EXHIBIT 10.2

 

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SALE AND SERVICING

AGREEMENT

 

Among

 

M&I AUTO LOAN TRUST 2005-1

 

as

 

Trust

 

M&I DEALER AUTO SECURITIZATION, LLC

 

as

 

Seller

 

M&I MARSHALL & ILSLEY BANK

 

as Servicer

 

and

 

JPMORGAN CHASE BANK, N.A.

 

as Indenture Trustee

 

Dated as of November 22, 2005

 

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TABLE OF CONTENTS

 

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ARTICLE I.        DEFINITIONS.

   1

        SECTION 1.1.

   Definitions    1

        SECTION 1.2.

   Other Interpretive Provisions    1

ARTICLE II.       CONVEYANCE OF RECEIVABLES.

   2

        SECTION 2.1.

   Conveyance of Receivables on the Closing Date    2

        SECTION 2.2.

   [RESERVED]    2

        SECTION 2.3.

   Sale of Receivables    2

ARTICLE III.      THE RECEIVABLES

   3

        SECTION 3.1.

   Representations and Warranties as to Each Receivable on the Closing Date    3

        SECTION 3.2.

   [RESERVED]    7

        SECTION 3.3.

   Purchase by Servicer upon Breach of Representation or Warranty    7

        SECTION 3.4.

   Custodian of Receivable Files    8

ARTICLE IV.      ADMINISTRATION AND SERVICING OF RECEIVABLES

   10

        SECTION 4.1.

   Duties of Servicer    10

        SECTION 4.2.

   Collection of Receivable Payments    11

        SECTION 4.3.

   Realization upon Receivables    12

        SECTION 4.4.

   Physical Damage Insurance    13

        SECTION 4.5.

   Maintenance of Security Interests in Financed Vehicles    13

        SECTION 4.6.

   Covenants of Servicer    13

        SECTION 4.7.

   Purchase by Servicer upon Breach of Covenant    14

        SECTION 4.8.

   Servicing Fee    14

        SECTION 4.9.

   Servicer’s Report    14

        SECTION 4.10.

   Annual Statement as to Compliance; Notice of Default    15

        SECTION 4.11.

   Annual Independent Certified Public Accountants’ Report    15

        SECTION 4.12.

   Access to Certain Documentation and Information Regarding Receivables    16

        SECTION 4.13.

   Reports to the Rating Agencies    16

        SECTION 4.14.

   Servicer Expenses    16

 

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TABLE OF CONTENTS

(continued)

 

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ARTICLE V.      DISTRIBUTIONS; ACCOUNTS; STATEMENTS TO CERTIFICATEHOLDERS AND
NOTEHOLDERS; ADVANCES

   16

        SECTION 5.1.

   Establishment of Accounts    16

        SECTION 5.2.

   Collections    18

        SECTION 5.3.

   [RESERVED]    19

        SECTION 5.4.

   Additional Deposits    19

        SECTION 5.5.

   Distributions    19

        SECTION 5.6.

   Statements to Certificateholders and Noteholders    21

        SECTION 5.7.

   Net Deposits    22

        SECTION 5.8.

   Reserve Account    22

        SECTION 5.9.

   Monthly Advances    23

ARTICLE VI.     SELLER

   23

        SECTION 6.1.

   Representations of Seller    23

        SECTION 6.2.

   Continued Existence    24

        SECTION 6.3.

   Liability of Seller; Indemnities    25

        SECTION 6.4.

   Merger or Consolidation of, or Assumption of the Obligations of, Seller    25

        SECTION 6.5.

   Limitation on Liability of Seller and Others    26

        SECTION 6.6.

   Seller May Own Certificates or Notes    26

        SECTION 6.7.

   Security Interest    26

ARTICLE VII.   SERVICER

   26

        SECTION 7.1.

   Representations of Servicer    26

        SECTION 7.2.

   Indemnities of Servicer    28

        SECTION 7.3.

   Merger or Consolidation of, or Assumption of the Obligations of, Servicer   
29

        SECTION 7.4.

   Limitation on Liability of Servicer and Others    29

        SECTION 7.5.

   M&I Bank Not To Resign as Servicer    30

        SECTION 7.6.

   Existence    30

        SECTION 7.7.

   Servicer May Own Notes or Certificates    30

ARTICLE VIII.  SERVICER TERMINATION EVENTS

   31

        SECTION 8.1.

   Servicer Termination Event    31

 

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TABLE OF CONTENTS

(continued)

 

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        SECTION 8.2.

   Appointment of Successor    32

        SECTION 8.3.

   Payment of Servicing Fee    33

        SECTION 8.4.

   Notification to Noteholders and Certificateholders    33

        SECTION 8.5.

   Waiver of Past Defaults    33

ARTICLE IX.      TERMINATION

   33

        SECTION 9.1.

   Optional Purchase of All Receivables; Termination Notice    33

ARTICLE X.       MISCELLANEOUS PROVISIONS

   34

        SECTION 10.1.

   Amendment    34

        SECTION 10.2.

   Protection of Title to Trust Property    35

        SECTION 10.3.

   Notices    36

        SECTION 10.4.

   Assignment    37

        SECTION 10.5.

   Litigation and Indemnities    37

        SECTION 10.6.

   Limitations on Rights of Others    37

        SECTION 10.7.

   Severability    37

        SECTION 10.8.

   Separate Counterparts    38

        SECTION 10.9.

   Headings    38

        SECTION 10.10.

   Governing Law    38

        SECTION 10.11.

   Assignment to Indenture Trustee    38

        SECTION 10.12.

   Third-Party Beneficiary    38

        SECTION 10.13.

   Nonpetition Covenant    38

        SECTION 10.14.

   Limitation of Liability    38

        SECTION 10.15.

   Further Assurances    39

        SECTION 10.16.

   No Waiver; Cumulative Remedies    39

 

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TABLE OF CONTENTS

 

SCHEDULES Schedule A    -   Schedule of Receivables Schedule B    -   Location
of Receivables Files Schedule C    -   Perfection Representations, Warranties
and Covenants Schedule D    -   Notice Addresses EXHIBITS          Exhibit A   
-   Form of Servicer’s Report APPENDIX          Appendix X    -   Definitions

 

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SALE AND SERVICING AGREEMENT dated as of November 22, 2005, (this “Agreement”)
among M&I AUTO LOAN TRUST 2005-1, a Delaware statutory trust (the “Trust”), M&I
DEALER AUTO SECURITIZATION, LLC, a Delaware limited liability company (in its
capacity as seller, “Seller”), M&I MARSHALL & ILSLEY BANK, a banking corporation
organized under the laws of the State of Wisconsin (“M&I Bank” and in its
capacity as servicer, “Servicer”) and JPMorgan Chase Bank, N.A., a national
banking association, (in its capacity as indenture trustee, “Indenture
Trustee”).

 

WHEREAS, the Trust desires to purchase from Seller a portfolio of Receivables
arising in connection with Motor Vehicle Loans secured by new and used
automobiles and light trucks, which have been sold to Seller by JPMorgan Chase
Bank, N.A. (“JPMorgan”), a national banking association (on behalf of Preferred
Receivables Funding Corporation (“PREFCO”) and Falcon Asset Securitization
Corporation (“Falcon”)), and by M&I Northwoods III LLC, a Delaware limited
liability company (“Northwoods”) under the Purchase Agreement;

 

WHEREAS, Seller is willing to sell such Receivables to the Trust; and

 

WHEREAS, Servicer is willing to service such Receivables.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:

 

ARTICLE I. DEFINITIONS.

 

SECTION 1.1. Definitions. Capitalized terms are used in this Agreement as
defined in Appendix X to this Agreement.

 

SECTION 1.2. Other Interpretive Provisions. For purposes of this Agreement,
unless the context otherwise requires: (a) accounting terms not otherwise
defined in this Agreement, and accounting terms partly defined in this Agreement
to the extent not defined, shall have the respective meanings given to them
under generally accepted accounting principles; (b) terms defined in Article 9
of the UCC as in effect in the relevant jurisdiction and not otherwise defined
in this Agreement are used as defined in that Article; (c) the words “hereof,”
“herein” and “hereunder” and words of similar import refer to this Agreement as
a whole and not to any particular provision of this Agreement; (d) references to
any Article, Section, Schedule, Appendix or Exhibit are references to Articles,
Sections, Schedules, Appendices and Exhibits in or to this Agreement and
references to any paragraph, subsection, clause or other subdivision within any
Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (e) the term “including” means
“including without limitation”; (f) except as otherwise expressly provided
herein, references to any law or regulation refer to that law or regulation as
amended from time to time and include any successor law or regulation; (g)
references to any Person include that Person’s successors and assigns; and (h)
headings are for purposes of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof.

 

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ARTICLE II. CONVEYANCE OF RECEIVABLES.

 

SECTION 2.1. Conveyance of Receivables on the Closing Date. In consideration of
the Trust’s delivery to, or upon the order of, Seller of all of the Notes and
the Certificates on the Closing Date, Seller does hereby sell, transfer, assign,
set over and otherwise convey to the Trust, without recourse, subject to the
obligations herein (collectively, the “Trust Property”):

 

(a) all right, title and interest of Seller in and to the Receivables identified
on the Schedule of Receivables delivered on the Closing Date, and all moneys
received thereon after the Cutoff Date;

 

(b) all right, title and interest of Seller in the security interests in the
Financed Vehicles granted by Obligors pursuant to the Receivables and any other
interest of Seller in the Financed Vehicles and any other property that shall
secure the Receivables;

 

(c) the interest of Seller in any proceeds with respect to the Receivables from
claims on any Insurance Policies covering Financed Vehicles or the Obligors;

 

(d) rebates of premiums relating to Insurance Policies and rebates of other
items such as extended warranties financed under the Receivables, in each case,
to the extent the Servicer would, in accordance with its customary practices,
apply such amounts to the Principal Balance of the related Receivable;

 

(e) the interest of Seller in any proceeds from (i) any Receivable repurchased
by a Dealer, pursuant to a Dealer Agreement, as a result of a breach of
representation or warranty in the related Dealer Agreement, (ii) a default by an
Obligor resulting in the repossession of the Financed Vehicle under the
applicable Motor Vehicle Loan or (iii) any Dealer Recourse or other rights
relating to the Receivables under Dealer Agreements;

 

(f) all right, title and interest in all funds on deposit from time to time in
the Certificate Distribution Account and the Trust Accounts, and in all
investments and proceeds thereof (but excluding all investment income thereon);

 

(g) all right, title and interest of Seller under the Purchase Agreement;

 

(h) all right, title and interest of Seller in any instrument or document
relating to the Receivables; and

 

(i) the proceeds of any and all of the foregoing.

 

SECTION 2.2. [RESERVED]

 

SECTION 2.3. Sale of Receivables. It is the express intention of Seller and the
Trust that:

 

(a) the assignment and transfer herein contemplated constitute a sale of the
Receivables and the other Trust Property described above, conveying good title
thereto free and clear of any Liens, encumbrances, security interests or rights
of other Persons, from Seller to the Trust; and

 

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(b) the Receivables and the other Trust Property described above not be a part
of Seller’s estate in the event of a bankruptcy or insolvency of Seller.

 

If, notwithstanding the intention of the Seller and the Trust, such conveyance
is deemed to be a pledge in connection with a financing or is otherwise deemed
not to be a sale: (i) the Seller hereby grants, and the parties intend that the
Seller shall have granted, to the Trust a first priority perfected security
interest in all of the Seller’ right (including the power to convey title
thereto), title and interest in the items of the Trust Property and all proceeds
of the foregoing to secure such pledge and the performance of the obligations of
the Seller hereunder; (ii) this Agreement shall constitute a security agreement
under applicable law and the Trust shall have all of the rights and remedies of
a secured party and creditor under the UCC as in force in the relevant
jurisdictions; (iii) the possession by the Trust or its agent of the Receivables
Files and any other property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be “possession by the secured
party” or possession by the Trust or a person designated by such Trust, for
purposes of perfecting the security interest pursuant to the New York Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; and (iv) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed to be notifications to, or acknowledgments, receipts or
confirmations from, bailees or agents (as applicable) of the Trust for the
purpose of perfecting such security interest under applicable law.

 

ARTICLE III. THE RECEIVABLES.

 

SECTION 3.1. Representations and Warranties as to Each Receivable on the Closing
Date. Servicer hereby makes the following representations and warranties on the
Closing Date as to each Receivable conveyed to the Seller pursuant to the
Purchase Agreement on which the Trust shall rely in acquiring the Receivables.
Unless otherwise indicated, such representations and warranties shall speak as
of the Closing Date, but shall survive the transfer and assignment of the
Receivables to the Trust and the pledge thereof to Indenture Trustee pursuant to
the Indenture.

 

(a) Characteristics of Receivables. The Receivable has been fully and properly
executed by the parties thereto and (i) has been originated by a Dealer in the
ordinary course of such Dealer’s business to finance the retail sale by a Dealer
of the related Financed Vehicle and has been purchased by M&I Bank, Dealer
Finance or their predecessors in interest in the ordinary course of their
business, (ii) was underwritten in accordance with M&I Bank’s underwriting
standards, (iii) is secured by a valid, subsisting, binding and enforceable
first priority perfected security interest in favor of Dealer Finance or M&I
Bank in the Financed Vehicle (subject to administrative delays and clerical
errors on the part of the applicable government agency and to any statutory or
other Lien arising by operation of law after the Closing Date which is prior to
such security interest), which security interest is assignable together with
such Receivable, and has been so assigned to Seller, and subsequently assigned
to the Trust pursuant to the Sale and Servicing Agreement, and pledged to
Indenture Trustee pursuant to the Indenture, (iv) contains customary and
enforceable provisions such that the rights

 

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and remedies of the holder thereof are adequate for realization against the
collateral of the benefits of the security, (v) provided, at origination, for
level monthly payments (provided that the amount of the first or last payment
may be minimally different and provided further that the Receivable may contain
an introductory period of up to 3 months in which no monthly payment is due),
which fully amortize the Initial Principal Balance over the original term,
(vi) provides for interest at the Contract Rate specified in the Schedule of
Receivables, (vii) was originated in the United States and (viii) constitutes
“tangible chattel paper” as defined in the UCC.

 

(b) Individual Characteristics. The Receivables have the following individual
characteristics as of the Cutoff Date (i) each Receivable is secured by a Motor
Vehicle; (ii) each Receivable has a Contract Rate of no less than 2.75% and not
more than 16.97%; (iii) each Receivable had an original term to maturity of not
more than 75 months and not less than 12 months and each Receivable has a
remaining term to maturity, as of the Cutoff Date, of 6 months or more;
(iv) each Receivable had an Initial Principal Balance less than or equal to
$142,422.30; (v) each Receivable has a Cutoff Date Principal Balance of greater
than or equal to $500; (vi) no Receivable has a scheduled maturity date later
than December 17, 2011; (vii) no Receivable was more than 29 days past due as of
the Cutoff Date; (viii) no Financed Vehicle was noted in the related records of
M&I Bank as being the subject of any pending bankruptcy or insolvency proceeding
as of the Cutoff Date; (ix) no Receivable is subject to a force placed Physical
Damage Insurance Policy on the related Financed Vehicle; (x) each Receivable is
a Simple Interest Receivable; and (xi) the Dealer of the Financed Vehicle has no
participation in, or other right to receive, any proceeds of such Receivable.
The Receivables were selected using selection procedures that were not intended
to be adverse to the Seller.

 

(c) Schedule of Receivables. The information with respect to each Receivable set
forth in the Schedule of Receivables delivered on the Closing Date, including
(without limitation) the account number, the Cutoff Date Principal Balance, the
maturity date and the Contract Rate, was true and correct in all material
respects as of the close of business on the Cutoff Date.

 

(d) Compliance with Law. The Receivable and the sale of the related Financed
Vehicle complied at the time it was originated or made, and will comply as of
the Closing Date, in all material respects with all requirements of applicable
federal, state and local laws, and regulations thereunder, including, to the
extent applicable, usury laws, the Federal Truth in Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Reporting Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Fair Debt Collection
Practices Act, the Fair Credit Billing Act, Federal Reserve Board Regulations B
and Z, the Servicemembers Civil Relief Act, state adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code, and any other consumer
credit, consumer protection, equal opportunity and disclosure laws applicable to
that Receivable.

 

(e) Binding Obligation. The Receivable constitutes the genuine, legal, valid and
binding payment obligation in writing of the Obligor, enforceable in all
material respects by the holder thereof in accordance with its terms, subject to
the effect of bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors’ rights generally, and the Receivable is
not subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury.

 

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(f) Lien in Force. The Receivable has not been satisfied, subordinated or
rescinded nor has any action been taken by the Servicer which would have the
effect of releasing the related Financed Vehicle from the Lien granted by the
Receivable in whole or in part.

 

(g) No Amendment or Waiver. No material provision of the Receivable has been
amended, waived, altered or modified in any respect, except such waivers as
would be permitted under the Sale and Servicing Agreement and as are reflected
in the Receivable File, and no amendment, waiver, alteration or modification
causes such Receivable not to conform to the other representations or warranties
contained in this Section 3.1.

 

(h) No Liens. There are no Liens or claims, including Liens for work, labor,
materials or unpaid state or federal taxes, relating to the Financed Vehicle
securing the Receivable, that are or may be prior to or equal to the Lien
granted by the Receivable.

 

(i) No Default. Except for payment delinquencies continuing for a period of less
than 30 days as of the Cutoff Date, no default, breach, violation or event
permitting acceleration under the terms of the Receivable exists and no
continuing condition that with notice or lapse of time, or both, would
constitute a default, breach, violation or event permitting acceleration under
the terms of the Receivable has arisen.

 

(j) Insurance. The Receivable requires the Obligor to insure the Financed
Vehicle under a Physical Damage Insurance Policy, pay the premiums for such
insurance and keep such insurance in full force and effect.

 

(k) Good Title. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from the
Seller to the Trust and that the beneficial interest in and title to the
Receivables not be part of the Seller’s estate in the event of the filing of a
bankruptcy petition or insolvency proceeding by or against the Seller under any
bankruptcy or insolvency law. No Receivable has been sold, transferred,
assigned, or pledged (i) by Northwoods and JPMorgan (as agent on behalf of
PREFCO and Falcon) to any other person other than the Seller, and (ii) by the
Seller to any other person other than the Trust. Immediately prior to the
transfer and assignment herein contemplated, the Seller had good and marketable
title to the Receivable free and clear of any Lien and had full right and power
to transfer and assign the Receivable to the Trust and immediately upon the
transfer and assignment of the Receivable to the Trust, the Trust shall have
good and marketable title to the Receivable, free and clear of any Lien; and the
Trust’s interest in the Receivable resulting from the transfer has been
perfected under the UCC. All filings (including UCC filings) necessary in any
jurisdiction, to give the Trust a first priority perfected ownership interest in
the Receivables, and to give Indenture Trustee a first priority perfected
security interest therein, shall have been filed or will be filed within ten
days after the effective date of this Agreement by the Servicer in the
appropriate filing offices with a copy to the Indenture Trustee of such filing.
Upon such filing by the Servicer, the Indenture Trustee will have a first
priority perfected security interest in the Receivables.

 

(l) Obligations. The Originator has duly fulfilled all material obligations on
its part to be fulfilled under, or in connection with, the Receivable.

 

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(m) Possession. There is only one original executed Receivable, and immediately
prior to the Closing Date, the Servicer will have possession of such original
executed Receivable.

 

(n) No Government Obligor. The Obligor on the Receivable is not the United
States of America or any state thereof or any local government, or any agency,
department, political subdivision or instrumentality of the United States of
America or any state thereof or any local government.

 

(o) Marking Records. By the Closing Date, the Servicer shall have caused the
portions of the Servicer’s electronic master record of Motor Vehicle Loans
relating to the Receivables to be clearly and unambiguously marked to show that
the Receivable is owned by the Trust in accordance with the terms of this
Agreement.

 

(p) No Assignment. As of the Closing Date, neither M&I Bank nor any of its
Affiliates shall have taken any action to convey any right to any Person that
would result in such Person having a right to payments received under the
Insurance Policies or Dealer Agreements, or payments due under the Receivable,
that is senior to, or equal with, that of the Trust.

 

(q) Lawful Assignment. The Receivable has not been originated in, and is not
subject to the laws of, any jurisdiction under which the sale, transfer or
assignment of such Receivable hereunder or pursuant to transfers of the Notes or
Certificates are unlawful, void or voidable. Neither M&I Bank nor any of its
Affiliates has entered into any agreement with any Obligor that prohibits,
restricts or conditions the assignment of any portion of the Receivables.

 

(r) Dealer Agreements. A Dealer Agreement for each Receivable is in effect
whereby the Dealer warrants title to the Motor Vehicle and indemnifies the
applicable Originator and its assigns against the unenforceability of each
Receivable sold thereunder, and the rights of the applicable Originator
thereunder, with regard to the Receivable sold hereunder, have been validly
assigned to and are enforceable against the Dealer by the Seller, along with any
Dealer Recourse.

 

(s) Composition of Receivable. No Receivable has a Principal Balance which
includes capitalized interest, late charges or amounts attributable to the
payment of the premium for any Physical Damage Insurance Policy.

 

(t) Database File. The information included with respect to each Receivable in
the database file delivered pursuant to Section 4.9(b) of this Agreement is
accurate and complete in all material respects.

 

(u) No Bankruptcies. No Obligor on any Receivable was noted in the related
Receivable File as having filed for bankruptcy in a proceeding which remained
undischarged as of the Cutoff Date.

 

(v) Amounts. The Original Pool Balance was $650,000,017.82

 

(w) Aggregate Characteristics. The Receivables had the following characteristics
in the aggregate as of the Cutoff Date: (i) approximately 43% of the Original
Pool Balance was attributable to loans for purchases of new Financed Vehicles,
and approximately 57% of the

 

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Original Pool Balance was attributable to loans for purchases of used Financed
Vehicles; (ii) approximately 25% of the Original Pool Balance was attributable
to Receivables the mailing addresses of the Obligors with respect to which are
located in the State of Minnesota, 37.8% of the Original Pool Balance was
attributable to Receivables the mailing addresses of the Obligors with respect
to which are located in the State of Wisconsin, and no other state accounts for
more than 15% of the Original Pool Balance; (iii) the weighted average Contract
Rate of the Receivables was 6.534%; (iv) there are 43,128 Receivables being
conveyed by Seller to the Trust; (v) the Cutoff Date Principal Balance of the
Receivables was $650,000,017.82; (vi) the weighted average original term and
weighted average remaining term of the Receivables were 63.07 months and 53.59
months, respectively; and (vii) 100% of the Receivables have their next
scheduled payment date in either September, 2005, October, 2005, November, 2005
or December 2005 (other than those loans whose last payment was no more than $20
short of the scheduled payment and that payment, in accordance with the
Servicer’s normal procedures, is not considered past due with regards to that
scheduled payment and other than those Receivables that have been paid ahead as
of the Cutoff Date).

 

(x) Perfection Representations. The Servicer hereby makes the perfection
representations, warranties and covenants attached hereto as Schedule C to the
Trust and the Trust shall be deemed to have relied on such representations,
warranties and covenants in acquiring the Trust Property.

 

SECTION 3.2. [RESERVED]

 

SECTION 3.3. Purchase by Servicer upon Breach of Representation or Warranty.
Seller, Servicer, Indenture Trustee or the Trust, as the case may be, shall
inform the other parties to this Agreement promptly, in writing, upon the
discovery (or, with respect to the Indenture Trustee or the Trust, upon actual
knowledge of a Responsible Officer) of any breach or failure to be true of the
representations or warranties made by the Servicer in Section 3.1; provided that
such breach or failure materially and adversely affects the interests of the
Trust and the Holders in any Receivables; and provided further that the failure
to give such notice shall not affect any obligation of the Servicer. If the
breach or failure shall not have been cured by the last day of the Collection
Period which includes the 60th day (or if the Servicer elects, an earlier day)
after the date on which Servicer becomes aware of, or receives written notice
from the Trust or Indenture Trustee of, such breach or failure, and such breach
or failure materially and adversely affects the interests of the Trust and the
Holders in any Receivable, the Servicer shall purchase each such affected
Receivable from the Trust on or before the Deposit Date following the end of the
Collection Period, which includes the 60th day after the date the Servicer
became aware or was notified of such breach at a purchase price equal to the
Purchase Amount for such Receivable, which amount shall be deposited in the
Collection Account. Notwithstanding the foregoing, any such breach or failure
with respect to the representations and warranties contained in Section 3.1 will
not be deemed to have such a material and adverse effect with respect to a
Receivable if the facts resulting in such breach or failure do not affect the
ability of the Trust to receive and retain payment in full on such Receivable.
In consideration of the purchase of a Receivable hereunder, the Servicer shall
remit the Purchase Amount of such Receivable, no later than the close of
business on the next Deposit Date, in the manner specified in Section 5.4. The
sole remedy (except as provided in Section 7.2 of this Agreement) of the Trust,
the Indenture Trustee or the Holders with respect to a breach or failure to be
true of the representations or warranties made by Servicer pursuant to Section
3.1 shall be to require the Servicer to purchase Receivables pursuant to this
Section 3.3.

 

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With respect to all Receivables purchased pursuant to this Section 3.3, the
Trust shall assign to the Servicer without recourse, representation or warranty
all of the Trust’s right, title and interest in and to such Receivables and all
security and documents relating thereto.

 

SECTION 3.4. Custodian of Receivable Files. (a) Custody. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Trust, upon the execution and delivery of this Agreement, revocably appoints M&I
Bank, as Custodian, as agent, and Custodian accepts such appointment, to act as
agent on behalf of the Trust to maintain custody of the following documents or
instruments, which are hereby constructively delivered to the Trust with respect
to each Receivable (collectively, a “Receivable File”):

 

(i) the fully executed original Receivable;

 

(ii) the original credit application, fully executed by the Obligor or a
photocopy thereof, or a record thereof on a computer file, diskette or on
microfiche;

 

(iii) the original certificate of title or confirmation of security interest, or
such other documents as the applicable Originator keeps on file, in accordance
with its customary procedures, evidencing the security interest of such
Originator in the Financed Vehicle;

 

(iv) originals or true copies of all documents, instruments or writings relating
to extensions, amendments or waivers of the Receivable or a photocopy thereof,
or a record thereof on a computer file, diskette or on microfiche; and

 

(v) any and all other documents or electronic records that the applicable
Originator keeps on file, in accordance with their customary procedures,
relating to the Receivable, any Insurance Policies, the Obligor or the Financed
Vehicle.

 

(b) Safekeeping. M&I Bank, in its capacity as Custodian, shall hold the
Receivable Files as agent on behalf of the Trust and maintain such accurate and
complete accounts, records and computer systems pertaining to each Receivable as
shall enable Servicer and the Trust to comply with the terms and provisions of
this Agreement applicable to them. In performing its duties as Custodian
hereunder, Custodian shall act with reasonable care, exercising the degree of
skill, attention and care that Custodian exercises with respect to receivable
files relating to other similar motor vehicle loans owned and/or serviced by
Custodian and that is consistent with industry standards. In accordance with its
customary practice with respect to its retail installment sale contracts,
Custodian shall conduct, or cause to be conducted, periodic audits of the
Receivable Files held by it under this Agreement, and of the related accounts,
records, and computer systems, and shall maintain the Receivable Files in such a
manner as shall enable the Trust and the Indenture Trustee to verify, if the
Trust or the Indenture Trustee so elects, the accuracy of the record keeping of
Custodian. Custodian shall promptly report to the Trust any failure on its part
to hold the Receivable Files and maintain its accounts, records and computer
systems as herein provided, and promptly take appropriate action to remedy any
such failure. Custodian hereby acknowledges receipt of the Receivable File for
each Receivable listed on the Schedule of Receivables. Nothing herein shall be
deemed to require the Trust, the Owner Trustee or Indenture Trustee to verify
the accuracy of the record keeping of the Custodian.

 

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(c) Maintenance of and Access to Records. Custodian shall maintain each
Receivable File at the location specified in Schedule B to this Agreement, or at
such other office of Custodian within the United States (or, in the case of any
successor Custodian, within the State in which its principal place of business
is located) as shall be specified to the Trust by 30 days’ prior written notice.
Custodian shall make available to the Trust, Indenture Trustee and their
respective agents (or, when requested in writing by the Trust or Indenture
Trustee, their respective attorneys or auditors) the Receivable Files and the
related accounts, records and computer systems maintained by Custodian at such
times as the Trust or Indenture Trustee shall instruct for purposes of
inspecting, auditing or making copies of abstracts of the same, but only upon
reasonable notice and during the normal business hours at the respective offices
of Custodian.

 

(d) Release of Documents. Upon written instructions from Indenture Trustee (or,
if no Notes are then Outstanding, the Trust), Custodian shall release any
document in the Receivable Files to Indenture Trustee or the Trust or its
respective agent or designee, as the case may be, at such place or places as
Indenture Trustee or the Trust may designate, as soon thereafter as is
practicable. Any document so released shall be handled by Indenture Trustee or
the Trust with due care and returned to Custodian for safekeeping as soon as
Indenture Trustee or the Trust or its respective agent or designee, as the case
may be, shall have no further need therefor.

 

(e) Title to Receivables. Custodian agrees that, in respect of any Receivable
File held by Custodian hereunder, Custodian will not at any time have or in any
way attempt to assert any interest in such Receivable File or the related
Receivable, other than solely for the purpose of collecting or enforcing the
Receivable for the benefit of the Trust and that the entire equitable interest
in such Receivable and the related Receivable File shall at all times be vested
in the Trust.

 

(f) Instructions; Authority to Act. Custodian shall be deemed to have received
proper instructions with respect to the Receivable Files upon its receipt of
written instructions signed by an Authorized Officer of Indenture Trustee or the
Trust, as applicable. A certified copy of excerpts of certain resolutions of the
Board of Directors of Indenture Trustee or the Trust, as applicable, shall
constitute conclusive evidence of the authority of any such Authorized Officer
to act and shall be considered in full force and effect until receipt by
Custodian of written notice to the contrary given by Indenture Trustee or the
Trust, as applicable.

 

(g) Custodian’s Indemnification. Subject to Section 10.5, Custodian shall
indemnify and hold harmless the Trust, the Owner Trustee (individually and in
such capacity) and Indenture Trustee (individually and in such capacity), and
each of their respective officers, directors, employees and agents and the
Holders from and against any and all liabilities, obligations, losses,
compensatory damages, payments, costs or expenses (including reasonable legal
fees and expenses if any) of any kind whatsoever that may be imposed on,
incurred or asserted against the Trust, the Owner Trustee, Indenture Trustee or
the Holders as the result of any act or omission of Custodian relating to the
maintenance and custody of the Receivable Files; provided that

 

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Custodian shall not be liable hereunder to the Trust, the Owner Trustee or
Indenture Trustee to the extent that such liabilities, obligations, losses,
compensatory damages, payments, costs or expenses result from the willful
misfeasance, bad faith or negligence of the Trust, the Owner Trustee or
Indenture Trustee, as the case may be. Indemnification under this subsection (g)
shall survive termination of this Agreement and the resignation or removal of
Owner Trustee or Indenture Trustee, as the case may be. If Custodian shall have
made any indemnity payments to the Trust or Indenture Trustee pursuant to this
Section 3.4 and the Trust, the Owner Trustee or Indenture Trustee thereafter
shall collect any of such amounts from Persons other than Custodian, the Trust,
the Owner Trustee or Indenture Trustee, as the case may be, shall, as soon as
practicable following such receipt thereof, repay such amounts to Custodian,
without interest.

 

(h) Effective Period and Termination. Servicer’s appointment as Custodian shall
become effective as of the Cutoff Date and shall continue in full force and
effect until terminated pursuant to this subsection (h). If Servicer shall
resign as Servicer in accordance with Section 7.5 or if all of the rights and
obligations of Servicer shall have been terminated under Section 8.1, the
appointment of Servicer as Custodian hereunder may be terminated by the Trust or
Indenture Trustee or by the Holders of Notes evidencing not less than 25% of the
aggregate Outstanding Amount of the Notes of the Controlling Note Class (or, if
no Notes are then Outstanding, the Holders of Certificates representing not less
than 50% of the Certificate Percentage Interests), in each case in the same
manner as the Trust or Indenture Trustee or such Holders may terminate the
rights and obligations of Servicer under Section 8.1. As soon as practicable
after any termination of such appointment Servicer shall deliver, or cause to be
delivered, the Receivable Files to Indenture Trustee or the Trust, as
applicable, or its respective agent or designee at such place or places as
Indenture Trustee or the Trust, as applicable, may reasonably designate.
Notwithstanding any termination of Servicer as Custodian hereunder (other than
in connection with a termination resulting from the termination of Servicer, as
such, pursuant to Section 8.1), from and after the date of such termination, and
for so long as Servicer is acting as such pursuant to this Agreement, Indenture
Trustee shall provide, or cause the successor Custodian to provide, access to
the Receivable Files to Servicer, at such times as Servicer shall reasonably
request, for the purpose of carrying out its duties and responsibilities with
respect to the servicing of the Receivables hereunder.

 

(i) Delegation. Custodian may, at any time without notice or consent, delegate
any or all of its duties under the Basic Documents to any Affiliate; provided
that no such delegation shall relieve Custodian of its responsibility with
respect to such duties and Custodian shall remain obligated and liable to the
Trust and the Holders for its duties hereunder as if Custodian alone were
performing such duties.

 

ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES.

 

SECTION 4.1. Duties of Servicer. (a) Servicer is hereby authorized to act as
agent for the Trust and in such capacity shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables), and
perform the other actions required by Servicer under this Agreement, with
reasonable care. Without limiting the standard set forth in the preceding
sentence, Servicer shall use a degree of skill, attention and care that is not
less than Servicer exercises with respect to comparable Motor Vehicle Loans that
it services for itself or others and that is consistent with prudent industry
standards. Servicer’s duties shall include the

 

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collection and posting of all payments, responding to inquiries by Obligors on
the Receivables, or by federal, state or local governmental authorities,
investigating delinquencies, sending payment coupons or monthly invoices to
Obligors, reporting required tax information to Obligors, accounting for
Collections, furnishing monthly and annual statements to the Trust and Indenture
Trustee with respect to distributions, providing collection and repossession
services in the event of Obligor default and performing the other duties
specified herein.

 

Without limiting the generality of the foregoing, Servicer is hereby authorized
and empowered by the Trust to execute and deliver, on behalf of itself,
Indenture Trustee, the Trust and the Holders, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Receivables or to the
Financed Vehicles, all in accordance with this Agreement; provided that
notwithstanding the foregoing, Servicer shall not, except pursuant to an order
from a court of competent jurisdiction, release an Obligor from payment of any
unpaid amount under any Receivable or waive the right to collect the unpaid
balance of any Receivable from the Obligor, except in connection with a de
minimis deficiency which Servicer would not attempt to collect in accordance
with its customary procedures. If Servicer shall commence a legal proceeding to
enforce a Receivable, the Trust shall thereupon be deemed to have automatically
assigned such Receivable to Servicer, which assignment shall be solely for
purposes of collection. The Trust shall furnish Servicer with any powers of
attorney and other documents or instruments necessary or appropriate to enable
Servicer to carry out its servicing and administrative duties hereunder.

 

(b) Servicer may, at any time without notice or consent, delegate (i) any or all
duties under this Agreement to any Person that is an Affiliate of the Servicer,
so long as M&I Bank acts as Servicer, or (ii) specific duties to sub-contractors
who are in the business of performing such duties; provided that no such
delegation shall relieve Servicer of its responsibility with respect to such
duties and Servicer shall remain obligated and liable to the Indenture Trustee,
the Trust and the Holders for servicing and administering the Receivables in
accordance with this Agreement as if Servicer alone were performing such duties.

 

(c) The Servicer shall pay the Administrator the fee pursuant to the
Administration Agreement.

 

(d) To the extent any documents are required to be filed or any certification is
required to be made with respect to the Trust or the Notes pursuant to the
Sarbanes-Oxley Act of 2002, the Seller shall prepare, execute and certify any
such documents or certifications and is authorized to file such documents or
certifications on behalf of the Trust and the Indenture Trustee shall make such
filings on behalf of the Seller.

 

(e) The Issuer hereby authorizes the Servicer and the Seller, 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 Securities and Exchange Act of 1934, as amended, and the rules
thereunder.

 

SECTION 4.2. Collection of Receivable Payments. (a) Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due, and
otherwise act with respect to the Receivables, the Physical

 

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Damage Insurance Policies, the Dealer Agreements and related property in such
manner as will, in the reasonable judgment of Servicer, maximize the amount to
be received by the Trust with respect thereto, in accordance with the standard
of care required by Section 4.1. Servicer shall be entitled to grant extensions,
rebates or adjustments on a Receivable, or amend or modify any Receivable in
accordance with its customary procedures if Servicer believes in good faith that
such amendment or modification is in the Trust’s best interests; provided that
Servicer may not, unless ordered by a court of competent jurisdiction or
otherwise required by applicable law, (i) extend a Receivable beyond the Class B
Final Scheduled Payment Date or (ii) reduce the Principal Balance or Contract
Rate of any Receivable. Servicer may, in accordance with its customary
standards, policies and procedures, (i) waive any prepayment charge, late
payment charge, extension fee or any other fee that may be collected in the
ordinary course of servicing a Receivable and (ii) treat a partial scheduled
payment as being a full scheduled payment in the ordinary course of servicing a
Receivable.

 

(b) If in the course of collecting payments under the Receivables, Servicer
determines to set off any obligation of Servicer to an Obligor against an amount
payable by the Obligor with respect to such Receivable, Servicer shall deposit
the amount so set off in the Collection Account, no later than the close of
business on the Deposit Date for the Collection Period in which the set-off
occurs. All references herein to payments or Liquidation Proceeds collected by
Servicer shall include amounts set-off by Servicer.

 

SECTION 4.3. Realization upon Receivables. On behalf of the Trust, Servicer
shall charge off a Receivable in accordance with its customary standards (and,
in no event later than 150 days after a Receivable shall have become delinquent)
and shall use reasonable efforts, consistent with its customary standards, to
repossess and liquidate the Financed Vehicle securing any Defaulted Receivable
as soon as feasible after such Receivable becomes a Defaulted Receivable, in
accordance with the standard of care required by Section 4.1. In taking such
action, Servicer shall follow such customary and usual practices and procedures
as it shall deem necessary or advisable in its servicing of Motor Vehicle Loans,
and as are otherwise consistent with the standard of care required under Section
4.1, which shall include exercising any rights under the Dealer Agreements and
selling the Financed Vehicle at public or private sale. Servicer shall be
entitled to recover all reasonable expenses incurred by it in the course of
repossessing and liquidating a Financed Vehicle into cash proceeds or pursuing
any deficiency claim against the related Obligor, but only out of the cash
proceeds of such Financed Vehicle or any deficiency obtained from the Obligor.
The foregoing shall be subject to the provision that, in any case in which a
Financed Vehicle shall have suffered damage, Servicer, consistent with its
customary servicing procedures, shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine,
consistent with its customary servicing procedures, that such repair and/or
repossession will increase the Liquidation Proceeds of the related Receivable by
an amount equal to or greater than the amount of such expenses.

 

If Servicer elects to commence a legal proceeding to enforce a Dealer Agreement,
the act of commencement shall be deemed to be an automatic assignment from the
Trust to Servicer of the rights under such Dealer Agreement. If, however, in any
enforcement suit or legal proceeding, it is held that Servicer may not enforce a
Dealer Agreement on the grounds that it is not a real party in interest or a
Person entitled to enforce the Dealer Agreement, the Trust and the Indenture
Trustee, subject to the Indenture, at Servicer’s expense, shall take such steps
as Servicer deems necessary to enforce the Dealer Agreement, including bringing
suit in the name of the Trust or Indenture Trustee.

 

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SECTION 4.4. Physical Damage Insurance. (a) The Receivables require that each
Financed Vehicle be insured under a Physical Damage Insurance Policy. It is
understood that Servicer is not required to track and will not “force-place” any
Physical Damage Insurance Policy on any Financed Vehicle.

 

(b) Servicer may sue to enforce or collect upon the Physical Damage Insurance
Policies, in its own name, if possible, or as agent for the Trust. If Servicer
elects to commence a legal proceeding to enforce a Physical Damage Insurance
Policy, the act of commencement shall be deemed to be an automatic assignment of
the rights of the Trust under such Physical Damage Insurance Policy to Servicer
for purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that Servicer may not enforce a Physical Damage Insurance
Policy on the grounds that it is not a real party in interest or a holder
entitled to enforce the Physical Damage Insurance Policy, the Trust and the
Indenture Trustee, subject to the Indenture, at Servicer’s expense and written
direction, shall take such steps as Servicer deems necessary to enforce such
Physical Damage Insurance Policy, including bringing suit in the Trust’s name or
the name of the Indenture Trustee. Servicer shall make all claims and enforce
its rights under any lender’s single interest insurance policy (to the extent
such claims or rights relate to Receivables) for the benefit of the Trust and
shall treat as Collections all related proceeds of such policies.

 

SECTION 4.5. Maintenance of Security Interests in Financed Vehicles. Servicer,
in accordance with the standard of care required under Section 4.1, shall take
such reasonable steps as are necessary and as are consistent with its customary
business practices to maintain perfection of the security interest created by
each Receivable in the related Financed Vehicle for the benefit of the Trust and
the Indenture Trustee. The Trust hereby authorizes Servicer, and Servicer hereby
agrees, to take such reasonable steps as are necessary and as are consistent
with its customary business practices to re-perfect such security interest on
behalf of the Trust in the event Servicer receives notice of the relocation of a
Financed Vehicle.

 

SECTION 4.6. Covenants of Servicer. Servicer makes the following covenants on
which the Trust relies in acquiring the Receivables:

 

(a) Security Interest to Remain in Force. Servicer shall not release any
Financed Vehicle from the security interest granted by the related Receivable in
whole or in part, except upon payment in full of the Receivable or as otherwise
contemplated herein.

 

(b) No Impairment. Servicer shall not impair in any material respect the rights
of the Trust or the Holders in the Receivables, the Dealer Agreements or the
Physical Damage Insurance Policies or, subject to clause (c) below, otherwise
amend or alter the terms thereof if, as a result of such amendment or
alteration, the interests of the Trust and the Holders hereunder would be
materially adversely affected.

 

(c) Amendments. Servicer shall not amend or otherwise modify any Receivable
(including the grant of any extension thereunder), except in accordance with
Section 4.2.

 

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SECTION 4.7. Purchase by Servicer upon Breach of Covenant. Seller, Servicer,
Indenture Trustee or the Trust, as the case may be, shall inform the other
parties promptly, in writing, upon the discovery (or, in the case of the
Indenture Trustee or the Trust, upon actual knowledge of a Responsible Officer)
of any breach by Servicer of its covenants under Section 4.5 or 4.6; provided
that the failure to give such notice shall not affect any obligation of
Servicer. Unless the breach shall have been cured by the last day of the
Collection Period which includes the 60th day (or an earlier day, if Servicer so
elects) after the date on which Servicer becomes aware of, or receives written
notice of, such breach, and such breach materially and adversely affects the
interests of the Trust and the Holders in any Receivable, Servicer shall
purchase such Receivable from the Trust on or before the Deposit Date following
the end of the Collection Period, which includes the 60th day after the date the
Servicer became aware or was notified of such breach at a purchase price equal
to the Purchase Amount for such Receivable, which amount shall be deposited in
the Collection Account prior to noon, New York City time on such date of
purchase. In consideration of the purchase of a Receivable hereunder, Servicer
shall remit the Purchase Amount of such Receivable in the manner specified in
Section 5.4. The sole remedy (except as provided in Section 7.2) of the Trust,
Owner Trustee, Indenture Trustee or the Holders against Servicer with respect to
a breach pursuant to Section 4.5 or 4.6 shall be to require Servicer to purchase
Receivables pursuant to this Section 4.7.

 

With respect to all Receivables purchased pursuant to this Section 4.7, the
Trust shall assign to Servicer, without recourse, representation or warranty,
all of the Trust’s right, title and interest in and to such Receivables and all
security and documents relating thereto.

 

SECTION 4.8. Servicing Fee. On each Payment Date, the Trust shall pay to the
Servicer the Servicing Fee with respect to the immediately preceding Collection
Period as compensation for its services in accordance with Section 5.5(c). The
Servicer shall also be entitled to retain any extension fees and certain
non-sufficient funds charges and other administrative fees or similar charges
allowed by applicable law with respect to Receivables collected (from whatever
source) on the Receivables (the “Supplemental Servicing Fee”). It is understood
and agreed that Available Collections shall not include any amounts retained by
Servicer which constitute Supplemental Servicing Fees. The Servicing Fee in
respect of a Collection Period (together with any portion of the Servicing Fee
that remains unpaid from prior Payment Dates), if the Rating Agency Condition is
satisfied, may be paid at the beginning of such Collection Period out of
Collections for such Collection Period.

 

SECTION 4.9. Servicer’s Report. (a) Before 10:00 a.m. (Central time), on each
Determination Date, Servicer shall deliver to the Trust, Indenture Trustee, each
Paying Agent and Seller, with a copy to the Rating Agencies, a Servicer’s Report
substantially in the form of Exhibit A, containing all information necessary to
make the transfers and distributions pursuant to Sections 5.4 and 5.5 (including
amounts required to be transferred from the Reserve Account to the Collection
Account) for the Collection Period preceding the date of such Servicer’s Report
together with all information necessary for the Trust to send statements to
Certificateholders pursuant to Section 5.6 and Indenture Trustee to send copies
of statements received by the Indenture Trustee to Noteholders pursuant to the
Indenture and Section 5.6 of this Agreement. Receivables to be purchased by the
Servicer shall be identified by Servicer by account number with respect to such
Receivable (as specified in the Schedule of Receivables).

 

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(b) Servicer shall provide Indenture Trustee with a database file for the
Receivables at or prior to the Closing Date (but with information as of the
close of business on the Cutoff Date).

 

SECTION 4.10. Annual Statement as to Compliance; Notice of Default. (a) Servicer
shall deliver to the Trust, Indenture Trustee and each Rating Agency, on or
before March 31 of each year beginning on March 31, 2006, an Officer’s
Certificate, dated as of December 31 of the preceding year, stating that (i) a
review of the activities of Servicer during the preceding 12-month period (or,
in the case of the first such report, during the period from the Closing Date to
December 31, 2005) and of its performance under this Agreement has been made
under such officer’s supervision and (ii) to the best of such officer’s
knowledge, based on such review, Servicer has fulfilled all its obligations in
all material respects under this Agreement throughout such year or, if there
exists any uncured default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof.

 

(b) Servicer shall deliver to the Trust, Indenture Trustee and the Rating
Agencies, promptly after having obtained knowledge thereof, but in no event
later than five (5) Business Days thereafter, written notice in an Officer’s
Certificate of any event which constitutes, or with the giving of notice or
lapse of time, or both, would become a Servicer Termination Event under
Section 8.1.

 

SECTION 4.11. Annual Independent Certified Public Accountants’ Report. The
Servicer shall cause a firm of independent certified public accountants (who may
also render other services to the Servicer or Seller and their Affiliates) to
deliver to the Seller and the Trust, with a copy to the Indenture Trustee, on or
before March 31 of each year beginning on March 31, 2006, (i) a report to the
effect that such firm has examined the Servicer’s assertion that it has complied
with its established minimum servicing standards or (ii) a report of agreed upon
procedures, in each case for the twelve months ended December 31 of the
preceding year (or, in the case of the first such certificate, from the Closing
Date until December 31, 2005), and that such examination was made in accordance
with attestation standards established by the American Institute of Certified
Public Accountants and, accordingly, included examining, on a test basis,
evidence about the Servicer’s compliance with those requirements and performing
such other procedures as such accountants considered necessary in the
circumstances. Additionally, separately obtain representation from the firm of
independent certified public accountants that the firm is independent of
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.

 

In the event such firm requires the Indenture Trustee or the Trust to agree to
the procedures performed by such firm, Servicer shall direct the Indenture
Trustee or the Trust, as the case may be, in writing to so agree; it being
understood and agreed that the Indenture Trustee or the Trust, as the case may
be, will deliver such letter of agreement in conclusive reliance upon the
direction of Servicer, and the Indenture Trustee or the Trust, as the case may
be, need not make any independent inquiry or investigation as to, and shall have
no obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.

 

The Accountants’ Report required by this Section 4.11(a) may be replaced at the
election of the Servicer by any similar report or certification using standards
that are now or in the future

 

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in use by servicers of retail installment sale contracts or direct purchase
money loans and that otherwise comply with any rule, regulation, “no action”
letter or similar guidance promulgated by the Securities and Exchange
Commission, including Regulation AB of the Commission.

 

SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables. Servicer shall provide to the Trust, Indenture Trustee, Bank
Regulatory Authorities, and the supervisory agents and examiners of Bank
Regulatory Authorities access to the Receivable Files, as to the latter in such
cases where the Bank Regulatory Authorities shall be required by applicable
statutes or regulations to review such documentation as demonstrated by evidence
satisfactory to Servicer in its reasonable judgment. Access shall be afforded
without charge, but only upon reasonable request and during the normal business
hours at the respective offices of Servicer. Nothing in this Section 4.12 shall
affect the obligation of Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of Servicer to
provide access to information as a result of such obligation shall not
constitute a breach of this Section 4.12.

 

SECTION 4.13. Reports to the Rating Agencies. Servicer shall deliver to each
Rating Agency a copy of all reports or notices furnished or delivered pursuant
to this Article and a copy of any amendments, supplements or modifications to
this Agreement and any other information reasonably requested by such Rating
Agency to monitor this transaction. Notwithstanding the foregoing, the Servicer
need not deliver a copy of the report described in Section 4.11 to a Rating
Agency unless such Rating Agency complies with the procedures of the related
accounting firm regarding agreement by a recipient to the procedures performed
by such firm.

 

SECTION 4.14. Servicer Expenses. Except as otherwise provided herein, Servicer
shall be required to pay: (i) all expenses incurred by it in connection with its
activities hereunder, as well as fees and disbursements of the Owner Trustee,
Indenture Trustee, independent accountants, taxes imposed on Servicer and
expenses incurred in connection with distributions and reports to
Certificateholders and Noteholders; (ii) all expenses in connection with the
perfection as against third parties of the Seller’s, the Trust’s and the
Indenture Trustee’s right, title and interest in and to the Receivables; (iii)
such fee as set forth in Section 4 of the Administration Agreement to the
Administrator as compensation for its services thereunder; and (iv) expenses of
Northwoods incident to the performance of its obligations under the Purchase
Agreement.

 

ARTICLE V. DISTRIBUTIONS; ACCOUNTS;

STATEMENTS TO CERTIFICATEHOLDERS

AND NOTEHOLDERS; ADVANCES.

 

SECTION 5.1. Establishment of Accounts. (a) Servicer shall cause to be
established:

 

(i) For the benefit of the Noteholders and the Certificateholders, in the name
of Indenture Trustee, an Eligible Deposit Account (the “Collection Account”),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Noteholders and the Certificateholders, which
Eligible Deposit Account shall be established by and maintained with the
Indenture Trustee or its designee.

 

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(ii) For the benefit of the Noteholders, in the name of Indenture Trustee, an
Eligible Deposit Account (the “Principal Distribution Account”), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders, which Eligible Deposit Account shall be established
by and maintained with the Indenture Trustee or its designee.

 

(b) Funds on deposit in the Collection Account and the Principal Distribution
Account shall be invested by Indenture Trustee and by the Trust with respect to
the Certificate Distribution Account (or any custodian with respect to funds on
deposit in any such account) in Eligible Investments selected in writing by
Servicer and of which Servicer provides notification (pursuant to standing
instructions or otherwise); provided that it is understood and agreed that
neither Servicer, Indenture Trustee nor Owner Trustee shall be liable for any
loss arising from such investment in Eligible Investments. All such Eligible
Investments shall be held by or on behalf of Indenture Trustee for the benefit
of the Noteholders and the Certificateholders or by the Trust for the benefit of
Certificateholders, as applicable; provided that on each Payment Date all
interest and other investment income (net of losses and investment expenses) on
funds on deposit in the Trust Accounts shall be distributed to Servicer and
shall not be available to pay the distributions provided for in Section 5.5 and
shall not otherwise be subject to any claims or rights of Holders. Funds on
deposit in the Trust Accounts shall be invested in Eligible Investments that
will mature so that such funds will be available at the close of business on the
Business Day prior to the Deposit Date preceding the next Payment Date; provided
that with the approval of the Indenture Trustee, funds on deposit in the Trust
Accounts may be invested in Eligible Investments that mature on the day prior to
such Payment Date except for investments specified under subparagraph (d) of
“Eligible Investments”. No Eligible Investment shall be sold or otherwise
disposed of prior to its scheduled maturity unless a default occurs with respect
to such Eligible Investment and Servicer directs Indenture Trustee in writing to
dispose of such Eligible Investment. Funds deposited in the Trust Accounts or
Certificate Distribution Account by 10:00 a.m. (Central time) on a Deposit Date
shall be invested overnight.

 

(c) Indenture Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Trust Accounts and in all proceeds thereof
(excluding investment income thereon) and all such funds, investments and
proceeds shall be part of the Owner Trust Estate. Except as otherwise provided
herein, the Trust Accounts shall be under the sole dominion and control of
Indenture Trustee for the benefit of the Noteholders and the Certificateholders;
provided, however, the Indenture Trustee shall not be charged with any
obligation for the benefit of the Certificateholders except as provided by the
terms of this Agreement. If, at any time, any of the Trust Accounts or the
Certificate Distribution Account ceases to be an Eligible Deposit Account, the
Servicer or the Trust, as applicable, shall within 10 Business Days (or such
longer period as to which each Rating Agency may consent) establish a new Trust
Account or Certificate Distribution Account, as applicable, as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such new
Trust Account or new Certificate Distribution Account, as applicable . In
connection with the foregoing, Servicer agrees that, in the event that the
Collection Account is not an account with Indenture Trustee or its designee,
Servicer shall notify Indenture Trustee in writing promptly upon the Collection
Account ceasing to be an Eligible Deposit Account.

 

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(d) With respect to the Trust Account Property, Servicer and the Indenture
Trustee agree that:

 

(i) any Trust Account Property that is held in deposit accounts shall be held
solely in the Eligible Deposit Accounts and, except as otherwise provided
herein, each such Eligible Deposit Account shall be subject to the exclusive
custody and control of Indenture Trustee, and, except as otherwise provided in
the Basic Documents, Indenture Trustee and its designee shall have sole
signature authority with respect thereto;

 

(ii) any Trust Account Property that constitutes Physical Property shall be
delivered to Indenture Trustee or its designee, in accordance with paragraph
(a) of the definition of “Delivery” and shall be held, pending maturity or
disposition, solely by Indenture Trustee or such designee;

 

(iii) any Trust Account Property that is an “uncertificated security” under
Article 8 of the UCC and that is not governed by clause (ii) above shall be
delivered to Indenture Trustee or its designee in accordance with paragraph
(c) of the definition of “Delivery” and shall be maintained by Indenture Trustee
or such designee, pending maturity or disposition, through continued
registration of Indenture Trustee’s (or its designee’s) ownership of such
security.

 

(iv) any Trust Account Property that is a book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations shall be
delivered in accordance with paragraph (b) of the definition of “Delivery” and
shall be maintained by Indenture Trustee or its designee or a financial
intermediary (as such term is defined in Section 8-313(4) of the UCC) acting
solely for Indenture Trustee or such designee, pending maturity or disposition,
through continued book-entry registration of such Trust Account Property as
described in such paragraph; and

 

Effective upon Delivery of any Trust Account Property, Servicer shall be deemed
to have represented that it has purchased such Trust Account Property for value,
in good faith and without notice of any adverse claim thereto.

 

SECTION 5.2. Collections. Servicer shall remit all Collections within two
Business Days of receipt thereof to the Collection Account (other than any
amounts constituting Supplemental Servicing Fees) and all Liquidation Proceeds.
Notwithstanding the foregoing, if M&I Bank is the Servicer and (i) M&I Bank
shall have the Required Rating or (ii) Indenture Trustee shall have received
written notice from each of the Rating Agencies that the then outstanding rating
on the Notes would not be lowered, qualified or withdrawn as a result, Servicer
may deposit all amounts referred to above received during any Collection Period
into the Collection Account not later than 11:00 a.m. (New York time) on the
Deposit Date with respect to such Collection Period; provided that (i) if a
Servicer Termination Event has occurred and is continuing, (ii) Servicer has
been terminated as such pursuant to Section 8.1 or (iii) Servicer ceases to have
the Required Rating, Servicer shall deposit such amounts (including any amounts
then being held by Servicer) into the Collection Account as provided in the
preceding sentence.

 

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SECTION 5.3. [RESERVED]

 

SECTION 5.4. Additional Deposits. Servicer shall deposit or cause to be
deposited in the Collection Account the aggregate Purchase Amounts with respect
to Purchased Receivables and Servicer shall deposit therein all amounts, if any,
to be paid under Section 9.1. All such deposits shall be made not later than the
11:00 a.m. (New York time) on the Deposit Date following the end of the related
Collection Period.

 

SECTION 5.5. Distributions. (a) On or before 11:00 a.m. (New York time) on the
Deposit Date related to each Payment Date, Servicer shall instruct Indenture
Trustee in writing (based solely on the information contained in the Servicer’s
Report delivered on the related Determination Date pursuant to Section 4.9) to
withdraw from the Reserve Account and deposit in the Collection Account, and
Indenture Trustee shall so withdraw and deposit in the Collection Account by
11:00 a.m. (New York time) on such Deposit Date, the Reserve Account Excess
Amount, if any, and the Reserve Account Transfer Amount, if any, for such
Payment Date.

 

(b) [RESERVED]

 

(c) Subject to the last paragraph of this Section 5.5(c) and prior to any
acceleration of the Notes pursuant to Section 5.2 of the Indenture, on or before
11:00 a.m. (New York time) on each Payment Date, the Indenture Trustee (based
solely on the information contained in the Servicer’s Report delivered on the
related Determination Date pursuant to Section 4.9) shall make the following
deposits, distributions and payments from the Collection Account for such
Payment Date, to the extent of the Total Distribution Amount in the following
order of priority:

 

(i) first, to the Servicer (or any predecessor Servicer, if applicable) for
reimbursement of all Outstanding Simple Interest Advances;

 

(ii) second, to the Servicer, the Servicing Fee and all unpaid Servicing Fees
from prior Collection Periods;

 

(iii) third, pro rata (based on the amount of interest due on each class
relative to the total amount of interest due to the holders of the notes), to
the Class A Noteholders, to pay the Accrued Class A Note Interest;

 

(iv) fourth, to the Principal Distribution Account for distribution to the
Noteholders pursuant to Section 5.5(d) of this Agreement, the First Priority
Principal Distribution Amount, if any;

 

(v) fifth, to the Class B Noteholders, the Accrued Class B Note Interest;

 

(vi) sixth, to the Principal Distribution Account for distribution to the
Noteholders pursuant to Section 5.5(d) of this Agreement, the Regular Principal
Distribution Amount, if any;

 

(vii) seventh, to the Reserve Account, the amount, if any, required to reinstate
the amount in the Reserve Account (other than interest income and earnings) up
to the Specified Reserve Balance; and

 

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(viii) eighth, to the Certificate Distribution Account, the Total Distribution
Amount remaining on deposit in the Collection Account.

 

Notwithstanding any other provision of this Section 5.5, following the
occurrence and during the continuation of an Event of Default specified in
Section 5.1(a), 5.1(b), 5.1(d) or 5.1(e) of the Indenture which has resulted in
an acceleration of the Notes (or following the occurrence of any such event
after an Event of Default specified in Section 5.1(c) of the Indenture has
occurred and the Trust has been liquidated), the Servicer shall instruct the
Indenture Trustee at or before aforesaid time to transfer the funds on deposit
in the Collection Account pursuant to Section 5.4(b) of the Indenture.

 

In the event that the Collection Account is maintained with an institution other
than Indenture Trustee, Servicer shall instruct and cause such institution to
make all deposits and distributions pursuant to this Section 5.5(c) on the
related Payment Date.

 

(d) On each Payment Date, prior to any acceleration of the Notes pursuant to
Section 5.2 of the Indenture, the Indenture Trustee (based on the information
contained in the Servicer’s Report delivered on or before the related
Determination Date pursuant to Section 4.9) shall withdraw the funds on deposit
in the Principal Distribution Account with respect to the Collection Period
preceding such Payment Date and make distributions and payments in the following
order of priority:

 

(i) first, to the Noteholders of the Class A-1 Notes in reduction of principal
until the principal amount of the Outstanding Class A-1 Notes has been paid in
full; provided that if there are not sufficient funds available to pay the
principal amount of the Outstanding Class A-1 Notes in full, the amounts
available shall be applied to the payment of principal on the Class A-1 Notes on
a pro rata basis;

 

(ii) second, to the Noteholders of the Class A-2 Notes in reduction of principal
until the principal amount of the Outstanding Class A-2 Notes has been paid in
full; provided that if there are not sufficient funds available to pay the
principal amount of the Outstanding Class A-2 Notes in full, the amounts
available shall be applied to the payment of principal on the Class A-2 Notes on
a pro rata basis;

 

(iii) third, to the Noteholders of the Class A-3 Notes in reduction of principal
until the principal amount of the Outstanding Class A-3 Notes has been paid in
full; provided that if there are not sufficient funds available to pay the
principal amount of the Outstanding Class A-3 Notes in full, the amounts
available shall be applied to the payment of principal on the Class A-3 Notes on
a pro rata basis;

 

(iv) fourth, to the Noteholders of the Class A-4 Notes in reduction of principal
until the principal amount of the Outstanding Class A-4 Notes has been paid in
full; provided that if there are not sufficient funds available to pay the
principal amount of the Outstanding Class A-4 Notes in full, the amounts
available shall be applied to the payment of principal on the Class A-4 Notes on
a pro rata basis; and

 

(v) fifth, to the Noteholders of the Class B Notes in reduction of principal
until the principal amount of the Outstanding Class B Notes has been paid in
full; provided that if

 

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there are not sufficient funds available to pay the principal amount of the
Outstanding Class B Notes in full, the amounts available shall be applied to the
payment of principal on the Class B Notes on a pro rata basis.

 

(e) Indenture Trustee shall continue to perform its duties under this Agreement
until the Outstanding Amount of the Notes has been reduced to zero and the
Indenture has been discharged in accordance with its terms. The protections,
immunities and standard of care afforded the Indenture Trustee under the
Indenture shall apply to the performance of its duties hereunder.

 

SECTION 5.6. Statements to Certificateholders and Noteholders. On each
Determination Date, Servicer shall provide to Indenture Trustee (with a copy to
each Rating Agency) written instructions for Indenture Trustee to forward to
each Noteholder of record, to each Paying Agent, if any, and to Owner Trustee
for Owner Trustee to forward on each Payment Date to each Certificateholder of
record, a statement prepared by the Servicer setting forth at least the
following information (based on the information contained in the Servicer’s
Report delivered on the related Determination Date pursuant to Section 4.9) as
to the Notes and the Certificates to the extent applicable:

 

(a) the amount of such distribution allocable to principal of each class of
Notes;

 

(b) the amount of such distribution allocable to interest on or with respect to
each class of Notes;

 

(c) the Reserve Account Transfer Amount, if any, for such Payment Date, the
Specified Reserve Balance for such Payment Date, the amount deposited into the
Reserve Account on such Payment Date, and the balance of the Reserve Account (if
any) on such Payment Date, after giving effect to changes therein on such
Payment Date;

 

(d) the First Priority Principal Distribution Amount and the Regular Principal
Distribution Amount for such Payment Date;

 

(e) the amount of the Servicing Fee paid to Servicer with respect to the related
Collection Period and with respect to previously accrued and unpaid Servicing
Fees;

 

(f) the Class A Noteholders’ Interest Carryover Shortfall and Class B
Noteholders’ Interest Carryover Shortfall, if any, and the change in such
amounts from the preceding statement;

 

(g) the amount of any previously due and unpaid payment of principal on the
Notes, and the change in such amount from that of the prior Payment Date;

 

(h) the aggregate outstanding principal balance of each class of the Notes and
the Note Pool Factor for each such class after giving effect to payments
allocated to principal reported under clause (a) above;

 

(i) the aggregate Purchase Amounts paid by Servicer with respect to the related
Collection Period;

 

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(j) the Pool Balance as of the close of business on the last day of the
preceding Collection Period;

 

(k) the number, and aggregate Principal Balance outstanding, of Receivables past
due 30-59, 60-89 and 90 and over days;

 

(l) the weighted average Contract Rates of the Receivables, weighted based on
the Principal Balance of each such Receivable as of the last day of the related
Collection Period;

 

(m) the weighted average remaining term to maturity of the Receivables, weighted
based on the Principal Balance of each such Receivable as of the last day of the
related Collection Period;

 

(n) the amount of the aggregate Principal Balances of any Receivables that
became Defaulted Receivables, if any, during such Collection Period;

 

(o) the aggregate net losses on the Receivables incurred during the period from
the Cutoff Date to and including the last day of the related Collection Period;

 

(p) the amount distributed to Certificateholders; and

 

(q) the amount of Outstanding Simple Interest Advances on such Payment Date.

 

Each amount set forth pursuant to paragraph (a), (b), (e) or (f) above relating
to the Notes shall be expressed as a dollar amount per $1,000 of the Initial
Principal Balance of the Notes (or Class thereof).

 

SECTION 5.7. Net Deposits. As an administrative convenience, unless Servicer is
required to remit Collections within two Business Days of receipt thereof,
Servicer will be permitted to make the deposit of Collections and Purchase
Amounts for or with respect to a Collection Period net of distributions to be
made to Servicer with respect to such Collection Period. Servicer, however, will
account to the Trust, Indenture Trustee, the Noteholders and the
Certificateholders as if all deposits, distributions and transfers were made
individually.

 

SECTION 5.8. Reserve Account. (a) On or before the Closing Date pursuant to
Section 8.6 of the Indenture, the Trust shall establish or cause to be
established in the name of the Indenture Trustee, as secured party of and agent
for the Noteholders and Certificateholders, an Eligible Deposit Account (the
“Reserve Account”). The Reserve Account and any amounts therein shall be pledged
to the Indenture Trustee and held for the benefit of the Noteholders and
Certificateholders. The Reserve Account shall be established by and maintained
with the Indenture Trustee or its designee (the “Securities Intermediary”).

 

(b) On the Closing Date, the Seller shall purchase investments meeting the
requirements of subparagraph (c) of the definition of Eligible Investments and
having a principal amount on the Closing Date equal to the Reserve Account
Deposit Amount (the “Reserve Account Deposit”) and shall transfer the Reserve
Account Deposit to the Trust. Immediately upon receipt of the Reserve Account
Deposit on the Closing Date, the Trust shall deliver the Reserve Account Deposit
to the Indenture Trustee and the Indenture Trustee shall deposit the Reserve
Account Deposit into the Reserve Account.

 

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SECTION 5.9. Monthly Advances. On or before 11:00 a.m. (New York time) on each
Deposit Date, the Servicer shall deposit into the Collection Account the Simple
Interest Advance for the related Payment Date. The Servicer shall not make any
advance with respect to principal of any Simple Interest Receivable and the
Servicer shall only make advances of interest with respect to any Receivable to
the extent that the Servicer, in accordance with its customary servicing
procedures, shall determine that such advance shall be recoverable from
subsequent collections or recoveries on such Receivable.

 

ARTICLE VI. SELLER

 

SECTION 6.1. Representations of Seller. On the Closing Date, Seller makes the
following representations to each of the parties hereto on which the Trust is
deemed to have relied in acquiring the Receivables and the other properties and
rights included in the Owner Trust Estate and the Indenture Trustee is deemed to
have relied in accepting administration of its trusts. The representations speak
as of the execution and delivery of this Agreement and shall survive the sale of
the Receivables to the Trust and the pledge thereof to Indenture Trustee
pursuant to the Indenture.

 

(a) Organization and Good Standing. Seller has been duly organized and is
validly existing as a Delaware limited liability company in good standing under
the laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted and had at all relevant times, and has,
full power, authority and legal right to acquire, own and sell the Receivables
and the other properties and rights included in the Owner Trust Estate assigned
to the Trust pursuant to Article II.

 

(b) Due Qualification. Seller is duly qualified to do business as a limited
liability company in good standing, and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property or
the conduct of its business shall require such qualifications, except where the
failure to so obtain would not have a material adverse impact either on Seller,
the transactions contemplated in the Basic Documents or the Receivables.

 

(c) Power and Authority. Seller has the power, authority and legal right to
execute and deliver this Agreement and the Basic Documents to which it is a
party and to carry out their respective terms and to sell and assign the
property to be sold and assigned to and deposited with the Trust as the Owner
Trust Estate; and the execution, delivery and performance of this Agreement and
the Basic Documents to which it is a party have been duly authorized by Seller
by all necessary action.

 

(d) No Consent Required. No approval, authorization, consent, license or other
order or action of, or filing or registration with, any governmental authority,
bureau or agency is required in connection with the execution, delivery or
performance of this Agreement or the Basic Documents to which it is a party or
the consummation of the transactions contemplated hereby or thereby, other than
(i) as may be required under the blue sky or securities laws of any State or the
Securities Act of 1933, as amended, and (ii) the filing of UCC financing
statements.

 

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(e) Valid Sale; Binding Obligation. Seller intends this Agreement to effect a
valid sale, transfer, and assignment of the Receivables and the other properties
and rights included in the Owner Trust Estate conveyed by Seller to the Trust
hereunder, enforceable against creditors of and purchasers from Seller; and each
of this Agreement and the Basic Documents to which it is a party constitutes a
legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its respective terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws affecting enforcement of the
rights of creditors generally and to equitable limitations on the availability
of specific remedies.

 

(f) No Violation. The execution, delivery and performance by Seller of this
Agreement and the Basic Documents to which it is a party and the consummation of
the transactions contemplated hereby and thereby will not conflict with, result
in any material breach of any of the terms and provisions of, constitute (with
or without notice or lapse of time) a material default under or result in the
creation or imposition of any Lien upon any of its material properties pursuant
to the terms of, (i) the limited liability company agreement of Seller, (ii) any
material indenture, contract, lease, mortgage, deed of trust or other instrument
or agreement to which Seller is a party or by which Seller is bound, or
(iii) any law, order, rule or regulation applicable to Seller of any federal or
state regulatory body, any court, administrative agency, or other governmental
instrumentality having jurisdiction over Seller.

 

(g) No Proceedings. There are no proceedings or investigations pending, or, to
the knowledge of Seller, threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality having
jurisdiction over Seller or its properties: (i) asserting the invalidity of this
Agreement, any other Basic Document, the Notes or the Certificates, (ii) seeking
to prevent the issuance of the Notes or Certificates or the consummation of any
of the transactions contemplated by this Agreement or any other Basic Document,
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by Seller of its obligations under, or the validity or
enforceability of, this Agreement, any other Basic Document, the Notes or the
Certificates, to the extent applicable, or (iv) that may materially and
adversely affect the federal or state income, excise franchise or similar tax
attributes of the Trust, the Notes or the Certificates.

 

(h) Chief Executive Office. The chief executive office of Seller is 770 North
Water Street NW5, Milwaukee, Wisconsin 53202.

 

(i) Good Title. Immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to the Receivables free
and clear of any lien and had full right and power to transfer and assign the
Receivables to the Trust.

 

SECTION 6.2. Continued Existence. During the term of this Agreement, subject to
Section 6.4, Seller will keep in full force and effect its existence, rights and
franchises as a limited liability company organized under the laws of the State
of Delaware and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall

 

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be necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or appropriate
to the proper administration of this Agreement and the transactions contemplated
hereby.

 

SECTION 6.3. Liability of Seller; Indemnities. Subject to Section 10.5, Seller
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by Seller under this Agreement.

 

(a) Seller shall indemnify, defend and hold harmless the Trust, Owner Trustee
(individually and in its capacity as such), Indenture Trustee (individually and
in its capacity as such), the Certificateholders and the Noteholders and the
respective officers, directors, employees and agents of the Trust, Owner Trustee
and Indenture Trustee from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent arising out of, or imposed upon
such Person through or as a result of (i) Seller’s wilful misfeasance, bad faith
or gross negligence (other than errors in judgement) in the performance of its
duties under this Agreement, or by reason of breach of contract or reckless
disregard of its obligations and duties under this Agreement or any other Basic
Document and (ii) Seller’s violation of Federal or state securities laws in
connection with the offering and sale of the Notes and the Certificates or in
connection with any application relating to the Notes or Certificates under any
state securities laws.

 

(b) Seller shall pay any and all taxes levied or assessed upon the Trust or upon
all or any part of the Owner Trust Estate.

 

Indemnification under this Section 6.3 shall survive the resignation or removal
of Owner Trustee or Indenture Trustee and the termination of this Agreement or
any other Basic Document, and shall include reasonable fees and expenses of
counsel and other expenses of litigation. If Seller shall have made any
indemnity payments pursuant to this Section 6.3 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 Seller, without
interest.

 

SECTION 6.4. Merger or Consolidation of, or Assumption of the Obligations of,
Seller. Any Person (a) into which Seller may be merged or consolidated, (b)
which may result from any merger or consolidation to which Seller shall be a
party or (c) which may succeed to the properties and assets of Seller
substantially as a whole, shall be the successor to Seller without the execution
or filing of any document or any further act by any of the parties to this
Agreement; provided that Seller hereby covenants that it will not consummate any
of the foregoing transactions except upon satisfaction of the following: (i) the
surviving Seller if other than M&I Dealer Auto Securitization, LLC, executes an
agreement of assumption to perform every obligation of Seller under this
Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.1 or 6.1 shall have been
breached, (iii) Seller shall have delivered to the Trust and Indenture Trustee
an Officer’s Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section 6.3 and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with, and that the
Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Seller shall have a consolidated net worth at
least equal to that of the predecessor

 

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Seller, (v) such transaction will not result in a material adverse federal or
state tax consequence to the Trust, the Noteholders or the Certificateholders
and (vi) unless M&I Dealer Auto Securitization, LLC is the surviving entity,
Seller shall have delivered to the Trust and Indenture Trustee an Opinion of
Counsel either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of the
Trust and Indenture Trustee, respectively, in the Receivables and reciting the
details of such filings, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such interests.

 

SECTION 6.5. Limitation on Liability of Seller and Others. Seller and any
director or officer or employee or agent of Seller may 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 any Basic
Document (provided that such reliance shall not limit any way Seller’s
obligations under Section 3.3 or Section 6.3). Seller shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.

 

SECTION 6.6. Seller May Own Certificates or Notes. Seller and any Affiliate
thereof may in its individual or any other capacity become the owner or pledgee
of Certificates or Notes with the same rights as it would have if it were not
Seller or an Affiliate thereof, except as expressly provided herein or in any
Basic Document. Except as set forth herein or in the other Basic Documents,
Notes and Certificates so owned by or pledged to Seller or any such Affiliate
shall have an equal and proportionate benefit under the provisions of this
Agreement and the other Basic Documents, without preference, priority, or
distinction as among all of the Notes and Certificates of the same class.

 

SECTION 6.7. Security Interest. During the term of this Agreement, Seller will
not take any action to assign the security interest in any Financed Vehicles
other than pursuant to the Basic Documents.

 

ARTICLE VII. SERVICER.

 

SECTION 7.1. Representations of Servicer. Servicer makes the following
representations on which the Trust is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate and the Indenture Trustee and the Trust are deemed to have relied in
accepting administration of their trusts. The representations speak as of the
execution and delivery of the Agreement and shall survive the sale, transfer and
assignment of the Receivables to the Trust and the pledge thereof to Indenture
Trustee pursuant to the Indenture.

 

(a) Organization and Good Standing. Servicer has been duly organized and is
validly existing as a state banking corporation in good standing under the laws
of the State of Wisconsin, with the power and authority to own its properties
and to conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and shall have,
the power, authority and legal right to service the Receivables and the other
properties and rights included in the Owner Trust Estate.

 

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(b) Due Qualification. Servicer is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property or
the conduct of its business (including the servicing of the Receivables as
required by this Agreement) shall require such qualifications.

 

(c) Power and Authority. Servicer has the power, authority and legal right to
execute and deliver this Agreement and the Basic Documents to which it is a
party and to carry out their respective terms; and the execution, delivery and
performance of this Agreement and the Basic Documents to which it is a party
have been duly authorized by Servicer by all necessary corporate action.

 

(d) No Consent Required. No approval, authorization, consent, license or other
order or action of, or filing or registration with, any governmental authority,
bureau or agency is required in connection with the execution, delivery or
performance of this Agreement, the Basic Documents to which it is a party or the
consummation of the transactions contemplated hereby or thereby, other than
(i) as may be required under the blue sky or securities laws of any State or the
Securities Act of 1933, as amended, and (ii) the filing of UCC financing
statements.

 

(e) Binding Obligation. Each of this Agreement and the Basic Documents to which
it is a party constitutes a legal, valid and binding obligation of Servicer,
enforceable against Servicer in accordance with its respective terms, subject,
as to enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws affecting
enforcement of the rights of creditors of banks generally and to equitable
limitations on the availability of specific remedies.

 

(f) No Violation. The execution, delivery and performance by Servicer of this
Agreement and the Basic Documents to which it is a party and the consummation of
the transactions contemplated hereby and thereby will not conflict with, result
in any material breach of any of the terms and provisions of, constitute (with
or without notice or lapse of time) a material default under, or result in the
creation or disposition of any Lien upon any of its material properties pursuant
to the terms of, (i) the organizational documents of Servicer, (ii) any material
indenture, contract, lease, mortgage, deed of trust or other instrument or
agreement to which Servicer is a party or by which Servicer is bound, or
(iii) any law, order, rule or regulation applicable to Servicer of any federal
or state regulatory body, any court, administrative agency, or other
governmental instrumentality having jurisdiction over Servicer.

 

(g) No Proceedings. There are no proceedings or investigations pending, or, to
Servicer’s knowledge, threatened, before any court, regulatory body,
administrative agency, or tribunal or other governmental instrumentality having
jurisdiction over Servicer or its properties: (i) asserting the invalidity of
this Agreement, any other Basic Document, the Notes or the Certificates,
(ii) seeking to prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this Agreement or any
other Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Servicer of its obligations
under, or the validity or enforceability of, this

 

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Agreement, any other Basic Document, the Notes or the Certificates, to the
extent applicable, or (iv) that may materially and adversely affect the federal
or state income, excise, franchise or similar tax attributes of the
Certificates.

 

SECTION 7.2. Indemnities of Servicer. (a) Subject to Section 10.5, Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by Servicer under this Agreement or the other Basic
Documents.

 

(b) Servicer shall indemnify, defend and hold harmless the Trust, Owner Trustee
(individually and in its capacity as such), JPMorgan (individually and as agent
on behalf of PREFCO and Falcon), PREFCO, Falcon, Northwoods, Indenture Trustee
(individually and in its capacity as such), Seller, the Certificateholders and
the Noteholders and any of the respective officers, directors, employees and
agents of the Trust, the Owner Trustee, Indenture Trustee, JPMorgan
(individually and as agent on behalf of PREFCO and Falcon), PREFCO, Falcon,
Northwoods or Seller from any and all costs, expenses, losses, claims, damages
and liabilities (including reasonable attorneys’ fees and expenses) to the
extent arising out of, or imposed upon any such Person through (i) the gross
negligence, willful misfeasance, breach of contract or bad faith (other than
errors in judgment) of Servicer or Northwoods in the performance of their
respective obligations and duties under this Agreement or any other Basic
Document or in the performance of the obligations and duties of any subcustodian
or subservicer in the performance of its obligations and duties under any
custody or subservicing agreement (ii) the failure of any Receivable conveyed by
Transferors to the Purchaser under the Purchase Agreement and by the Seller to
the Trust hereunder, or the sale of the related Financed Vehicle, to comply with
all the requirements of applicable law, and (iii) any breach of any of M&I
Bank’s representations, warranties or covenants contained herein or in any other
Basic Document; provided however, any indemnification amounts owed pursuant to
this Section 7.2 with respect of a Receivable shall give effect to and not be
duplicative of the Purchase Amounts paid by the Servicer pursuant to Sections
3.3 and 4.7 hereunder. Notwithstanding the foregoing, if Servicer is rendered
unable, in whole or in part, by virtue of an act of God, act of war, fires,
earthquake or other natural disasters, to satisfy its obligations under this
Agreement, Servicer shall not be deemed to have breached any such obligation
upon the sending of written notice of such event to the other parties hereto,
for so long as Servicer remains unable to perform such obligation as a result of
such event. This provision shall not be construed to limit Servicer’s or any
other party’s rights, obligations, liabilities, claims or defenses which arise
as a matter of law or pursuant to any other provision of this Agreement.

 

(c) Servicer shall indemnify, defend and hold harmless the Seller, the Trust,
Owner Trustee (individually and in its capacity as such), and Indenture Trustee
(individually and in its capacity as such) and their respective officers,
directors, employees and agents from and against any taxes that may at any time
be asserted against any such Person with respect to the transactions
contemplated in this Agreement or in the other Basic Documents, including any
sales, gross receipts, general corporation, tangible or intangible personal
property, franchise, privilege, or license taxes, or any taxes of any kind which
may be asserted (not including any federal or other income taxes arising out of
transactions contemplated by this Agreement and the other Basic Documents)
against the Trust, Owner Trustee (individually and in its capacity as such), and
costs and expenses in defending against the same.

 

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(d) Servicer shall indemnify, defend and hold harmless the Trust, Owner Trustee
(individually and in its capacity as such), JPMorgan (as agent on behalf of
PREFCO and Falcon), Northwoods, Indenture Trustee (not individually but solely
in its capacity as Indenture Trustee), Seller, Certificateholders and the
Noteholders or any of the respective officers, directors, employees and agents
of the Trust, the Owner Trustee, Indenture Trustee, JPMorgan (as agent on behalf
of PREFCO and Falcon), Northwoods or Seller from any and all costs, expenses,
losses, claims, damages and liabilities (including reasonable attorneys’ fees
and expenses) to the extent arising out of or imposed upon any such Person as a
result of any compensation payable to any subcustodian or subservicer (including
any fees payable in connection with the release of any Receivable File from the
custody of such subservicer or in connection with the termination of the
servicing activities of such subservicer with respect to any Receivable) whether
pursuant to the terms of any subservicing agreement or otherwise.

 

(e) Servicer shall indemnify, defend and hold harmless the Trust, Owner Trustee
(individually and in its capacity as such), Indenture Trustee (individually and
in its capacity as such), JPMorgan (as agent on behalf of PREFCO and Falcon),
Seller, the Certificateholders and the Noteholders or any of the respective
directors, officers, employees and agents of the Trust, the Owner Trustee,
Indenture Trustee, JPMorgan and Seller from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation, arising out of or resulting from
the use, ownership, or operation by the Servicer, any Transferor or any
Affiliate thereof of any Financed Vehicle.

 

Indemnification under this Section 7.2 shall survive the resignation or removal
of Owner Trustee or Indenture Trustee and the termination of this Agreement and
the other Basic Documents, as applicable, and shall include reasonable fees and
expenses of counsel and other expenses of litigation. If Servicer shall have
made any indemnity payments pursuant to this Section 7.2 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 Servicer,
without interest.

 

SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations of,
Servicer. Any Person (a) into which Servicer may be merged or consolidated, (b)
which may result from any merger or consolidation to which Servicer shall be a
party, (c) which may succeed to the properties and assets of Servicer,
substantially as a whole, or (d) 50% of the voting stock of which is owned
directly or indirectly by Marshall & Ilsley Corporation may become the successor
to Servicer; provided that, unless M&I Bank is the surviving party to such
transaction, promptly upon consummation of any of the foregoing, Servicer: (i)
shall execute an agreement of assumption to perform every obligation of Servicer
under this Agreement and (ii) shall have delivered to the Trust and Indenture
Trustee an Officer’s Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section 7.3.

 

SECTION 7.4. Limitation on Liability of Servicer and Others. Neither Servicer
nor any of its directors, officers, employees or agents shall be under any
liability to the Trust, Owner Trustee, Indenture Trustee, JPMorgan (as agent on
behalf of PREFCO and Falcon), Northwoods, Seller, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action by Servicer or any
subservicer

 

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pursuant to this Agreement or for errors in judgment; provided that this
provision shall not protect Servicer or any such person against any liability
that would otherwise be imposed by reason of willful misfeasance, bad faith,
breach of contract or gross negligence in the performance of duties (except for
errors in judgment) under this Agreement. Servicer or any subservicer and any of
their respective directors, officers, employees or agents may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.

 

Except as provided in this Agreement, Servicer shall not be under any obligation
to appear in, prosecute or defend any legal action that shall not be incidental
to its duties to service the Receivables in accordance with this Agreement and
that in its opinion may involve it in any expense or liability; provided that
Servicer may (but shall not be required to) undertake any reasonable action that
it may deem necessary or desirable in respect of the Basic Documents to protect
the interests of the Certificateholders under this Agreement and the Noteholders
under the Indenture. In such event, the legal expense and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities
of the Servicer.

 

SECTION 7.5. M&I Bank Not To Resign as Servicer. Subject to the provisions of
Section 7.3, M&I Bank hereby agrees not to resign from the obligations and
duties hereby imposed on it as Servicer under this Agreement except upon
determination that the performance of its duties hereunder shall no longer be
permissible under applicable law or if such resignation is required by
regulatory authorities. Notice of any such determination permitting the
resignation of M&I Bank as Servicer shall be communicated to the Trust and
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 Trust and Indenture Trustee concurrently with or
promptly after such notice. No such resignation shall become effective until the
earlier of Indenture Trustee or a Successor Servicer having assumed the
responsibilities and obligations of the resigning Servicer in accordance with
Section 8.2 or the date upon which any regulatory authority requires such
resignation.

 

SECTION 7.6. Existence. Subject to the provisions of Section 7.3, during the
term of this Agreement, M&I Bank will keep in full force and effect its
existence, rights and franchises as a Wisconsin state banking corporation and as
a foreign corporation in all jurisdictions which the ownership or lease of
property or the conduct of its business (including the servicing of Receivables
as required by this Agreement) shall require such qualifications.

 

SECTION 7.7. 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 expressly
provided herein or in any Basic Document. Except as set forth herein or in the
other Basic Documents, Notes and Certificates so owned by or pledged to Servicer
or any such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement and the other Basic Documents, without preference,
priority, or distinction as among all of the Notes and Certificates of the same
class.

 

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ARTICLE VIII. SERVICER TERMINATION EVENTS.

 

SECTION 8.1. Servicer Termination Event. If any one of the following events (a
“Servicer Termination Event”) shall occur and be continuing:

 

(a) any failure by Servicer to deliver to Indenture Trustee and the Trust the
Servicer’s Report in accordance with Section 4.9, or any failure by Servicer to
deliver to Indenture Trustee or the Trust for deposit in any of the Trust
Accounts or the Certificate Distribution Account any required payment or to
direct Indenture Trustee or the Trust to make any required distributions
therefrom that shall continue unremedied for a period of five Business Days
after written notice of such failure is received by Servicer from the Trust or
Indenture Trustee or after discovery of such failure by an Authorized Officer of
Servicer; or

 

(b) failure on the part of Servicer duly to observe or to perform in any
material respect any other covenants or agreements of Servicer set forth in this
Agreement or any other Basic Document to which it is a party (other than a
breach of the representations and warranties regarding the Receivables set forth
in Section 3.1), which failure shall (i) materially and adversely affect the
rights of either the Certificateholders or Noteholders and (ii) continue
unremedied for a period of 60 days after discovery of such failure by an
Authorized Officer of Servicer or after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A) to
Servicer or Seller by the Trust or Indenture Trustee or (B) to Servicer or
Seller and to the Trust and Indenture Trustee by the Holders of Notes evidencing
not less than 25% of the Outstanding Amount of the Notes of the Controlling Note
Class or, if no Notes are outstanding, Holders of Certificates evidencing not
less than 25% of the outstanding Certificate Percentage Interests, as
applicable; or

 

(c) an Insolvency Event occurs with respect to Servicer or any of its respective
successors;

 

then, and in each and every case, so long as any Servicer Termination Event
shall not have been remedied, either Indenture Trustee, or the Holders of Notes
evidencing greater than 50% of the Outstanding Amount of the Notes of the
Controlling Note Class (or, if no Notes are then Outstanding, either the Trust
or the Holders of the Certificates evidencing greater than 50% of the
Certificate Percentage Interests), by notice then given in writing to Servicer
(and to the Trust or Indenture Trustee, as applicable, if given by the Holders,
and the Rating Agencies) may terminate all the rights and obligations (other
than the obligations set forth in Section 7.2) of Servicer under this Agreement
and the rights and obligations of any subcustodian or subservicer pursuant to
the terms of any related custody or subservicing agreement. On or after the
receipt by Servicer of such written notice, all authority and power of Servicer
under this Agreement, whether with respect to the Notes, the Certificates or the
Receivables or otherwise, shall, without further action, pass to and be vested
in Indenture Trustee or such Successor Servicer as may be appointed under
Section 8.2; and, without limitation, Indenture Trustee and Successor Servicer
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. The predecessor Servicer shall cooperate with the
Successor

 

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Servicer, Indenture Trustee and the Trust in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the Successor Servicer for administration by it of all
cash amounts that shall at the time be held by the predecessor Servicer for
deposit, or shall thereafter be received by it with respect to a Receivable.
Servicer shall promptly transfer its electronic records relating to the
Receivables to the Successor Servicer in such electronic form as the Successor
Servicer may reasonably request and shall promptly transfer to the Successor
Servicer all other records, correspondence and documents necessary for the
continued servicing of the Receivables in the manner and at such times as the
Successor Servicer shall reasonably request. 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 8.1 shall be paid
by the predecessor Servicer upon presentation of reasonable documentation of
such costs and expenses.

 

SECTION 8.2. Appointment of Successor. (a) Upon Servicer’s receipt of notice of
termination, pursuant to Section 8.1 or Servicer’s resignation (if and to the
extent permitted 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 earlier of (i) the date 45 days from the delivery to the Trust and Indenture
Trustee of written notice of such resignation (or written confirmation of such
notice) in accordance with the terms of this Agreement and (ii) 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 Servicer’s termination or resignation hereunder, Indenture Trustee
shall appoint a Successor Servicer (which may be the Indenture Trustee), and the
Successor Servicer shall accept its appointment by a written assumption in form
acceptable to the Trust and Indenture Trustee. 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 8.2, Indenture Trustee
without further action shall automatically be appointed the Successor Servicer
and Indenture Trustee shall be entitled to the Servicing Fee. Notwithstanding
the above, Indenture Trustee shall, if it shall be unwilling or unable so to
act, 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 consumer receivables, as
the successor to Servicer under this Agreement; provided, that the appointment
of any such Successor Servicer will not result in the withdrawal, qualification
or reduction of the outstanding rating assigned to the Certificates or Notes by
any Rating Agency.

 

(b) Upon appointment, the Successor Servicer (including Indenture Trustee acting
as 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 and shall be entitled to the Servicing Fee and all the rights granted
to the predecessor Servicer by the terms and provisions of this Agreement. No
Successor Servicer shall be liable for any acts or omissions of any predecessor
Servicer.

 

(c) A transfer of servicing hereunder shall not affect the rights and duties of
the parties hereunder (including the obligations and indemnities of the
predecessor Servicer pursuant

 

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to Section 4.7, 7.1 or 7.2) other than those relating to the management,
administration, servicing, custody or collection of the Receivables and the
other rights and properties included in the Owner Trust Estate. The Successor
Servicer shall, upon its appointment pursuant to Section 8.2 and as part of its
duties and responsibilities under this Agreement, promptly take all action it
deems necessary or appropriate so that the predecessor Servicer (in whatever
capacity) is paid or reimbursed all amounts it is entitled to receive under this
Agreement on each Payment Date subsequent to the date on which it is terminated
as Servicer hereunder.

 

SECTION 8.3. Payment of Servicing Fee. If Servicer shall be replaced, the
predecessor Servicer shall be entitled to receive any accrued and unpaid
Servicing Fees and any Supplemental Servicing Fees and any Outstanding Simple
Interest Advances accrued and unpaid or received to the effective date of the
termination of the predecessor Servicer, in each case, in accordance with
Section 4.8.

 

SECTION 8.4. Notification to Noteholders and Certificateholders. Upon any
termination of, or appointment of a successor to, Servicer pursuant to this
Article VIII, the Trust shall give prompt written notice thereof to
Certificateholders and Indenture Trustee shall give prompt written notice
thereof to Noteholders.

 

SECTION 8.5. Waiver of Past Defaults. The Holders of Notes evidencing not less
than a majority of the Outstanding Amount of the Notes of the Controlling Note
Class (or the Holders of Certificates evidencing not less than a majority of the
outstanding Certificate Percentage Interests, as applicable, in the case of any
default which does not adversely affect Indenture Trustee or the Noteholders)
may, on behalf of all Noteholders and Certificateholders, waive in writing any
default by Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to any of the
Trust Accounts in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Termination Event
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto.

 

ARTICLE IX. TERMINATION.

 

SECTION 9.1. Optional Purchase of All Receivables; Termination Notice. (a) On
the last day of any Collection Period immediately preceding a Determination Date
as of which the then outstanding Pool Balance is 10% or less of the Original
Pool Balance, Servicer shall have the option to purchase the Owner Trust Estate,
other than the Trust Accounts, the Certificate Distribution Account and any
funds or investments therein; provided, that the Servicer may not exercise such
option unless the proceeds from the exercise of such option are at least
sufficient to fully repay all accrued and unpaid interest on and principal of
the Outstanding Notes through the Redemption Date. To exercise such option, the
Servicer shall deposit into the Collection Account on the Redemption Date an
amount which, after giving effect to all deposits, distributions and payments to
be made on such date in accordance with Section 5.5(c), equals the sum of (i)
the lesser of (A) the fair market value of the Owner Trust Estate and (B) the
aggregate Principal Balance of the Receivables plus (ii) accrued and unpaid
interest, if any, on the Outstanding Notes, through the Redemption Date. The
Notes and the Certificates will be redeemed concurrently therewith.

 

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(b) Following the satisfaction and discharge of the Indenture and the payment in
full of the principal of and interest on the Notes, the Certificateholders will
succeed to the rights of the Noteholders hereunder.

 

(c) Notice of any termination of the Trust shall be given by Servicer to the
Trust, Indenture Trustee and the Rating Agencies as soon as practicable after
Servicer has received notice thereof.

 

ARTICLE X. MISCELLANEOUS PROVISIONS.

 

SECTION 10.1. Amendment. (a) This Agreement may be amended by Seller, Servicer,
the Trust and Indenture Trustee, but without the consent of any of the
Noteholders or the Certificateholders:

 

(i) to cure any ambiguity or defect, to correct or supplement any provisions in
this Agreement or for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions in this Agreement or of modifying in
any manner the rights of the Noteholders or the Certificateholders; provided
that such action shall not adversely affect in any material respect the
interests of any Noteholder or Certificateholder; and

 

(ii) to add, modify or eliminate such provisions as may be necessary or
advisable in order to enable (a) the transfer to the Trust of all or any portion
of the Receivables to be recognized as a sale under generally accepted
accounting principles (“GAAP”) by Seller to the Trust, (b) the Trust to avoid
becoming a member of M&I Bank’s consolidated group under GAAP or (c) M&I Bank,
the Seller or any of their Affiliates to otherwise comply with or obtain more
favorable treatment under any law or regulation or any accounting rule or
principle; it being a condition to any such amendment that the Rating Agency
Condition shall have been satisfied;

 

provided that any amendment entered into pursuant to this Section 10.1(a) shall
not significantly change the permitted activities of the Trust.

 

(b) This Agreement may also be amended from time to time by Seller, Servicer,
the Trust and Indenture Trustee, with the consent of the Holders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes and
the consent of the Holders of Certificates evidencing not less than a majority
of the Certificate Percentage Interests for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided that no such amendment shall (i) increase or reduce
in any manner the amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions that shall be required to be made
for the benefit of the Noteholders or the Certificateholders or (ii) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Percentage Interests, the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
the Holders of all the outstanding Certificates of each class affected thereby.

 

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(c) Prior to the execution of any such amendment or consent, Servicer shall
furnish written notification of the substance of such amendment or consent to
each Rating Agency. Promptly after the execution of any such amendment or
consent, Servicer shall furnish written notification of the substance of such
amendment or consent to each Noteholder and Certificateholder.

 

(d) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section 10.1 to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.

 

(e) Prior to the execution of any amendment to this Agreement, the Trust and
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 has been delivered. The Owner
Trustee and Indenture Trustee may, but shall not, at the cost of the party
requesting such amendment be obligated to, enter into any such amendment which
affects Owner Trustee’s or Indenture Trustee’s, as applicable, own rights,
duties or immunities under this Agreement or otherwise.

 

SECTION 10.2. Protection of Title to Trust Property. (a) Servicer shall file
such financing statements and cause to be filed such continuation statements,
all in such manner and in such places as may be required by law fully to
preserve, maintain and protect the Seller’s interest as purchaser under the
Purchase Agreement and the interest of the Trust and the interests of Indenture
Trustee in the Receivables and the proceeds thereof. The Servicer shall deliver
(or cause to be delivered) to the Trust and Indenture Trustee file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing.

 

(b) Neither Seller nor Servicer shall change its name, identity or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of § 9-507 of the UCC, unless it shall have given
the Trust and Indenture Trustee at least thirty days’ prior written notice
thereof and shall have promptly filed appropriate amendments to all previously
filed financing statements or continuation statements.

 

(c) Each of Seller and Servicer shall have an obligation to give the Trust and
Indenture Trustee at least 30 days’ prior written notice of any relocation of
its principal executive office or any change in its jurisdiction of organization
if, as a result of such relocation or reorganization, the applicable provisions
of the UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement and shall
promptly file any such amendment or new financing statement. Servicer shall at
all times maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.

 

(d) Servicer shall maintain (or shall cause its subservicer to maintain)
accounts and records as to each Receivable accurately and in sufficient detail
to permit (i) the reader thereof to know at any time the status of such
Receivable, including payments and recoveries made and payments owing (and the
nature of each) and (ii) reconciliation between payments or recoveries on (or
with respect to) each Receivable and the amounts from time to time deposited in
the Collection Account in respect of such Receivable.

 

9045475 05134611       35        2005-1 Sale and Servicing Agreement

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(e) Servicer shall maintain (or shall cause its subservicer to maintain) its
computer systems relating to installment loan recordkeeping so that, from and
after the time of sale under the Purchase Agreement and under this Agreement of
the Receivables, Servicer’s and its subservicer’s master computer records
(including any backup archives) that refer to a Receivable shall indicate
clearly the interest of the Seller pursuant to the Purchase Agreement, the Trust
and Indenture Trustee in such Receivable and that such Receivable has been sold
to the Seller and by the Seller to the Trust and is owned by the Trust and has
been pledged to Indenture Trustee pursuant to the Indenture. Indication of the
Seller’s, the Trust’s and Indenture Trustee’s interest in a Receivable shall be
deleted from or modified on Servicer’s and its subservicer’s computer systems
when, and only when, the related Receivable shall have been paid in full or
purchased by Servicer.

 

(f) If at any time Servicer shall propose to sell, grant a security interest in
or otherwise transfer any interest in automotive receivables to any prospective
purchaser, lender or other transferee, Servicer shall give to such prospective
purchaser, lender or other transferee computer tapes, records or printouts
(including any restored from backup archives) that, if they shall refer in any
manner whatsoever to any Receivable, shall indicate clearly that such Receivable
has been sold to the Seller and then sold by the Seller to the Trust, and is
owned by the Trust and has been pledged to Indenture Trustee.

 

(g) Servicer, upon receipt of reasonable prior notice, shall permit the Seller,
Indenture Trustee, the Trust and their respective agents at any time during
normal business hours to inspect, audit and make copies of and abstracts from
Servicer’s and its subservicer’s records regarding any Receivable.

 

(h) Upon request at any time, the Seller, the Trust or Indenture Trustee shall
have reasonable grounds to believe that such request is necessary in connection
with the performance of its duties under this Agreement or any of the Basic
Documents, Servicer shall furnish to the Seller, the Trust or to Indenture
Trustee, within thirty Business Days, a list of all Receivables (by contract
number and name of Obligor) conveyed to the Seller under the Purchase Agreement
and then owned by the Trust and pledged to the Indenture Trustee, together with
a reconciliation of such list to the Schedule of Receivables and to each of
Servicer’s Reports furnished before such request indicating removal of
Receivables from the Trust.

 

SECTION 10.3. Notices. All demands, notices and communications upon or to
Seller, Servicer, the Trust, Indenture Trustee or the Rating Agencies under this
Agreement shall be sent by telecopy or by any other means acceptable to the
parties hereto or be in writing, personally delivered, sent by overnight courier
or mailed by certified mail, return receipt requested, and shall be deemed to
have been duly given upon receipt at the address set forth in Schedule D
attached hereto or at such address as may be designated by it by written notice
to the other parties hereto. Any notice required or permitted to be mailed to a
Noteholder or Certificateholder shall be given by first-class mail, postage
prepaid, at the address of such Person as shown in the Note Register or the
Certificate Register, as applicable. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Noteholder or Certificateholder shall receive such
notice.

 

9045475 05134611       36        2005-1 Sale and Servicing Agreement

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SECTION 10.4. Assignment. Notwithstanding anything to the contrary contained
herein, except as provided in Sections 4.1, 6.4 and 7.3 and as provided in the
provisions of this Agreement concerning the resignation of Servicer, this
Agreement may not be assigned by Seller or Servicer without the prior written
consent of the Trust, Indenture Trustee, the Noteholders evidencing not less
than 66 2/3% of the Outstanding Amount of the Notes and the Certificateholders
evidencing not less than 66 2/3% of the outstanding Certificate Percentage
Interests.

 

SECTION 10.5. Litigation and Indemnities. If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand
(collectively, a “Proceeding”) shall be brought or asserted against any Person
in respect of which indemnity may be sought pursuant to Section 7.2, such Person
(the “Indemnified Person”) shall promptly notify the person against whom such
indemnity may be sought (the “Indemnifying Person”) in writing, and the
Indemnifying Person, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in such
Proceeding and shall pay the reasonable fees and expenses of such counsel
related to such Proceeding. The Indemnifying Person shall not be liable for any
settlement of any Proceeding effected without written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. No Indemnifying
Person shall, without the prior written consent of the Indemnified Person,
effect any settlement of any pending or threatened Proceeding in respect of
which any Indemnified Person is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Person, unless such settlement
includes an unconditional release of such Indemnified Person from all liability
on claims that are the subject matter of such Proceeding. If the Indemnifying
Person shall have made any indemnity payments pursuant to this Section 10.5 and
the Person to or on behalf of whom such payments are made thereafter shall
collect any settlement or judgment amounts in connection with a Proceeding for
which an Indemnifying Person made an Indemnity payment hereunder, such Person
shall promptly repay such amounts, to the extent such amounts do not exceed
indemnity payments received, to the Indemnifying Person, without interest.

 

SECTION 10.6. Limitations on Rights of Others. The provisions of this Agreement
are solely for the benefit of Seller, JPMorgan (as agent on behalf of PREFCO and
Falcon), Northwoods, Servicer, the Trust, the Owner Trustee (individually and in
its capacity as such) and Indenture Trustee (not individually but solely in its
capacity as Indenture Trustee) and for the benefit of the Certificateholders and
the Noteholders, as third-party beneficiaries, and nothing in this Agreement,
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Owner Trust Estate or under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.

 

SECTION 10.7. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not create or render unenforceable
such provision in any other jurisdiction.

 

9045475 05134611       37        2005-1 Sale and Servicing Agreement

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SECTION 10.8. Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

 

SECTION 10.9. Headings. The headings of the various Articles and Sections herein
are for convenience of reference only and shall not define or limit any of the
terms or provisions hereof.

 

SECTION 10.10. Governing Law. THIS AGREEMENT SHALL BE 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 WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

SECTION 10.11. Assignment to Indenture Trustee. Seller hereby acknowledges and
consents to any pledge, assignment and grant of a security interest by the Trust
to Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholders of all right, title and interest of the Trust in, to and under the
Receivables and/or the assignment of any or all of the Trust’s rights and
obligations hereunder to Indenture Trustee.

 

SECTION 10.12. Third-Party Beneficiary. Deutsche Bank Trust Company Delaware is
a third-party to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.

 

SECTION 10.13. Nonpetition Covenant. Notwithstanding any prior termination of
this Agreement, the Trust, Indenture Trustee, Servicer and Seller (except as
provided in the Amended and Restated Limited Liability Company Agreement of the
Seller, dated as of November 29, 2001, as amended from time to time, the “LLC
Agreement”) shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Trust or the Seller, except as
provided in the LLC Agreement, acquiesce, petition or otherwise invoke or cause
the Trust to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Trust or the Seller,
except as provided in the LLC Agreement, under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Trust or the
Seller, except as provided in the LLC Agreement, or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the Trust
or the Seller, except as provided for in the LLC Agreement. This Section 10.2
shall survive the termination of this Agreement.

 

SECTION 10.14. Limitation of Liability. (a) It is expressly understood and
agreed by and between the parties hereto (i) that this Agreement is executed and
delivered by Deutsche Bank Trust Company Delaware, not in its individual
capacity but solely as Owner Trustee of the Trust under the Amended and Restated
Trust Agreement dated as of November 22, 2005 between M&I Dealer Auto
Securitization, LLC, Deutsche Bank Trust Company Delaware,

 

9045475 05134611       38        2005-1 Sale and Servicing Agreement

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Deutsche Bank Trust Company Americas and M&I Marshall & Ilsley Bank (the “Trust
Agreement”) in the exercise of the power and authority conferred and vested in
it as such Owner Trustee, (ii) each of the representations, undertakings and
agreements made herein by the Trust are not personal representations,
undertaking and agreements of Deutsche Bank Trust Company Delaware, but are
binding only on the Trust, (iii) nothing contained herein shall be construed as
creating any liability on Deutsche Bank Trust Company Delaware, individually or
personally, to perform any covenant of the Trust either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any person claiming by, through or under any such party,
and (iv) under no circumstances shall Deutsche Bank Trust Company Delaware be
personally liable for the payment of any indebtedness or expense of the Trust or
be liable for the reach of failure of any obligations, representation, warranty
or covenant made or undertaken by the Trust under this Agreement.

 

(b) Notwithstanding anything contained herein to the contrary, this Agreement
has been accepted by JPMorgan Chase Bank, N.A., not in its individual capacity
but solely as Indenture Trustee, and in no event shall it have any liability for
the representations, warranties, covenants, agreements or other obligations of
the Trust hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely to
the assets of the Trust. For the purposes of this Agreement, in the performance
of its duties or obligations hereunder, Indenture Trustee shall be subject to,
and entitled to the benefits of, the terms and provisions of Article VI of the
Indenture.

 

SECTION 10.15. Further Assurances. Seller and the Servicer agree 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 Trust or Indenture Trustee
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 10.16. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Trust, Indenture Trustee, the
Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges therein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.

 

9045475 05134611       39        2005-1 Sale and Servicing Agreement

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
day and year first above written.

 

M&I AUTO LOAN TRUST 2005-1

By: Deutsche Bank Trust Company Delaware, not in its individual capacity, but
solely in its capacity as Owner Trustee By:  

/s/ Louis Bodi

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

Name:   Louis Bodi Title:   Vice President

 

9045475 05134611       S-1        2005-1 Sale and Servicing Agreement

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M&I DEALER AUTO SECURITIZATION, LLC By:  

/s/ Donald H. Wilson

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

Name:   Donald H. Wilson Title:   President

 

9045475 05134611       S-2        2005-1 Sale and Servicing Agreement

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M&I MARSHALL & ILSLEY BANK, Servicer By:  

/s/ Donald H. Wilson

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

Name:   Donald H. Wilson Title:   Senior Vice President

 

9045475 05134611       S-3        2005-1 Sale and Servicing Agreement

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Acknowledged and Agreed to:

JPMorgan Chase Bank, N.A.,

not in its individual capacity

but solely as Indenture Trustee

By:  

/s/ Patty Barbarino

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Name:   Patty Barbarino Title:   Vice President

 

9045475 05134611       S-4        2005-1 Sale and Servicing Agreement

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SCHEDULE A

 

SCHEDULE OF RECEIVABLES

 

On File with the Servicer

 

9045475 05134611       Schedule A-1        2005-1 Sale and Servicing Agreement

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SCHEDULE B

 

Location of Receivables Files

 

The Receivables sold by M&I Northwoods III LLC, Preferred Receivables Funding
Corporation and Falcon Asset Securitization Corporation to Seller and sold by
Seller to the Trust are located at the offices of M&I Marshall & Ilsley Bank
listed below:

 

401 Executive Drive

Milwaukee, Wisconsin 53008

 

9045475 05134611       Schedule B-1        2005-1 Sale and Servicing Agreement

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SCHEDULE C

 

PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS

 

In addition to the representations, warranties and covenants contained in the
Sale and Servicing Agreement, the Servicer hereby represents, warrants, and
covenants to the Seller and the Trust as follows on the Closing Date and on each
Payment Date thereafter:

 

General

 

1. The Purchase Agreement creates a valid and continuing security interest (as
defined in UCC Section 9 102) in the Receivables in favor of the Seller, which
security interest is prior to all other Liens, and is enforceable as such as
against creditors of and purchasers from Northwoods and JPMorgan (as agent on
behalf of PREFCO and Falcon). The Sale and Servicing Agreement creates a valid
and continuing security interest (as defined in UCC Section 9 102) in the
Receivables in favor of the Trust, which security interest is prior to all other
Liens, and is enforceable as such as against creditors of and purchasers from
the Seller.

 

2. The Receivables constitute “tangible chattel paper”, “accounts,”
“instruments” or “general intangibles” within the meaning of UCC Section 9 102.

 

3. Each Receivable is secured by a first priority validly perfected security
interest in the related Financed Vehicle in favor of the applicable Originator,
as secured party, or all necessary actions with respect to such Receivable have
been taken or will be taken to perfect a first priority security interest in the
related Financed Vehicle in favor of the applicable Originator, as secured
party.

 

Creation

 

4. Immediately prior to the sale, transfer, assignment and conveyance of a
Receivable by the Transferors to the Seller, the Transferors owned and had good
and marketable title to such Receivable free and clear of any Lien, claim or
encumbrance of any Person, and immediately after the sale, transfer, assignment
and conveyance of such Receivable to the Seller, the Seller will have good and
marketable title to such Receivable free and clear of any Lien, claim or
encumbrance of any Person, excepting only Liens for taxes, assessments or
similar governmental charges or levies incurred in the ordinary course of
business that are not yet due and payable or as to which any applicable grace
period shall not have expired, or that are being contested in good faith by
proper proceedings and for which adequate reserves have been established, but
only so long as foreclosure with respect to such a Lien is not imminent and the
use and value of the property to which the Lien attaches is not impaired during
the pendency of such proceeding.

 

5. Immediately prior to the sale, transfer, assignment and conveyance of a
Receivable by the Seller to the Trust, the Seller owned and had good and
marketable title to such Receivable free and clear of any Lien, claim or
encumbrance of any Person, and immediately

 

9045475 05134611       Schedule C-1        2005-1 Sale and Servicing Agreement

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after the sale, transfer, assignment and conveyance of such Receivable to the
Trust, the Trust will have good and marketable title to such Receivable free and
clear of any Lien, claim or encumbrance of any Person, excepting only Liens for
taxes, assessments or similar governmental charges or levies incurred in the
ordinary course of business that are not yet due and payable or as to which any
applicable grace period shall not have expired, or that are being contested in
good faith by proper proceedings and for which adequate reserves have been
established, but only so long as foreclosure with respect to such a Lien is not
imminent and the use and value of the property to which the Lien attaches is not
impaired during the pendency of such proceeding.

 

6. The related Originator has received all consents and approvals to the sale of
the Receivables to the Seller and to the Trust required by the terms of the
Receivables that constitute instruments.

 

Perfection

 

7. The Servicer has caused or will have caused, within ten days after the
effective date of the Indenture, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the sale of the Receivables from the
Transferors to the Seller, the transfer and sale of the Receivables from the
Seller to the Trust, and the security interest in the Receivables granted to
Indenture Trustee under the Indenture; and the Servicer, in its capacity as
custodian, has in its possession the original copies of such instruments or
tangible chattel paper that constitute or evidence the Receivables, and all
financing statements referred to in this paragraph contain a statement that: “A
purchase of or security interest in any collateral described in this financing
statement will violate the rights of the Secured Party”.

 

8. With respect to Receivables that constitute instruments or tangible chattel
paper, such instruments or tangible chattel paper are in the possession of the
Custodian and Indenture Trustee has received a written acknowledgment from the
Custodian that the Custodian is holding such instruments or tangible chattel
paper solely on behalf and for the benefit of Indenture Trustee.

 

Priority

 

9. The Servicer has not authorized the filing of, and is aware of, any financing
statements against either JPMorgan (as agent on behalf of PREFCO and Falcon),
Northwoods, the Seller or Servicer that include a description of collateral
covering the Receivables, the Trust Estate and proceeds related thereto other
than any financing statement (i) relating to the sale of Receivables by the
Transferors to the Seller under the Sale and Servicing Agreement, (ii) relating
to the sale of Receivables by the Seller to the Trust under the Sale and
Servicing Agreement, (iii) relating to the security interest granted to
Indenture Trustee under the Indenture, or (iv) that has been terminated.

 

10. The Servicer is not aware of any material judgment, ERISA or tax lien
filings against either JPMorgan (as agent on behalf of PREFCO and Falcon),
Northwoods, the Seller or the Servicer.

 

9045475 05134611       Schedule C-2        2005-1 Sale and Servicing Agreement

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11. None of the instruments, tangible chattel paper that constitute or evidence
the Receivables has any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Seller, the
Trust or the Indenture Trustee.

 

Survival of Perfection Representations

 

12. Notwithstanding any other provision of the Purchase Agreement, the Sale and
Servicing Agreement, the Indenture or any other Basic Document, the Perfection
Representations contained in this Schedule C shall be continuing, and remain in
full force and effect (notwithstanding any replacement of Servicer or
termination of Servicer’s rights to act as such), until such time as all
obligations under the Purchase Agreement, the Sale and Servicing Agreement and
the Indenture have been finally and fully paid and performed.

 

No Waiver

 

13. The parties hereto: (i) shall not, without obtaining a confirmation of the
then current rating of the Notes, waive any of the Perfection Representations;
(ii) shall provide the Ratings Agencies with prompt written notice of any breach
of the Perfection Representations; and (iii) shall not, without obtaining a
confirmation of the then current rating of the Notes (as determined after any
adjustment or withdrawal of the ratings following notice of such breach), waive
a breach of any of the Perfection Representations.

 

9045475 05134611       Schedule C-3        2005-1 Sale and Servicing Agreement

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SCHEDULE D

 

NOTICE ADDRESSES

 

In the case of JPMorgan Chase Bank, N.A. (as agent on behalf of PREFCO and
Falcon):

 

1 Bank One Plaza

Chicago, Illinois 60670

Attention: George Wilkins

Telephone: (312) 732-5723

Fax: (312) 732-3600

e-mail: george.s.wilkins@jpmorgan.com

 

In the case of M&I Northwoods III LLC:

 

770 North Water Street NWS

Milwaukee, Wisconsin 53202

Attention: Douglas D. Howe

Telephone: (414) 765-8044

Fax: (414) 765-8097

e-mail: doug.howe@micorp.com

 

In the case of Seller, to M&I Dealer Auto Securitization, LLC:

 

770 North Water Street

Milwaukee, Wisconsin 53202

Attention: Douglas D. Howe

Telephone: (414) 765-8044

Fax: (414) 765-8097

e-mail: doug.howe@micorp.com

 

In the case of Servicer, to M&I Marshall & Ilsley Bank:

 

770 North Water Street

Milwaukee NW5, Wisconsin 53202

Attention: Douglas D. Howe

Telephone: (414) 765-8044

Fax: (414) 765-8097

e-mail: doug.howe@micorp.com

 

In the case of the Trust, at the Corporate Trust Office:

 

Deutsche Bank Trust Company Delaware

1011 Centre Road, Suite 200

Wilmington, Delaware 19805

Attention: Elizabeth Ferry

 

9045475 05134611       Schedule D-1        2005-1 Sale and Servicing Agreement

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In the case of Indenture Trustee, at the Corporate Trust Office:

 

JPMorgan Chase Tower

600 Travis, 9th Floor

Houston, TX 77002

Attention: Worldwide Securities Services/Structured Finance

    Services – M&I Auto Loan Trust Series 2005-1 Notes

Telephone: (713) 216-5139

Fax: (713) 216-4480

e-mail: patty.barbarino@chase.com

 

In the case of Moody’s, to Moody’s Investors Service, Inc.:

 

99 Church Street

New York, New York 10007

Attention: Asset Backed Securities Group

Telephone:

Fax:

e-mail:

 

In the case of Standard & Poor’s, to Standard & Poor’s Ratings Services

a division of The McGraw-Hill Companies, Inc.,:

 

55 Water Street

New York, New York 10041-0003

Attention: Asset Backed Surveillance Department

Telephone:

Fax:

e-mail:

 

In the case of Dominion Bond Rating Service:

 

One Exchange Plaza

55 Broadway, 25th Floor

New York, NY 10006

 

9045475 05134611       Schedule D-2        2005-1 Sale and Servicing Agreement

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EXHIBIT A

 

Form of Servicer’s Report

 

9045475 05134611       Exhibit A-1        2005-1 Sale and Servicing Agreement

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APPENDIX X

 

DEFINITIONS

 

“Accrued Class A Note Interest” shall mean, with respect to any Payment Date,
the sum of the Class A Noteholders’ Monthly Accrued Interest for such Payment
Date and the Class A Noteholders’ Interest Carryover Shortfall for such Payment
Date.

 

“Accrued Class B Note Interest” shall mean, with respect to any Payment Date,
the sum of the Class B Noteholders’ Monthly Accrued Interest for such Payment
Date and the Class B Noteholders’ Interest Carryover Shortfall for such Payment
Date.

 

“Act” is defined in Section 11.3(a) of the Indenture.

 

“Administration Agreement” means the Administration Agreement among M&I
Marshall & Ilsley Bank, as Administrator, M&I Auto Loan Trust 2005-1, as Trust,
and JPMorgan Chase Bank, N.A., as Indenture Trustee, dated November 22, 2005, as
the same may be amended and supplemented from time to time.

 

“Administration Fee” is defined in Section 4 of the Administration Agreement.

 

“Administrator” means M&I Marshall & Ilsley Bank, in its capacity as
administrator under the Administration Agreement, and each successor
Administrator.

 

“Affiliate” means, with respect to any specified Person, any other Person
controlling, controlled by or under common control with such specified Person.
For the purposes of this definition, “control” when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing. A Person shall not be
deemed to be an Affiliate of any specified Person solely because such other
Person has the contractual right or obligation to manage such specified Person
or act as servicer with respect to the financial assets of such specified Person
unless such other Person controls the specified Person through equity ownership
or otherwise.

 

“Authenticating Agent” is defined in Section 2.13 of the Indenture.

 

“Authorized Officer” means, with respect to the Trust and Servicer, any officer
of Owner Trustee or Servicer, as applicable, who is authorized to act for Owner
Trustee or Servicer, as applicable, in matters relating to the Trust or Servicer
and who is identified on the list of Authorized Officers delivered by each of
the Trust and Servicer to Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter).

 

“Available Collections” shall mean, for any Payment Date, the sum of the
following amounts with respect to the Collection Period preceding such Payment
Date: (i) all funds, including Liquidation Proceeds, collected with respect to
the Receivables other than Defaulted Receivables; (ii) all Recoveries in respect
of Defaulted Receivables (iii) all Simple Interest Advances with respect to the
Receivables, (iv) the Purchase Amount received with respect to

 

9045475 05134611        2005-1 Definitions

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each Receivable that became a Purchased Receivable during such Collection
Period; and (v) partial prepayments of any refunded item included in the
principal balance of a Receivable, such as extended warranty protection plan
costs, or physical damage, credit life, disability insurance premiums; provided,
however, that in calculating the Available Collections the following will be
excluded: (1) all payments and proceeds (including Liquidation Proceeds) of any
Receivables the Purchase Amount of which has been included in the Available
Funds in a prior Collection Period and (2) amounts consisting of the
Supplemental Servicing Fee.

 

“Available Funds” shall mean, for any Payment Date, the sum of (i) the Available
Collections for such Payment Date and (ii) the Reserve Account Excess Amount for
such Payment Date.

 

“Bank Regulatory Authorities” means the Federal Reserve Board, the Federal
Deposit Insurance Corporation, Office of the Comptroller of Currency and the
Wisconsin Department of Financial Institutions.

 

“Bankruptcy Remote Party” means each PREFCO, Falcon, the Seller, the Trust, any
other trust created by the Seller or any limited liability company or
corporation wholly-owned by the Seller.

 

“Basic Documents” means the Purchase Agreement, the Indenture, the Note
Depository Agreement, the Sale and Servicing Agreement, the Trust Agreement, the
Administration Agreement, the Notes, the Certificates and other documents and
certificates delivered in connection therewith.

 

“Benefit Plan” is defined in Section 3.12 of the Trust Agreement.

 

“Book-Entry Note” means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10 of the Indenture.

 

“Business Day” means a day that is not a Saturday or a Sunday and that in the
States of New York, Wisconsin and the State in which the Corporate Trust Office
is located is neither a legal holiday nor a day on which banking institutions
are authorized by law, regulation or executive order to be closed.

 

“Certificate” means a certificate evidencing the beneficial interest of a
Certificateholder in the Trust, substantially in the form of Exhibit A to the
Trust Agreement.

 

“Certificate Account Property” means the Certificate Distribution Account, all
amounts and investments held from time to time therein (whether in the form of
deposit account, Physical Property, book entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.

 

“Certificate Distribution Account” is defined in Section 5.1 of the Trust
Agreement.

 

9045475 05134611       Appendix X-2        2005-1 Definitions

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

“Certificate Paying Agent” shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.9 of the Trust Agreement and shall initially be
Deutsche Bank Trust Company Americas.

 

“Certificate Percentage Interest” shall mean with respect to any Certificate,
the percentage interest of ownership in the Trust represented thereby as set
forth on the face thereof.

 

“Certificate Register” and “Certificate Registrar” means the register mentioned
and the registrar appointed pursuant to Section 3.4 of the Trust Agreement.

 

“Certificateholder” means the Person in whose name a Certificate is registered
on the Certificate Register.

 

“Class” shall mean a class of Notes, which may be the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes or the Class B Note.

 

“Class A Notes” shall mean, collectively, the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes.

 

“Class A Noteholders’ Interest Carryover Shortfall” shall mean, with respect to
any Payment Date, the excess of the Class A Noteholders’ Monthly Accrued
Interest for the preceding Payment Date and any outstanding Class A Noteholders’
Interest Carryover Shortfall on such preceding Payment Date, over the amount in
respect of interest that is actually paid to Noteholders of Class A Notes on
such preceding Payment Date, plus interest on the amount of interest due but not
paid to Noteholders of Class A Notes on the preceding Payment Date, to the
extent permitted by law, at the respective Interest Rates borne by such Class A
Notes for the related Interest Period.

 

“Class A Noteholders’ Monthly Accrued Interest” shall mean, with respect to any
Payment Date, the aggregate interest accrued for the related Interest Period on
the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes at the respective Interest Rate for such Class and on the outstanding
principal amount of the Notes of each such Class on the immediately preceding
Payment Date or the Closing Date, as the case may be, after giving effect to all
payments of principal to the Noteholders of the Notes of such Class on or prior
to such preceding Payment Date.

 

“Class A-1 Final Scheduled Payment Date” shall mean November 20, 2006.

 

“Class A-1 Interest Rate” means 4.40578% per annum. Interest with respect to the
Class A-1 Notes shall be computed on the basis of actual days elapsed and a
360-day year for all purposes of the Basic Documents.

 

“Class A-1 Noteholder” shall mean the Person in whose name a Class A-1 Note is
registered on the Note Register.

 

“Class A-1 Notes” means the Class A-1 4.40578% Asset Backed Notes, substantially
in the form of Exhibit A-1 to the Indenture.

 

9045475 05134611   Appendix X-3    2005-1 Definitions

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“Class A-2 Final Scheduled Payment Date” shall mean the June 20, 2008 Payment
Date.

 

“Class A-2 Interest Rate” means 4.75% per annum. Interest with respect to the
Class A-2 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.

 

“Class A-2 Noteholder” shall mean the Person in whose name a Class A-2 Note is
registered on the Note Register.

 

“Class A-2 Notes” means the Class A-2 4.75% Asset Backed Notes, substantially in
the form of Exhibit A-2 to the Indenture.

 

“Class A-3 Final Scheduled Payment Date” shall mean the September 21, 2009
Payment Date.

 

“Class A-3 Interest Rate” means 4.83% per annum. Interest with respect to the
Class A-3 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.

 

“Class A-3 Noteholder” shall mean the Person in whose name a Class A-3 Note is
registered on the Note Register.

 

“Class A-3 Notes” means the Class A-3 4.83% Asset Backed Notes, substantially in
the form of Exhibit A-3 to the Indenture.

 

“Class A-4 Final Scheduled Payment Date” shall mean the March 21, 2011 Payment
Date.

 

“Class A-4 Interest Rate” means 4.86% per annum. Interest with respect to the
Class A-4 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.

 

“Class A-4 Noteholder” shall mean the Person in whose name a Class A-4 Note is
registered on the Note Register.

 

“Class A-4 Notes” means the Class A-4 4.86% Asset Backed Notes, substantially in
the form of Exhibit A-4 to the Indenture.

 

“Class B Final Scheduled Payment Date” shall mean the July 20, 2012 Payment
Date.

 

“Class B Noteholder” shall mean the Person in whose name a Class B Note is
registered on the Note Register.

 

“Class B Interest Rate” means 5.02% per annum. Interest with respect to the
Class B Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.

 

9045475 05134611   Appendix X-4    2005-1 Definitions

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“Class B Noteholders’ Interest Carryover Shortfall” shall mean, with respect to
any Payment Date, the excess of the Class B Noteholders’ Monthly Accrued
Interest for the preceding Payment Date and any outstanding Class B Noteholders’
Interest Carryover Shortfall on such preceding Payment Date, over the amount in
respect of interest that is actually paid to Noteholders of Class B Notes on
such preceding Payment Date, plus interest on the amount of interest due but not
paid to Noteholders of Class B Notes on the preceding Payment Date, to the
extent permitted by law, at the Class B Rate for the related Interest Period.

 

“Class B Noteholders’ Monthly Accrued Interest” shall mean, with respect to any
Payment Date, the aggregate interest accrued for the related Interest Period on
the Class B Notes at the Class B Interest Rate on the outstanding principal
amount of the Class B Notes on the immediately preceding Payment Date or the
Closing Date, as the case may be, after giving effect to all payments of
principal to the Noteholders of the Class B Notes on or prior to such preceding
Payment Date.

 

“Class B Noteholder” shall mean the Person in whose name a Class B Note is
registered on the Note Register.

 

“Class B Notes” means the Class B 5.02% Asset Backed Notes, substantially in the
form of Exhibit B to the Indenture.

 

“Clearing Agency” means an organization registered as a “clearing agency”
pursuant to Section 17A of the Exchange Act.

 

“Clearing Agency Participant” means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.

 

“Closing Date” means November 22, 2005.

 

“Code” means the Internal Revenue Code of 1986 and Treasury Regulations
promulgated thereunder.

 

“Collateral” is defined in the Granting Clause of the Indenture.

 

“Collection Account” means the account designated as such, established and
maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.

 

“Collection Period” means, (a) in the case of the initial Collection Period, the
period from but not including the Cutoff Date to and including November 30, 2005
and (b) thereafter, each calendar month during the term of the Sale and
Servicing Agreement. With respect to any Determination Date, Deposit Date or
Payment Date, the “related Collection Period” means the Collection Period
preceding the month in which such Determination Date, Deposit Date or Payment
Date occurs.

 

“Collections” means all collections on the Receivables and any proceeds from
Insurance Policies, but not including any payments made with respect to the
Receivables by the Servicer or by its Affiliates.

 

9045475 05134611   Appendix X-5    2005-1 Definitions

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“Commission” means the Securities and Exchange Commission.

 

“Contract Rate” means, with respect to a Receivable, the rate per annum of
interest charged on the outstanding principal balance of such Receivable.

 

“Controlling Note Class” shall mean, with respect to any Notes Outstanding, the
Class A Notes (voting together as a single class) as long as any Class A Notes
are Outstanding and thereafter the Class B Notes as long as any Class B Notes
are Outstanding (excluding Notes held by the Servicer, the Seller or their
Affiliates).

 

“Corporate Trust Office” means:

 

(a) as used in the Indenture, or otherwise with respect to Indenture Trustee,
the principal office of Indenture Trustee at which at any particular time its
corporate trust business shall be administered which office at date of the
execution of the Indenture is located at JPMorgan Chase Tower, 600 Travis, 9th
Floor, Houston, TX 77002, Attention: Worldwide Securities Services/Structured
Finance Services – M&I Auto Loan Trust Series 2005-1 Notes or at such other
address as Indenture Trustee may designate from time to time by notice to the
Noteholders, Servicer and Trust, or the principal corporate trust office of any
successor Indenture Trustee (the address of which the successor Indenture
Trustee will notify the Noteholders and the Trust); and

 

(b) as used in the Trust Agreement, or otherwise with respect to the Trust, the
principal corporate trust office of Owner Trustee located at 1011 Centre Road,
Suite 200, Wilmington, Delaware 19805, Attention: Elizabeth Ferry or at such
other address as Owner Trustee may designate by notice to the Certificateholders
and Seller, or the principal corporate trust office of any successor Owner
Trustee (the address of which the successor owner trustee will notify the
Certificateholders and Seller).

 

“Custodian” means Servicer in its capacity as agent of the Trust, as custodian
of the Receivable Files.

 

“Cutoff Date” means, with respect to the Receivables transferred on the Closing
Date, the close of business on November 4, 2005.

 

“Cutoff Date Principal Balance” means, with respect to any Receivable, the
Initial Principal Balance of such Receivable minus the sum of the portion of all
payments received under such Receivable from or on behalf of the related Obligor
on or prior to the Cutoff Date and allocable to principal in accordance with the
terms of such Receivable.

 

“Dealer” means, with respect to any Receivable, the seller of the related
Financed Vehicle.

 

“Dealer Agreement” means an agreement between Dealer Finance and a Dealer
pursuant to which Dealer Finance acquires Motor Vehicle Loans from the Dealer or
gives such Dealer the right to induce persons to apply to Dealer Finance for
loans in connection with the retail sale of Motor Vehicles by such Dealer.

 

9045475 05134611   Appendix X-6    2005-1 Definitions

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

“Dealer Finance” means M&I Dealer Finance, Inc., a Wisconsin corporation.

 

“Dealer Recourse” means, with respect to any Dealer, any rights and remedies
against such Dealer under the related Dealer Agreement (other than with respect
to any breach of representation or warranty thereunder) with respect to credit
losses on a Receivable secured by a Financed Vehicle sold by such Dealer.

 

“Default” means any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.

 

“Defaulted Receivable” means, with respect to any Collection Period, a
Receivable (other than a Purchased Receivable) which Servicer has determined to
charge off during such Collection Period in accordance with its customary
servicing practices (and, in no event later than 150 days after a Receivable
shall have become delinquent).

 

“Definitive Notes” is defined in Section 2.1 of the Indenture.

 

“Delinquency Ratio” means, for any Collection Period, the ratio, expressed as a
percentage, of (a) the aggregate Principal Balance of all Receivables that are
60 or more days delinquent as of the last date of such Collection Period to
(b) the aggregate Principal Balance of the Receivables as of the last day of
such Collection Period.

 

“Delivery” when used with respect to Trust Account Property means:

 

(a) with respect to (I) bankers’ acceptances, commercial paper, and negotiable
certificates of deposit and other obligations that constitute “instruments” as
defined in Section 9-102(47) of the UCC and are susceptible of physical
delivery, transfer of actual possession thereof to the Indenture Trustee or its
nominee or custodian by physical delivery to the Indenture Trustee or its
nominee or custodian endorsed to, or registered in the name of, the Indenture
Trustee or its nominee or custodian or endorsed in blank, and (II) with respect
to a “certificated security” (as defined in Section 8-102(a)(4) of the UCC)
transfer of actual possession thereof (i) by physical delivery of such
certificated security to the Indenture Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Indenture Trustee or its nominee
or custodian or endorsed in blank, or to another person, other than a
“securities intermediary” (as defined in Section 8-102(a)(14) of the UCC), who
acquires possession of the certificated security on behalf of the Indenture
Trustee or its nominee or custodian or, having previously acquired possession of
the certificate, acknowledges that it holds for the Indenture Trustee or its
nominee or custodian or (ii) by delivery thereof to a “securities intermediary”,
endorsed to or registered in the name of the Indenture Trustee or its nominee or
custodian, or endorsed in blank, and the making by such “securities
intermediary” of entries on its books and records identifying such certificated
securities as belonging to the Indenture Trustee or its nominee or custodian and
the sending by such “securities intermediary” of a confirmation of the purchase
of such certificated security by the Indenture Trustee or its nominee or
custodian (all of the foregoing, “Physical Property”), and, in any event, any
such Physical Property in registered form shall be in the name of the Indenture
Trustee or its nominee or custodian; and such additional or alternative
procedures as may hereafter become

 

9045475 05134611   Appendix X-7    2005-1 Definitions

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

appropriate to effect the complete transfer of ownership of any such Trust
Account Property to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the interpretation
thereof;

 

(b) with respect to any securities issued by the U.S. Treasury, the Federal Home
Loan Mortgage Corporation, the Federal National Mortgage Association or the
other government agencies, instrumentalities and establishments of the United
States identified in Appendix A to Federal Reserve Bank Operating Circular No. 7
as in effect from time to time that is a “book-entry security” (as such term is
defined in Federal Reserve Bank Operating Circular No. 7) held in a securities
account and eligible for transfer through the Fedwire® Securities Service
operated by the Federal Reserve System pursuant to Federal book-entry
regulations, the following procedures, all in accordance with applicable law,
including applicable Federal regulations and Articles 8 and 9 of the UCC:
book-entry registration of such Trust Account Property to an appropriate
securities account maintained with a Federal Reserve Bank by a “participant” (as
such term is defined in Federal Reserve Bank Operating Circular No. 7) that is a
“depository institution” (as defined in Section 19(B)(1)(A) of the Federal
Reserve Act) pursuant to applicable Federal regulations, and issuance by such
depositary institution of a deposit advice or other written confirmation of such
book-entry registration to the Indenture Trustee or its nominee or custodian of
the purchase by the Indenture Trustee or its nominee or custodian of such
book-entry securities; the making by such depositary institution of entries in
its books and records identifying such book entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations or a security
entitlement thereto as belonging to the Indenture Trustee or its nominee or
custodian and indicating that such depositary institution holds such Trust
Account Property solely as agent for the Indenture Trustee or its nominee or
custodian; and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof; and

 

(c) with respect to any item of Trust Account Property that is an uncertificated
security (as defined in Section 8-102(a)(18) of the UCC) and that is not
governed by clause (b) above, (i) registration on the books and records of the
issuer thereof in the name of the Indenture Trustee or its nominee or custodian,
or (ii) registration on the books and records of the issuer thereof in the name
of another person, other than a securities intermediary, who acknowledges that
it holds such uncertificated security for the benefit of the Indenture Trustee
or its nominee or custodian.

 

“Deposit Date” means, with respect to any Collection Period, two Business Days
preceding the related Payment Date.

 

“Determination Date” means with respect to any Collection Period, the Business
Day preceding the related Payment Date by two Business Days.

 

“Dollar” and the sign “$” mean lawful money of the United States.

 

9045475 05134611   Appendix X-8    2005-1 Definitions

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“Dominion” means Dominion Bond Rating Service Limited, or its successor.

 

“Eligible Deposit Account” means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution acting in its fiduciary capacity
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited
in such account, so long as the long-term unsecured debt of such depository
institution shall have a credit rating from each Rating Agency in one of its
generic rating categories which signifies investment grade. Any such trust
account may be maintained with the Owner Trustee, Indenture Trustee or any of
their respective Affiliates.

 

“Eligible Institution” means a depository institution (which may be Servicer,
Owner Trustee or Indenture Trustee, or any of their respective Affiliates)
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), (a) which has (i) either a long-term senior unsecured debt rating of AA-
or a short-term senior unsecured debt or certificate of deposit rating of A-1 or
better by Standard & Poor’s and (ii)(A) a short-term senior unsecured debt
rating of A-l or better by Standard & Poor’s and (B) a short-term senior
unsecured debt rating of P-1 or better by Moody’s, or any other long-term,
short-term or certificate of deposit rating acceptable to the Rating Agencies
and (b) whose deposits are insured by the Federal Deposit Insurance Corporation.
If so qualified, Servicer, any Affiliate of Servicer, Owner Trustee or Indenture
Trustee may be considered an Eligible Institution.

 

“Eligible Investments” shall mean any one or more of the following types of
investments:

 

(a) direct obligations of, and obligations fully guaranteed as to timely payment
by, the United States of America;

 

(b) demand deposits, time deposits or certificates of deposit of any depository
institution (including any Affiliate of Seller, Servicer, Indenture Trustee or
Owner Trustee) or trust company incorporated under the laws of the United States
of America or any state thereof or the District of Columbia (or any domestic
branch of a foreign bank) and subject to supervision and examination by Federal
or state banking or depository institution authorities (including depository
receipts issued by any such institution or trust company as custodian with
respect to any obligation referred to in clause (a) above or a portion of such
obligation for the benefit of the holders of such depository receipts); provided
that at the time of the investment or contractual commitment to invest therein
(which shall be deemed to be made again each time funds are reinvested following
each Payment Date), the commercial paper or other short-term senior unsecured
debt obligations (other than such obligations the rating of which is based on
the credit of a Person other than such depository institution or trust company)
of such depository institution or trust company shall have a credit rating from
Standard & Poor’s of A-1 and from Moody’s of P-1;

 

9045475 05134611   Appendix X-9    2005-1 Definitions

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(c) commercial paper (including commercial paper of any Seller, Servicer and the
Indenture Trustee, Owner Trustee or any of their Affiliates) having, at the time
of the investment or contractual commitment to invest therein, a rating from
Standard & Poor’s of A-1 and from Moody’s of P-1;

 

(d) investments in money market funds (including funds for which Indenture
Trustee or Owner Trustee or any of their respective Affiliates or any of
Seller’s Affiliates is investment manager or advisor) having a rating from
Standard & Poor’s of AAA-m or AAAm-G and from Moody’s of Aaa;

 

(e) bankers’ acceptances issued by any depository institution or trust company
referred to in clause (b) above;

 

(f) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
referred to in clause (b) above; and

 

(g) any other investment with respect to which each Rating Agency has provided
written notice that such investment would not cause such Rating Agency to
downgrade, qualify or withdraw its then current rating of any class of Notes.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

 

“Event of Default” is defined in Section 5.1 of the Indenture.

 

“Excess Interest” means, for any Payment Date, (a) the sum of funds available to
pay interest on any Payment Date over (b) the amount necessary to pay Servicing
Fees and to make interest payments on the Notes.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Executive Officer” means, with respect to any corporation, the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, Chief Accounting
Officer, President, Executive Vice President, any Vice President, the Secretary
or the Treasurer of such corporation; and with respect to any limited liability
company or partnership, a similar official with respect to any direct or
indirect member or general partner thereof.

 

“Falcon” means Falcon Asset Securitization, LLC, a Delaware limited liability
company.

 

“Final Scheduled Payment Date,” for each Class of Notes, means the respective
Class A-1 Final Scheduled Payment Date, Class A-2 Final Scheduled Payment Date,
Class A-3 Final Scheduled Payment Date, Class A-4 Final Scheduled Payment Date
and Class B Final Scheduled Payment Date or, if such date is not a Business Day,
the next succeeding Business Day.

 

9045475 05134611   Appendix X-10    2005-1 Definitions

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“Financed Vehicle” means a new or used automobile or light duty truck, together
with all accessions thereto, securing an Obligor’s indebtedness under the
respective Receivable.

 

“First Priority Principal Distribution Amount” means, with respect to any
Payment Date, an amount not less than zero, equal to (i) the Outstanding Amount
of the Class A Notes as of the preceding Payment Date (after giving effect to
any principal payments made on the Class A Notes on such preceding Payment
Date), minus (ii) the Pool Balance at the end of the Collection Period preceding
such Payment Date; provided, however, that the First Priority Principal
Distribution Amount on and after the Final Scheduled Payment Date of any Class
of Class A Notes shall not be less than the amount that is necessary to reduce
the Outstanding Amount of that Class of Class A Notes to zero.

 

“GAAP” is defined in Section 10.1 of the Sale and Servicing Agreement.

 

“Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, grant a Lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto. Other forms of the verb “to Grant”
shall have correlative meanings.

 

“Holder” means, as the context may require, a Certificateholder or a Noteholder
or both.

 

“Indemnified Parties” is defined in Section 8.2 of the Trust Agreement.

 

“Indenture” means the Indenture dated as of November 22, 2005, among M&I Bank,
the Trust and Indenture Trustee, as the same may be amended and supplemented
from time to time.

 

“Indenture Trustee” means JPMorgan Chase Bank, N.A., a national banking
association, not in its individual capacity but as indenture trustee under the
Indenture, or any successor trustee under the Indenture.

 

“Independent” means, when used with respect to any specified Person, that the
person (a) is in fact independent of the Trust, any other obligor upon the
Notes, Sellers and any Affiliate of any of the foregoing persons, (b) does not
have any direct financial interest or any material indirect financial interest
(other than less than 5% of the outstanding amount of any publicly traded
security) in the Trust, any such other obligor, Servicer or any Affiliate of any
of the foregoing Persons and (c) is not connected with the Trust, any such other
obligor, Servicer or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.

 

“Independent Certificate” means a certificate or opinion to be delivered to
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable

 

9045475 05134611   Appendix X-11    2005-1 Definitions

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requirements of Section 11.1 of the Indenture, made by an Independent appraiser
or other expert appointed by an Issuer Order and approved by the Administrator
in the exercise of reasonable care, and such opinion or certificate shall state
that the signer has read the definition of “Independent” in the Indenture and
that the signer is Independent within the meaning thereof.

 

“Initial Principal Balance” means, in respect of a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and related costs, including accessories, service and warranty contracts,
insurance premiums, other items customarily financed as part of retail motor
vehicle loans and/or retail installment sales contracts and other fees charged
by the applicable Originator or the applicable Dealer and included in the amount
to be financed, the total of which is shown as the initial principal balance in
the note and security agreement or retail installment sale contract evidencing
and securing such Receivable.

 

“Insolvency Event” means, for a specified Person, (a) the filing of a decree or
order for relief by a court having jurisdiction in the premises in respect of
such Person or any substantial part of its property in an involuntary case under
any applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver (including any receiver
appointed under the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended), liquidator, assignee, custodian, trustee, sequestrator or
similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person’s affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.

 

“Insurance Policies” means, all credit life and disability insurance policies
maintained by the Obligors and all Physical Damage Insurance Policies.

 

“Interest Period” shall mean, with respect to any Payment Date (i) with respect
to the Class A-1 Notes from and including the Closing Date (in the case of the
first Payment Date) or from and including the most recent Payment Date on which
interest has been paid to but excluding the following Payment Date and (ii) with
respect to each Class of Notes other than the Class A-1 Notes from and including
the Closing Date (in the case of the first Payment Date) or from and including
the twentieth day of the calendar month preceding each Payment Date to but
excluding the twentieth day of the following calendar month.

 

“Interest Rate” means, with respect to the (a) Class A-1 Notes, the Class A-1
Interest Rate, (b) Class A-2 Notes, the Class A-2 Interest Rate, (c) Class A-3
Notes, the Class A-3 Interest Rate, (d) Class A-4 Notes, the Class A-4 Interest
Rate and (e) Class B Notes, the Class B Interest Rate.

 

“IRS” shall mean the Internal Revenue Service.

 

9045475 05134611   Appendix X-12    2005-1 Definitions

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“Issuer Order” and “Issuer Request” means a written order or request signed in
the name of the Trust by any one of the Authorized Officers of the Owner Trustee
and delivered to Indenture Trustee.

 

“JPMorgan” means JPMorgan Chase Bank, N.A., a national banking association (as
agent on behalf of PREFCO and Falcon), as a transferor under the Purchase
Agreement.

 

“Lien” means a security interest, lien, charge, pledge, preference,
participation interest or encumbrance of any kind, other than liens for taxes
not yet due and payable, mechanics’ or materialmen’s liens and other liens for
work, labor or materials, and any other liens that may attach by operation of
law.

 

“Liquidation Proceeds” means, with respect to any Receivable that is not a
Defaulted Receivable, (a) insurance proceeds received by Servicer with respect
to the Insurance Policies, (b) amounts received by Servicer in connection with
such Receivable pursuant to the exercise of rights under that Receivable and
(c) the monies collected by Servicer (from whatever source, including proceeds
of a sale of a Financed Vehicle or as a result of any Dealer Recourse) on such
Receivable net of any expenses incurred by Servicer in connection therewith and
any payments required by law to be remitted to the Obligor.

 

“M&I Bank” means M&I Marshall & Ilsley Bank, a banking corporation organized
under the laws of the State of Wisconsin.

 

“Moody’s” means Moody’s Investors Service, Inc., or its successor.

 

“Motor Vehicle” means a new or used automobile or light duty truck.

 

“Motor Vehicle Loan” means retail installment sales contract secured by a Motor
Vehicle originated by a Dealer and purchased by an Originator.

 

“Net Loss Ratio” means, for any Collection Period, the ratio, expressed as an
annualized percentage, of (a) Realized Losses minus Recoveries for such
Collection Period, to (b) the average of the aggregate Principal Balance of the
Receivables as of the last day of the immediately preceding Collection Period
and the last day of such Collection Period.

 

“Northwoods” means M&I Northwoods III LLC, a Delaware limited liability company,
as a transferor under the Purchase Agreement.

 

“Note” means a Class A Note or Class B Note.

 

“Note Depository Agreement” means the letter of representations among the Trust
and The Depository Trust Company, as the initial Clearing Agency, dated as of
the Closing Date, relating to the Notes, as the same may be amended or
supplemented from time to time.

 

“Note Owner” means, with respect to a Book-Entry Note, the person who is the
owner of such Book-Entry Note, as reflected on the books of the Clearing Agency,
or on the books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect participant, in
each case in accordance with the rules of such Clearing Agency).

 

9045475 05134611   Appendix X-13    2005-1 Definitions

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“Note Paying Agent” shall mean the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Indenture Trustee to make
payments to and distributions from the Trust Accounts, including payment of
principal of or interest on the Notes on behalf of the Trust.

 

“Note Pool Factor” for each class of Notes as of the close of business on a
Payment Date means a seven-digit decimal figure equal to the outstanding
principal balance of such class of Notes divided by the original outstanding
principal balance of such class of Notes. The Note Pool Factor for each class of
Notes will be 1.0000000 as of the Cutoff Date; thereafter, the Note Pool Factor
for each class of Notes will decline to reflect reductions in the outstanding
principal balance of such class of Notes.

 

“Noteholder” means the Person in whose name a Note is registered on the Note
Register.

 

“Note Register” and “Note Registrar” are defined in Section 2.4 of the
Indenture.

 

“Obligations” means, with respect to any Bankruptcy Remote Party, and securities
issued by, or any indebtedness of, such Bankruptcy Remote Party.

 

“Obligor” means, with respect to a Receivable, the borrower or co-borrowers
under the related Receivable and any co-signer of the Receivable or other Person
who owes or may be primarily or secondarily liable for payments under such
Receivable.

 

“Officer’s Certificate” means: (a) for purposes of the Indenture, a certificate
signed by any Authorized Officer of the Trust, under the circumstances described
in, and otherwise complying with, the applicable requirements of Section 11.1
and TIA § 314, and delivered to Indenture Trustee; and (b) otherwise, a
certificate signed by the chairman, the president, any vice president, any
assistant vice president, the treasurer or any assistant treasurer of Seller or
Servicer, as the case may be, and delivered to Indenture Trustee. Unless
otherwise specified, any reference in the Indenture to an Officer’s Certificate
shall be to an Officer’s Certificate of any Authorized Officer of the Owner
Trustee.

 

“Opinion of Counsel” means one or more written opinions of counsel who may,
except as otherwise expressly provided in the Indenture or any other Basic
Document, be employees of or counsel to the Trust, the Servicer, the Seller, the
Administrator, the Transferors or the Owner Trustee and which opinion or
opinions comply with the applicable requirements of the Basic Documents and
shall be in form and substance satisfactory to the recipients.

 

“Original Pool Balance” means the Pool Balance as of the Cutoff Date, which is
$650,000,017.82.

 

“Originator” means M&I Dealer Finance, Inc., a Wisconsin corporation, M&I Bank
or any of their Affiliates.

 

9045475 05134611   Appendix X-14    2005-1 Definitions

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“Outstanding” means, as of the date of determination, all Notes theretofore
authenticated and delivered under the Indenture except:

 

(a) Notes theretofore canceled by Note Registrar or delivered to Note Registrar
for cancellation;

 

(b) Notes or portions thereof the payment for which money in the necessary
amount has been theretofore deposited with Indenture Trustee or any Paying Agent
in trust for the Holders of such Notes (provided that if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant to the
Indenture or provision therefor, satisfactory to Indenture Trustee); and

 

(c) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof satisfactory
to Indenture Trustee is presented that any such Notes are held by a bona fide
purchaser;

 

provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
the Trust, any other obligor upon the Notes, Seller, the Servicer, the
Administrator or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether Indenture Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of Indenture Trustee either actually knows to be so owned or
has received written notice thereof shall be so disregarded. Notes so owned that
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of Indenture Trustee the pledgee’s right so to
act with respect to such Notes and that the pledgee is not the Trust, any other
obligor upon the Notes, Seller or any Affiliate of any of the foregoing Persons.

 

“Outstanding Amount” means the aggregate principal amount of all Notes, or class
of Notes, as applicable, Outstanding at the date of determination.

 

“Outstanding Simple Interest Advances” as of the last day of a Collection
Period, the sum of all Simple Interest Advances made as of or prior to such date
minus the sum of all payments to the Servicer as of or prior to such date
pursuant to Section 5.5(c) of the Sale and Servicing Agreement; provided,
however, that Outstanding Simple Interest Advances shall never be deemed to be
less than zero.

 

“Owner Trust Estate” means all right, title and interest of the Trust in and to
the property and rights assigned to the Trust pursuant to Article II of the Sale
and Servicing Agreement, all funds on deposit from time to time in the Trust
Accounts and the Certificate Distribution Account and all other property of the
Trust from time to time, including any rights of the Trust pursuant to the Sale
and Servicing Agreement.

 

“Owner Trustee” means Deutsche Bank Trust Company Delaware, a banking
corporation incorporated in the State of Delaware, not in its individual
capacity but solely as owner trustee under the Trust Agreement, and any
successor Owner Trustee hereunder.

 

9045475 05134611   Appendix X-15    2005-1 Definitions

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“Paying Agent” means: (a) when used in the Indenture or otherwise with respect
to the Notes, Indenture Trustee or any other Person that meets the eligibility
standards for Indenture Trustee specified in Section 6.11 of the Indenture and
is authorized by the Owner Trustee to make the payments to and distributions
from the Collection Account, including payment of principal of or interest on
the Notes on behalf of the Owner Trustee; and (b) when used in the Trust
Agreement or otherwise with respect to the Certificates, Owner Trustee or any
other paying agent or co-paying agent appointed pursuant to Section 3.9 of the
Trust Agreement.

 

“Payment Date” means the 20th day of each month (or, if the 20th day is not a
Business Day, the next succeeding Business Day), commencing December 20, 2005.

 

“Perfection Representation” means the representations attached as Schedule C to
the Sale and Servicing Agreement or Schedule A to the Purchase Agreement.

 

“Person” means a legal person, including any individual, corporation, estate,
partnership, limited liability company, joint venture, association, joint stock
company, trust, unincorporated organization, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.

 

“Physical Damage Insurance Policy” means a theft and physical damage insurance
policy maintained by the Obligor under a Receivable, providing coverage against
loss or damage to or theft of the related Financed Vehicle.

 

“Physical Property” is defined in the definition of “Delivery” above.

 

“Pool Balance” means, at any time, the aggregate Principal Balance of the
Receivables at the end of the preceding Collection Period, after giving effect
to all payments received from Obligors, Liquidation Proceeds and Purchased
Amounts to be remitted by the Servicer, all for such Collection Period, and all
Realized Losses during such Collection Period.

 

“Predecessor Note” means, with respect to any particular Note, every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under Section 2.5 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.

 

“PREFCO” means Preferred Receivables Funding Corporation, a Delaware
corporation.

 

“Principal Balance” means, as of any time, for any Receivable, the principal
balance of such Receivable under the terms of the Receivable determined in
accordance with the Servicer’s customary practices.

 

“Principal Distribution Account” shall mean the account designated as such,
established and maintained as such pursuant to the Sale and Servicing Agreement.

 

“Proceeding” means any suit in equity, action at law or other judicial or
administrative proceeding.

 

9045475 05134611   Appendix X-16    2005-1 Definitions

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“Purchase Agreement” means the agreement dated as of November 22, 2005 among
Northwoods, JPMorgan (as agent on behalf of PREFCO and Falcon) and Seller under
which Northwoods and JPMorgan (as agent on behalf of PREFCO and Falcon) sold the
Receivables to Seller and JPMorgan (as agent on behalf of PREFCO and Falcon) and
Northwoods sold any right, title and interest it owned in the Receivables to
Seller.

 

“Purchase Amount” of any Receivable means, with respect to any Deposit Date and
the last day of the related Collection Period, an amount equal to the sum of
(a) the outstanding Principal Balance of such Receivable as of the last day of
such Collection Period and (b) the amount of accrued and unpaid interest on such
Principal Balance at the related Contract Rate from the date a payment was last
made by or on behalf of the Obligor through and including the last day of such
Collection Period, in each case after giving effect to the receipt of monies
collected on such Receivable in such Collection Period.

 

“Purchase Price” is defined in Section 2.3 of the Purchase Agreement.

 

“Purchased Assets” is defined in Section 2.1 of the Purchase Agreement.

 

“Purchased Receivable” means a Receivable purchased as of the close of business
on the last day of a Collection Period by Servicer pursuant to Section 4.7 or
Section 3.3 of the Sale and Servicing Agreement.

 

“Rating Agencies” means Moody’s, Standard & Poor’s and Dominion.

 

“Rating Agency Condition” means, with respect to any event or circumstance and
each Rating Agency, either (a) written confirmation by such Rating Agency that
the occurrence of such event or circumstance will not cause such Rating Agency
to downgrade or withdraw its rating assigned to any of the Notes or (b) that
such Rating Agency shall have been given notice of such event at least ten days
prior to the occurrence of such event (or, if ten days’ advance notice is
impracticable, as much advance notice as is practicable) and such Rating Agency
shall not have issued any written notice that the occurrence of such event will
itself cause such Rating Agency to downgrade or withdraw its rating assigned to
the Notes.

 

“Realized Losses” means, for any Collection Period and for each Receivable that
became a Defaulted Receivable during such Collection Period, the aggregate
Principal Balance of each such Receivable when such Receivable became a
Defaulted Receivable.

 

“Receivable” means each Motor Vehicle Loan described in the Schedule of
Receivables on the Closing Date but excluding (i) Defaulted Receivables to the
extent the Principal Balances thereof have been deposited in the Collection
Account and (ii) any Purchased Receivables.

 

“Receivable Files” is defined in Section 3.4 of the Sale and Servicing
Agreement.

 

“Record Date” means, with respect to any Payment Date or Redemption Date, the
close of business on the Business Day immediately preceding such Payment Date or
Redemption Date; or, if Definitive Notes or Definitive Certificates have been
issued, the last day of the month preceding such Payment Date or Redemption
Date.

 

9045475 05134611   Appendix X-17    2005-1 Definitions

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“Recoveries” mean, with respect to any Collection Period, all monies received by
the Servicer with respect to any Defaulted Receivable after such Receivable
became a Defaulted Receivable, net of any fees, costs and expenses incurred by
the Servicer in connection with the collection of such Receivable and any
payments required by law to be remitted to the Obligor.

 

“Redemption Date” means in the case of a redemption of the Notes pursuant to
Section 10.1 of the Indenture, the Payment Date specified by Servicer or the
Owner Trustee pursuant to such Section 10.1.

 

“Redemption Price” means, in the case of a redemption of the Notes pursuant to
Section 10.1 of the Indenture, an amount equal to the unpaid principal amount of
the then outstanding Notes plus accrued and unpaid interest thereon to but
excluding the Redemption Date.

 

“Regular Principal Distribution Amount” mean, with respect to any Payment Date,
an amount not less than zero, equal to (i) the sum of the aggregate Outstanding
Amount of the Class A Notes and the Class B Notes as of the preceding payment
date (after giving effect to any principal payments made on the notes on such
preceding payment date), minus (ii) the Pool Balance at the end of the
Collection Period preceding that Payment Date, minus (iii) the First Priority
Principal Distribution; provided, however, that the Regular Principal
Distribution Amount on and after the Final Scheduled Payment Date of the Class B
Notes shall not be less than the amount that is necessary to reduce the
Outstanding Amount of the Class B Notes to zero.

 

“Related Agreements” shall have the meaning specified in the recitals to the
Administration Agreement.

 

“Required Rating” means a rating with respect to short term deposit obligations
of at least P-1 by Moody’s and at least A-1 by Standard & Poor’s.

 

“Reserve Account” means the account designated as such, established and
maintained pursuant to Section 8.6 of the Indenture.

 

“Reserve Account Deposit” is defined in Section 5.8(b) of the Sale and Servicing
Agreement.

 

“Reserve Account Deposit Amount” means an amount equal to $8,125,000 which is
1.250% of the aggregate Principal Balance of the Receivables as of the Cutoff
Date.

 

“Reserve Account Excess Amount” means, with respect to any Payment Date an
amount equal to the excess, if any, of (a) the amount of cash or other
immediately available funds in the Reserve Account on that Payment Date (other
than interest income and earnings), prior to giving effect to any withdrawals
from the Reserve Account relating to that Payment Date, over (b) the Specified
Reserve Balance with respect to that Payment Date.

 

“Reserve Account Property” means the Reserve Account, the Reserve Account
Deposit and all proceeds of the Reserve Account and the Reserve Account Deposit,
including all securities, investments, general intangibles, financial assets and
investment property from time to time credited to and any security entitlement
to the Reserve Account.

 

9045475 05134611   Appendix X-18    2005-1 Definitions

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“Reserve Account Transfer Amount” means, with respect to any Payment Date, an
amount equal to the lesser of (a) the amount of cash or other immediately
available funds on deposit in the Reserve Account on such Payment Date (other
than interest income and earnings) (after giving effect to any withdrawal of the
Reserve Account Excess Amount on such Payment Date) and (b) the amount, if any,
by which (i) the Total Required Payments for such Payment Date exceeds (ii) the
Available Funds for such Payment Date. In addition, if the sum of the amounts in
the Reserve Account and the remaining Available Funds after the payments under
clauses first through seventh of Section 5.5(c) of the Sale and Servicing
Agreement would be sufficient to pay in full the aggregate unpaid Outstanding
Amount of all of the Classes of Notes, then the Reserve Account Transfer Amount
will, if so specified by the Servicer in the Servicer’s Report, include such
additional amount as may be necessary to pay all Outstanding Notes in full.

 

“Responsible Officer” means, with respect to Indenture Trustee, any officer
within the Corporate Trust Office of Indenture Trustee and having direct
responsibility with respect to the Notes and the other Basic Documents, and,
with respect to the Owner Trustee, any officer within the Corporate Trust Office
of the Owner Trustee and having direct responsibility for the administration of
the Trust, including any Vice President, Assistant Vice President, Assistant
Treasurer, Assistant Secretary, or any other officer of Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer’s knowledge of
and familiarity with the particular subject.

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement among the
Trust, Indenture Trustee, M&I Bank, as Servicer, and M&I Dealer Auto
Securitization, LLC, as Seller, dated as of November 22, 2005, as the same may
be amended and supplemented from time to time.

 

“Schedule of Receivables” means, with respect to the Motor Vehicle Loans to be
conveyed to Seller by Northwoods and JPMorgan (as agent on behalf of PREFCO and
Falcon) and to the Trust by Seller, the list identifying such Motor Vehicle
Loans delivered to Indenture Trustee on the Closing Date.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Securities Intermediary” is defined in Section 5.8 of the Sale and Servicing
Agreement.

 

“Seller” means M&I Dealer Auto Securitization, LLC, a Delaware limited liability
company, and any Successors pursuant to Section 6.4 of the Sale and Servicing
Agreement.

 

“Servicer” means M&I Bank and each Successor Servicer.

 

“Servicer Termination Event” means an event specified in Section 8.1 of the Sale
and Servicing Agreement.

 

“Servicer’s Report” means a report of Servicer delivered pursuant to Section 4.9
of the Sale and Servicing Agreement, substantially in the form of Exhibit A to
that agreement.

 

9045475 05134611   Appendix X-19    2005-1 Definitions

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“Servicing Fee” means, (a) for any Payment Date other than the December 2005
Payment Date, the product of (i) one-twelfth, (ii) the Servicing Rate and
(iii) the Pool Balance as of the open of business on the first day of the
related Collection Period, and (b) for the December 2005 Payment Date, the
product of (i) the actual number of days from the Cutoff Date to the end of the
first Collection Period divided by 360, (ii) the Servicing Fee Rate and
(iii) the Pool Balance as of the Cutoff Date.

 

“Servicing Rate” means 0.50% per annum.

 

“Simple Interest Advances” means the amount advanced into the Collection Account
on or before each Deposit Date which is equal to the amount of interest that
would have been received during the related Collection Period on all delinquent
Receivables assuming that the payment on each such delinquent Receivable would
have been received on its respective due date during such Collection Period.

 

“Simple Interest Method” means the method of allocating fixed level payment
monthly installments between principal and interest, pursuant to which such
payment is allocated first to accrued and unpaid interest at the Contract Rate
on the unpaid principal balance and the remainder of such payment is allocable
to principal.

 

“Simple Interest Receivable” means any Receivable under which the portion of a
payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.

 

“Specified Reserve Balance” for a Payment Date will be equal to 1.250% of the
sum of the aggregate Principal Balance of the Receivables as of the Cutoff Date.
In no event will the Specified Reserve Balance exceed the aggregate Principal
Balance of the Receivables as of the last day of the related Collection Period.

 

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., or its successor.

 

“State” means any one of the 50 states of the United States of America or the
District of Columbia.

 

“Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code, as
amended from time to time.

 

“Successor Servicer” is defined in Section 3.7(e) of the Indenture.

 

“Supplemental Servicing Fee” is defined in Section 4.8 of the Sale and Servicing
Agreement.

 

“Total Distribution Amount” means, for each Payment Date, the sum of (a) the
Available Funds, and (b) the Reserve Account Transfer Amount, in each case in
respect of such Payment Date.

 

9045475 05134611   Appendix X-20    2005-1 Definitions

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“Total Required Payment” shall mean, with respect to any Payment Date, the sum
of the Outstanding Simple Interest Advances reimbursed to the Servicer, the
Servicing Fee and all unpaid Servicing Fees from prior Collection Periods, the
Accrued Class A Note Interest, the First Priority Principal Distribution Amount,
the Accrued Class B Note Interest and the Regular Principal Distribution Amount;
provided, however, that following the occurrence and during the continuation of
an Event of Default which has resulted in an acceleration of the Notes, on any
Payment Date until the Payment Date on which the outstanding principal amount of
all the Notes has been paid in full, the Total Required Payment shall mean the
sum of amounts due to the Indenture Trustee under Section 6.7 of the Indenture
(not to exceed $200,000 in the aggregate), all Outstanding Simple Interest
Advances reimbursed to the Servicer, the Servicing Fee and all unpaid Servicing
Fees from prior Collection Periods, the Accrued Class A Note Interest, the
Accrued Class B Note Interest and the amount necessary to reduce the outstanding
Principal Balance of all the Notes to zero.

 

“Transferors” means Northwoods and JPMorgan (as agent on behalf of PREFCO and
Falcon), collectively.

 

“Treasury Regulations” means regulations, including proposed or temporary
regulations, promulgated under the Code.

 

“Trust” shall mean M&I Auto Loan Trust 2005-1, a Delaware statutory trust
established pursuant to the Trust Agreement.

 

“Trust Accounts” means the Collection Account, the Reserve Account and the
Principal Distribution Account.

 

“Trust Account Property” means the Trust Accounts, all amounts and investments
held from time to time in any Trust Account (whether in the form of deposit
accounts, Physical Property, book-entry securities, uncertificated securities or
otherwise), and all proceeds of the foregoing.

 

“Trust Agreement” means the Amended and Restated Trust Agreement dated as of
November 22, 2005, among the Administrator, the Seller and Owner Trustee, as the
same may be amended and supplemented from time to time.

 

“Trust Estate” means all money, instruments, rights and other property that are
subject or intended to be subject to the Lien and security interest of the
Indenture for the benefit of the Noteholders (including all property and
interests Granted to Indenture Trustee), including all proceeds thereof.

 

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as
amended, and the rules and regulations promulgated thereunder, as in force on
the date hereof, unless otherwise specifically provided.

 

“Trust Property” shall have the meaning set forth in Section 2.1 of the Sale and
Servicing Agreement.

 

“UCC” means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.

 

9045475 05134611   Appendix X-21    2005-1 Definitions