    The Servicer’s records regarding the accounts and the accounts
agree with the Servicer’s records with respect to an obligor’s unpaid principal
balance.    1122(d)(4)(vi)    Changes with respect to the terms or status of an
obligor’s account (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction agreements
and related pool asset documents.    1122(d)(4)(vii)    Loss mitigation or
recovery actions (e.g., forbearance plans, modifications and deeds in lieu of
foreclosure, foreclosures and repossessions, as applicable) are initiated,
conducted and concluded in accordance with the timeframes or other requirements
established by the transaction agreements.    1122(d)(4)(viii)    Records
documenting collection efforts are maintained during the period a pool asset is
delinquent in accordance with the transaction agreements. Such records are
maintained on at least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity’s activities in monitoring
delinquent pool assets including, for example, phone calls, letters and payment
rescheduling plans in cases where delinquency is deemed temporary (e.g., illness
or unemployment).    1122(d)(4)(ix)    Adjustments to interest rates or rates of
return for pool assets with variable rates are computed based on the related
pool asset documents.   

 

   B-2    Servicing Agreement (BAAT 2010-2)

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Servicing Criteria

   Applicable
Servicing Criteria

Reference

  

Criteria

    

1122(d)(4)(x)

   Regarding any funds held in trust for an obligor (such as escrow accounts):
(A) such funds are analyzed, in accordance with the obligor’s Account documents,
on at least an annual basis, or such other period specified in the transaction
agreements; (B) interest on such funds is paid, or credited, to obligors in
accordance with applicable Account documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full repayment of the
related Accounts, or such other number of days specified in the transaction
agreements.   

1122(d)(4)(xi)

   Payments made on behalf of an obligor (such as tax or insurance payments) are
made on or before the related penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided that such support has
been received by the servicer at least 30 calendar days prior to these dates, or
such other number of days specified in the transaction agreements.   

1122(d)(4)(xii)

   Any late payment penalties in connection with any payment to be made on
behalf of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or omission.   

1122(d)(4)(xiii)

   Disbursements made on behalf of an obligor are posted within two business
days to the obligor’s records maintained by the servicer, or such other number
of days specified in the transaction agreements.   

1122(d)(4)(xiv)

   Delinquencies, charge-offs and uncollectible accounts are recognized and
recorded in accordance with the transaction agreements.   

1122(d)(4)(xv)

   Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in the
transaction agreements.    X

 

   B-3    Servicing Agreement (BAAT 2010-2)

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EXHIBIT C

FORM OF INDENTURE TRUSTEE’S ANNUAL CERTIFICATION

 

  Re: BANK OF AMERICA AUTO TRUST 2010-2

U.S. Bank National Association, not in its individual capacity but solely as
indenture trustee (the “Indenture Trustee”), certifies to Bank of America Auto
Receivables Securitization, LLC (the “Depositor”), and its officers, with the
knowledge and intent that they will rely upon this certification, that:

(1) It has reviewed the report on assessment of the Indenture Trustee’s
compliance (the “Servicing Assessment”) that was delivered by the Indenture
Trustee to the Depositor pursuant to Section 7.15 of the Servicing Agreement
(the “Agreement”), dated as of June 24, 2010 by and between the Issuer, the
Indenture Trustee and Bank of America, National Association (collectively, the
“Indenture Trustee Information”);

(2) To the best of its knowledge, the Servicing Assessment, taken as a whole,
does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Servicing Assessment; and

(3) To the best of its knowledge, all of the Provided Information (as defined in
Section 7.17 of the Agreement) required to be provided by the Indenture Trustee
under the Agreement has been provided to the Depositor.

 

U.S. Bank National Association, not in its individual capacity but solely as
Indenture Trustee Date:      

 

      Servicing Agreement (BAAT 2010-2)