Document:

efc12-618_ex42.htm

Exhibit 4.2

 

 

$[________________]

 

 

Asset Backed Notes

 

 

MERCEDES-BENZ AUTO RECEIVABLES TRUST 201[_]-[_],

 

 

as Issuer,

 

and

 

[________________________],

 

as Indenture Trustee

 

 

FORM OF INDENTURE

 

Dated as of [____], 201[_]

 

 

  

  

  

 

CROSS REFERENCE TABLE*

 

	
   TIA

Section

	

Indenture

Section

	
310       (a)(1)

	
6.11

	
(a)(2)

	
6.11

	
(a)(3)

	
6.10; 6.11

	
(a)(4)

	
N.A.**

	
(a)(5)

	
6.11

	
(b)

	
6.08; 6.11

	
(c)

	
N.A.

	
311       (a)

	
6.12

	
(b)

	
6.12

	
(c)

	
N.A.

	
312       (a)

	
7.01

	
(b)

	
7.02

	
(c)

	
7.02

	
313       (a)

	
7.04

	
(b)(1)

	
7.04

	
(b)(2)

	
7.04

	
(c)

	
7.04; 11.05

	
(d)

	
7.04

	
314       (a)

	
3.09; 7.03

	
(b)

	
3.06; 11.15

	
(c)(1)

	
11.01

	
(c)(2)

	
11.01

	
(c)(3)

	
11.01

	
(d)

	
11.01

	
(e)

	
11.01

	
(f)

	
11.01

	
315       (a)

	
6.01

	
(b)

	
6.05; 11.01

	
(c)

	
6.01

	
(d)

	
6.01

	
(e)

	
5.13

	
316       (a)

	
1.01

	
(a)(1)(A)

	
5.11

	
(a)(1)(B)

	
5.12

	
(a)(2)

	
N.A.

	
(b)

	
5.07

	
(c)

	
N.A.

	
317       (a)(1)

	
5.03

	
(a)(2)

	
5.03

	
(b)

	
3.03

	
318       (a)

	
11.07

 

 

	
*

	
This Cross Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

 

	
**

	
N.A. means Not Applicable.

 

 

  

  

  

 

 

 

 

TABLE OF CONTENTS

 

Page

 

	
ARTICLE ONE

	 
	
DEFINITIONS AND INCORPORATION BY REFERENCE

	 
	
Section 1.01.

	
Capitalized Terms; Rules of Usage

	
2

	
Section 1.02.

	
Incorporation by Reference of Trust Indenture Act

	
2

	 	 	 
	
ARTICLE TWO

	 
	
THE NOTES

	 
	
Section 2.01.

	
Form.

	
3

	
Section 2.02.

	
Execution, Authentication and Delivery.

	
3

	
Section 2.03.

	
Temporary Notes.

	
4

	
Section 2.04.

	
Tax Treatment

	
4

	
Section 2.05.

	
Registration; Registration of Transfer and Exchange.

	
4

	
Section 2.06.

	
Mutilated, Destroyed, Lost or Stolen Notes.

	
6

	
Section 2.07.

	
Persons Deemed Owner

	
6

	
Section 2.08.

	
Payment of Principal and Interest.

	
7

	
Section 2.09.

	
Cancellation

	
10

	
Section 2.10.

	
Book-Entry Notes

	
11

	
Section 2.11.

	
Notices to Clearing Agency

	
11

	
Section 2.12.

	
Definitive Notes

	
12

	
Section 2.13.

	
Release of Collateral

	
12

	
Section 2.14.

	
Employee Benefit Plans

	
12

	
Section 2.15.

	
Authenticating Agents

	
13

	 	 	 
	
ARTICLE THREE

	 
	
COVENANTS

	 
	
Section 3.01.

	
Payment of Principal and Interest

	
14

	
Section 3.02.

	
Maintenance of Office or Agency

	
14

	
Section 3.03.

	
Money for Payments to be Held in Trust

	
14

	
Section 3.04.

	
Existence

	
15

	
Section 3.05.

	
Protection of Trust Estate

	
16

	
Section 3.06.

	
Opinions as to Trust Estate.

	
16

	
Section 3.07.

	
Performance of Obligations; Servicing of Receivables.

	
17

	
Section 3.08.

	
Negative Covenants

	
18

	
Section 3.09.

	
Annual Statement as to Compliance

	
19

	
Section 3.10.

	
Issuer May Consolidate, etc., Only on Certain Terms.

	
19

	
Section 3.11.

	
Successor or Transferee.

	
21

	
Section 3.12.

	
Servicer’s Obligations

	
21

 

  

i

  

 

Page

 

	
Section 3.13.

	
Guarantees, Loans, Advances and Other Liabilities

	
21

	
Section 3.14.

	
Capital Expenditures

	
21

	
Section 3.15.

	
Removal of Administrator

	
21

	
Section 3.16.

	
Restricted Payments

	
21

	
Section 3.17.

	
Notice of Events of Default

	
22

	
Section 3.18.

	
Further Instruments and Acts

	
22

	
Section 3.19.

	
Compliance with Laws

	
22

	
Section 3.20.

	
Amendments of Sale and Servicing Agreement and Trust Agreement

	
22

	 	 	 
	
ARTICLE FOUR

	 
	
SATISFACTION AND DISCHARGE

	 
	
Section 4.01.

	
Satisfaction and Discharge of Indenture

	
23

	
Section 4.02.

	
Satisfaction, Discharge and Defeasance of the Notes.

	
24

	
Section 4.03.

	
Application of Trust Money

	
25

	
Section 4.04.

	
Repayment of Monies Held by Paying Agent

	
25

	 	 	 
	
ARTICLE FIVE

	 
	
EVENTS OF DEFAULT; REMEDIES

	 
	
Section 5.01.

	
Events of Default

	
26

	
Section 5.02.

	
Acceleration of Maturity; Rescission and Annulment.

	
27

	
Section 5.03.

	
Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

	
28

	
Section 5.04.

	
Remedies.

	
30

	
Section 5.05.

	
Optional Preservation of the Trust Estate

	
31

	
Section 5.06.

	
Limitation of Suits

	
31

	
Section 5.07.

	
Unconditional Rights of Noteholders to Receive Principal and Interest

	
31

	
Section 5.08.

	
Restoration of Rights and Remedies

	
32

	
Section 5.09.

	
Rights and Remedies Cumulative

	
32

	
Section 5.10.

	
Delay or Omission Not a Waiver

	
32

	
Section 5.11.

	
Control by Noteholders of the Controlling Class

	
32

	
Section 5.12.

	
Waiver of Past Defaults

	
33

	
Section 5.13.

	
Undertaking for Costs

	
33

	
Section 5.14.

	
Waiver of Stay or Extension Laws

	
33

	
Section 5.15.

	
Action on Notes

	
33

	
Section 5.16.

	
Performance and Enforcement of Certain Obligations.

	
34

 

  

ii

  

 

Page

 

	
ARTICLE SIX

	 
	
THE INDENTURE TRUSTEE

	 
	
Section 6.01.

	
Duties of Indenture Trustee.

	
35

	
Section 6.02.

	
Rights of Indenture Trustee.

	
36

	
Section 6.03.

	
Individual Rights of Indenture Trustee

	
37

	
Section 6.04.

	
Indenture Trustee’s Disclaimer

	
37

	
Section 6.05.

	
Notice of Defaults

	
37

	
Section 6.06.

	
Reports and Documents by Indenture Trustee to Noteholders

	
37

	
Section 6.07.

	
Compensation and Indemnity.

	
37

	
Section 6.08.

	
Replacement of Indenture Trustee.

	
38

	
Section 6.09.

	
Successor Indenture Trustee by Merger.

	
39

	
Section 6.10.

	
Appointment of Co-Trustee or Separate Trustee.

	
40

	
Section 6.11.

	
Eligibility; Disqualification

	
41

	
Section 6.12.

	
Preferential Collection of Claims Against Issuer

	
41

	
Section 6.13.

	
Representations and Warranties of Indenture Trustee

	
41

	
Section 6.14.

	
Furnishing of Documents

	
41

	
Section 6.15.

	
Encryption

	
41

	 	 	 
	
ARTICLE SEVEN

	 
	
NOTEHOLDERS’ LISTS AND REPORTS

	 
	
Section 7.01.

	
Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders

	
43

	
Section 7.02.

	
Preservation of Information; Communications, Reports and Certain Documents to Noteholders.

	
43

	
Section 7.03.

	
Reports by Issuer.

	
43

	
Section 7.04.

	
Reports by Indenture Trustee.

	
44

	 	 	 
	
ARTICLE EIGHT

	 
	
ACCOUNTS, DISBURSEMENTS AND RELEASES

	 
	
Section 8.01.

	
Collection of Money

	
45

	
Section 8.02.

	
Accounts.

	
45

	
Section 8.03.

	
General Provisions Regarding Accounts.

	
46

	
Section 8.04.

	
Release of Trust Estate.

	
46

	
Section 8.05.

	
Opinion of Counsel

	
47

 

  

iii

  

Page

 

	
ARTICLE NINE

	 
	
SUPPLEMENTAL INDENTURES

	 
	
Section 9.01.

	
Supplemental Indentures Without Consent of Noteholders.

	
48

	
Section 9.02.

	
Supplemental Indentures with Consent of Noteholders

	
49

	
Section 9.03.

	
Execution of Supplemental Indentures

	
51

	
Section 9.04.

	
Effect of Supplemental Indenture

	
51

	
Section 9.05.

	
Conformity with Trust Indenture Act

	
51

	
Section 9.06.

	
Reference in Notes to Supplemental Indentures

	
51

	 	 	 
	
ARTICLE TEN

	 
	
REDEMPTION OF NOTES

	 
	
Section 10.01.

	
Redemption

	
52

	
Section 10.02.

	
Form of Redemption Notice

	
52

	
Section 10.03.

	
Notes Payable on Redemption Date

	
52

	 	 	 
	
ARTICLE ELEVEN

	 
	
MISCELLANEOUS

	 
	
Section 11.01.

	
Compliance Certificates and Opinions, etc.

	
54

	
Section 11.02.

	
Form of Documents Delivered to Indenture Trustee.

	
55

	
Section 11.03.

	
Acts of Noteholders.

	
56

	
Section 11.04.

	
Notices, etc., to Indenture Trustee, Issuer, Depositor and Rating Agencies

	
57

	
Section 11.05.

	
Notices to Noteholders; Waiver

	
57

	
Section 11.06.

	
Alternate Payment and Notice Provisions

	
58

	
Section 11.07.

	
Conflict with Trust Indenture Act

	
58

	
Section 11.08.

	
Effect of Headings and Table of Contents

	
58

	
Section 11.09.

	
Successors and Assigns

	
58

	
Section 11.10.

	
Severability

	
58

	
Section 11.11.

	
Benefits of Indenture; Third Party Beneficiaries

	
58

	
Section 11.12.

	
Legal Holidays

	
58

	
Section 11.13.

	
GOVERNING LAW

	
59

	
Section 11.14.

	
Counterparts

	
59

	
Section 11.15.

	
Recording of Indenture

	
59

	
Section 11.16.

	
Trust Obligation

	
59

	
Section 11.17.

	
No Petition

	
59

	
Section 11.18.

	
No Recourse

	
60

	
Section 11.19.

	
Inspection

	
60

	
Section 11.20.

	
Subordination Agreement

	
60

 

  

iv

  

Page

 

	
Section 11.21.

	
Security Interest Matters.

	
60

	
Section 11.22.

	
Representations and Warranties as to Security Interests

	
61

 

EXHIBITS

 

	
Exhibit A –

	
Form of Notes

	
A-1

	
Exhibit B –

	
Form of Repurchase Request Notice

	
B-1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

v

 

 

  

This INDENTURE, dated as of [____], 201[_] (as amended, restated, supplemented or otherwise modified from time to time, this “Indenture”), is between MERCEDES-BENZ AUTO RECEIVABLES TRUST 201[_]-[_], a Delaware statutory trust (the “Issuer”), and [__________________________], a national banking association, not in its individual capacity but solely as trustee (the “Indenture Trustee”).

 

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the holders of the Issuer’s [____]% Class A-1 Asset Backed Notes (the “Class A-1 Notes”), [Floating Rate] Class A-2 Asset Backed Notes (the “Class A-2 Notes”), [____]% Class A-3 Asset Backed Notes (the “Class A-3 Notes”), [____]% Class A-4 Asset Backed Notes (the “Class A-4 Notes” and, together with the Class A-1 Notes, the Class A-2 Notes, and the Class A-3 Notes, the “Class A Notes”) and [____]% Class B Asset Backed Notes (the “Class B Notes” and, together with the Class A Notes, the “Notes”):

 

GRANTING CLAUSE

 

The Issuer hereby Grants to the Indenture Trustee on the Closing Date, on behalf of and for the benefit of the Noteholders, without recourse, all of the Issuer’s right, title and interest in, to and under, whether now owned or existing or hereafter acquired or arising, (i) the Receivables, (ii) all amounts due and collected on or in respect of the Receivables after the Cutoff Date, (iii) the security interests in the Financed Vehicles granted by the Obligors pursuant to the Receivables, (iv) all proceeds from claims on any physical damage or theft insurance policies and extended warranties covering the Financed Vehicles and any proceeds of any credit life or credit disability insurance policies relating to the Receivables, the Financed Vehicles or the Obligors, (v) the Receivable Files, (vi) the Collection Account, the Note Payment Account, the Reserve Fund and all amounts, securities, Financial Assets, investments and other property deposited in or credited to any of the foregoing and all proceeds thereof, (vii) all rights of the Depositor under the Receivables Purchase Agreement, including the right to require the Seller to repurchase Receivables from the Depositor, (viii) any proceeds of Dealer Recourse, (ix) all rights of the Issuer under the Sale and Servicing Agreement, including the right to require the Seller to repurchase or the Servicer to purchase Receivables from the Issuer, (x) the right to realize upon any property (including the right to receive future Net Liquidation Proceeds and Recoveries) that shall have secured a Receivable and have been repossessed by or on behalf of the Issuer, (xi) all of the Issuer’s rights and benefits under the First-Tier Assignment (but none of its obligations or burdens) and (xii) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing, and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all accounts, accounts receivable, general intangibles, chattel paper, documents, money, investment property, deposit accounts, notes, drafts, acceptances, letters of credit, letter of credit rights, Insurance Proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing (collectively, the “Collateral”).

 

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority or distinction, except as otherwise provided in this Indenture and the other Basic 

 

  

  

  

 

Documents and to secure compliance with the provisions of this Indenture for the benefit of the Noteholders, all as provided in this Indenture.

 

The Indenture Trustee, as trustee on behalf of the Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in accordance with the provisions of this Indenture and agrees to perform its duties as required in this Indenture in accordance with the terms hereof.  The Issuer hereby authorizes the filing of a financing statement against the Issuer describing the Collateral as constituting all assets of the Issuer as debtor, including its present and future right, title and interest in, to and under (but not, except to the extent required by law, any obligations with respect to) whether now owned or existing or hereafter arising or acquired and wheresoever located.

 

 

ARTICLE ONE

 

 

 

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.  Capitalized Terms; Rules of Usage

.  Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in Appendix A to the Sale and Servicing Agreement, dated as of [____], 201[_], among the Issuer, Daimler Retail Receivables LLC, as depositor, and Mercedes-Benz Financial Services USA LLC, as seller and servicer, which Appendix is hereby incorporated into and made a part of this Indenture.  Appendix A also contains rules as to usage applicable to this Indenture.

 

Section 1.02.  Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the TIA, that provision is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

 

“indenture securities” means the Notes.

 

“indenture security holder” means a Noteholder.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means the Indenture Trustee.

 

“obligor” on the indenture securities means the Issuer and any other obligor on the indenture securities.

 

All other TIA terms used in this Indenture that are defined in the TIA, defined by TIA reference to another statute or defined by Commission rule have the meaning assigned to them by such definitions.

 

  

2

  

ARTICLE TWO

 

THE NOTES

 

Section 2.01.  Form.

 

(a)           The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class B Notes, in each case together with the Indenture Trustee’s certificate of authentication, shall be issued in definitive form in substantially the form set forth in Exhibit A, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the Authorized Officer of the Issuer executing such Notes, as evidenced by his or her execution of the Notes.  Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.  Except as provided in Section 2.12, owners of beneficial interests in Book-Entry Notes will not be entitled to receive physical delivery of Definitive Notes.

 

(b)           The Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the Authorized Officers executing such Notes, as evidenced by their execution of such Notes.

 

The terms of the Notes as set forth in Exhibit A are part of the terms of this Indenture.

 

Section 2.02.  Execution, Authentication and Delivery.

 

(a)           The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers.  The signature of any such Authorized Officer on the Notes may be manual or facsimile.  Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices on the date of such Notes.

 

(b)           The Indenture Trustee shall, upon Issuer Order, authenticate and deliver for original issue the following aggregate principal amounts of Notes: (i) $[______] of Class A-1 Notes, (ii) $[______] of Class A-2 Notes, (iii) $[______] of Class A-3 Notes, (iv) $[______] of Class A-4 Notes and (v) $[______] of Class B Notes.  The aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes Outstanding at any time may not exceed such respective amounts except as provided in Section 2.06.

 

(c)           Each Note shall be dated the date of its authentication.  The Notes shall be issuable as registered Notes in minimum denominations of $1,000 and in integral multiples of $1,000 in excess thereof.

 

(d)           No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual 

 

  

3

  

 

signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

Section 2.03.  Temporary Notes.

 

(a)           Pending the preparation of Definitive Notes pursuant to Section 2.12, the Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes.

 

(b)           If temporary Notes are issued, the Issuer shall cause Definitive Notes to be prepared without unreasonable delay.  After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be maintained as provided in Section 3.02, without charge to the related Noteholder.  Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute, and the Indenture Trustee shall authenticate and deliver in exchange therefor, a like tenor and principal amount of Definitive Notes of authorized denominations.  Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes.

 

Section 2.04.  Tax Treatment.  The Issuer has entered into this Indenture, and the Notes will be issued, with the intention that, for all purposes including federal, State and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the Issuer secured by the Trust Estate.  The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner by its acceptance of an interest in the applicable Book-Entry Note), agree to treat the Notes as indebtedness of the Issuer for all purposes, including federal, State and local income, single business and franchise tax purposes.

 

Section 2.05.  Registration; Registration of Transfer and Exchange.

 

(a)           The Issuer shall cause to be kept a register (the “Note Register”) in which the Issuer shall provide for the registration of Notes and the registration of transfers of Notes.  The Indenture Trustee initially shall be the registrar (the “Note Registrar”) for the purpose of registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar.

 

(b)           If a Person other than the Indenture Trustee is appointed by the Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Indenture Trustee shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to rely upon a certificate executed on behalf of the Note Registrar by an Executive Officer thereof as to the names and addresses of the Holders of the Notes and the principal amounts and number of such Notes.

 

  

4

  

(c)           Upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained as provided in Section 3.02, if the requirements of Section 8-401 of the UCC are met, the Owner Trustee shall execute, on behalf of the Issuer, and the Indenture Trustee shall authenticate and deliver to the Noteholder making such surrender and the Noteholder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Notes of the same Class in any authorized denomination and a like aggregate principal amount.

 

(d)           At the option of the related Noteholder, Notes may be exchanged for other Notes in any authorized denominations, of a like aggregate principal amount, upon surrender of such Notes at such office or agency.  Whenever any Notes are so surrendered for exchange, if the requirements of Section 8-401 of the UCC are met, the Owner Trustee shall execute, on behalf of the Issuer, the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee the Notes that the Noteholder making such exchange is entitled to receive.

 

Every Note presented or surrendered for registration of transfer or exchange shall (if so required by the Issuer or the Indenture Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form and substance satisfactory to the Issuer and the Indenture Trustee, duly executed by the Noteholder thereof or its attorney-in-fact duly authorized in writing.

 

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

 

No service charge shall be made to a Noteholder for any registration of transfer or exchange of Notes, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith, other than exchanges pursuant to Sections 2.03 or 9.06 not involving any transfer.

 

(e)           The preceding provisions of this Section notwithstanding, the Issuer shall not be required to make, and the Note Registrar need not register, transfers or exchanges of any Note selected for redemption.

 

(f)           Each Person to whom a Note is transferred will be required to represent, in the case of a Definitive Note, or deemed to represent, in the case of a Book-Entry Note, that (i) such Person is not a Benefit Plan and is not investing on behalf of or with plan assets of a Benefit Plan or (ii) such Person is acquiring a Note and the Person’s acquisition, holding and disposition of the Note are and will be eligible for relief under PTCE 84-14, 90-1, 91-38, 95-60, 96-23 or the Statutory Exemption.

 

(g)           The Indenture Trustee shall not be responsible for ascertaining whether any transfer complies with, or for otherwise monitoring or determining compliance with, the requirements or terms of the Securities Act, applicable state securities laws, ERISA or the Code; except that if a certificate is specifically required by the terms of this Section to be provided to the Indenture Trustee by a prospective transferor or transferee, the Indenture Trustee shall be under a duty to receive and examine the same to determine whether it conforms substantially on its face to the applicable requirements of this Section.

 

  

5

  

(h)           Any purported transfer of a Note not in accordance with this Section shall be null and void and shall not be given effect for any purpose whatsoever.

 

Section 2.06.  Mutilated, Destroyed, Lost or Stolen Notes.

 

(a)           If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless and (iii) the requirements of Section 8-405 of the UCC are met, then, in the absence of notice to the Issuer, the Note Registrar or the Indenture Trustee that such Note has been acquired by a Protected Purchaser, the Issuer shall execute, and upon receipt of an Issuer Request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of like tenor and principal amount; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof.  If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a Protected Purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom such replacement Note was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a Protected Purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.

 

(b)           Upon the issuance of any replacement Note under this Section, the Issuer may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee) connected therewith.

 

(c)           Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

 

(d)           The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

 

Section 2.07.  Persons Deemed Owner.  Prior to due presentment for registration of transfer of any Note, the Issuer and any agent of the Issuer or the Indenture Trustee will treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on such Note 

 

  

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and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

 

Section 2.08.  Payment of Principal and Interest.

 

(a)           On each Distribution Date, prior to the acceleration of the maturity of the Notes following the occurrence of an Event of Default, upon receipt of written instructions from the Servicer pursuant to Section 4.08(b) of the Sale and Servicing Agreement, the Indenture Trustee shall apply Available Funds on deposit in the Collection Account to make the following payments and deposits in the following order of priority:

 

(i)      to the Servicer, the Total Servicing Fee and any Nonrecoverable Advances for the related Collection Period;

 

(ii)     to the Trustees, pro rata, to the extent not previously paid pursuant to Section 1.02(b)(i) of the Administration Agreement, Sections 8.01 and 8.02 of the Trust Agreement, Section 6.02 of the Sale and Servicing Agreement or Section 6.07, the Total Trustee Fees for the related Collection Period, plus any overdue Total Trustee Fees for one or more prior Collection Periods; provided, however, that such Total Trustee Fees may not exceed, in the aggregate, $100,000 in any calendar year;

 

(iii)    to the Note Payment Account, for payment to the Class A Notes, the Interest Distributable Amount, ratably, for each Class of Class A Notes;

 

(iv)    to the Note Payment Account, for payment of principal on the Class A Notes in the priority set forth in Section 2.08(b), the Priority Principal Distributable Amount, if any;

 

(v)     to the Note Payment Account, for payment to the Class B Notes, the Interest Distributable Amount for the Class B Notes;

 

(vi)    to the Reserve Fund, the Reserve Fund Deficiency for such Distribution Date, if any;

 

(vii)   to the Note Payment Account, for payment of principal on the Notes in the priority set forth in Section 2.08(b), the Regular Principal Distributable Amount, if any;

 

(viii)  if a Successor Servicer has been appointed pursuant to Section 7.02 of the Sale and Servicing Agreement, to such Successor Servicer, any Transition Costs due in connection with such transfer of servicing and not paid pursuant to Section 7.01 of the Sale and Servicing Agreement, plus the Additional Servicing Fee, if any, for the related Collection Period;

 

(ix)     to the Trustees, pro rata, the Total Trustee Fees, to the extent that they have not previously been paid as described under clause (ii) above; and

 

(x)      to the Certificateholders, any Excess Collections.

 

  

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Notwithstanding the foregoing, following the occurrence and during the continuation of an Event of Default which has resulted in an acceleration of the Notes, all Available Funds shall be deposited into the Note Payment Account and applied in accordance with Section 2.08(f).  Any distributions to be made by the Indenture Trustee under the Basic Documents may be made by the Paying Agent.

 

The Reserve Fund Draw Amount shall be used to make the payments described in Section 4.02 of the Sale and Servicing Agreement.

 

If the amount on deposit in the Note Payment Account (including any portion of the Reserve Fund Draw Amount) on any Distribution Date is less than the amount described in clause (iii) above for such Distribution Date, the Indenture Trustee, either directly or through the Paying Agent, shall pay the available amount to the Noteholders of each Class of Class A Notes pro rata based on the Interest Distributable Amount payable to such Class on such Distribution Date.

 

If on any Distribution Date, the aggregate amount on deposit in the Collection Account and the Reserve Fund equals or exceeds the Note Balance of all Notes Outstanding as of the last day of the related Collection Period, the accrued and unpaid interest thereon and all amounts due to the Servicer and the Trustees, the Servicer shall provide written notification thereof to the Indenture Trustee and shall direct the Indenture Trustee to apply all such amounts to retire the Notes and to pay all such amounts due to the Servicer and the Trustees in accordance with the provisions of this Section.

 

[So long as the Class A-2 Notes are Outstanding, the Indenture Trustee will determine the Class A-2 Interest Rate for each Interest Period on the second LIBOR Business Day prior to the preceding Distribution Date; provided, that for the initial Interest Period the Class A-2 Interest Rate will be [____]%.  All determinations of the Class A-2 Interest Rate by the Indenture Trustee, in the absence of manifest error, will be conclusive and binding on the Noteholders. Upon its determination of the Class A-2 Interest Rate, the Indenture Trustee shall communicate the rate to the Servicer.]

 

(b)           The principal of each Note shall be payable in installments on each Distribution Date in an aggregate amount (unless the Notes have been declared immediately due and payable following an Event of Default) for all Classes of Notes equal to the Aggregate Principal Distributable Amount.  On each Distribution Date, upon receipt of instructions from the Servicer pursuant to Section 4.08(b) of the Sale and Servicing Agreement and subject to Section 2.08(f), the Indenture Trustee shall either directly or through a Paying Agent apply or cause to be applied the amount on deposit in the Note Payment Account on such Distribution Date in respect of the Aggregate Principal Distributable Amount, to make the following payments in the following order of priority:

 

(i)      to the Class A-1 Notes, until the principal amount of the Class A-1 Notes has been paid in full;

 

(ii)     to the Class A-2 Notes until the principal amounts of the Class A-2 Notes have been paid in full;

 

(iii)    to the Class A-3 Notes until the principal amounts of the Class A-3 Notes have been paid in full;

 

  

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(iv)    to the Class A-4 Notes until the principal amounts of the Class A-4 Notes have been paid in full; and

 

(v)     to the Class B Notes until the principal amounts of the Class B Notes have been paid in full

 

(c)           The unpaid principal amount, to the extent not previously paid, of the (i) Class A-1 Notes shall be due and payable on the Class A-1 Final Scheduled Distribution Date, (ii) Class A-2 Notes shall be due and payable on the Class A-2 Final Scheduled Distribution Date, (iii) Class A-3 Notes shall be due and payable on the Class A-3 Final Scheduled Distribution Date, (iv) Class A-4 Notes shall be due and payable on the Class A-4 Final Scheduled Distribution Date and (v) Class B Notes shall be due and payable on the Class B Final Scheduled Distribution Date.

 

(d)           Each Class of Notes shall accrue interest during each Interest Period at the related Interest Rate, and such interest shall be due and payable on each Distribution Date.  Interest on [the Class A-1 Notes and the Class A-2 Notes] shall be calculated on the basis of the actual number of days elapsed and a 360-day year.  Interest on the Class A-3 Notes and the Class A-4 Notes shall be calculated on the basis of a 360-day year of twelve 30-day months.  Notwithstanding any other provision hereof, no Interest Rate may exceed the maximum rate permitted by law.

 

Subject to Section 3.01, any installment of interest or principal, if any, payable on any Note that is punctually paid or duly provided for on the applicable Distribution Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the related Record Date by check mailed first-class postage prepaid to such Person’s address as it appears on the Note Register on such Record Date; provided, however, that, unless Definitive Notes have been issued pursuant to Section 2.12, with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payment shall be made by wire transfer in immediately available funds to the account designated by such nominee, and except for the final installment of principal payable with respect to such Note on a Distribution Date or on the related Final Scheduled Distribution Date (and except for the Redemption Price for any Note called for redemption in whole pursuant to Section 10.01), which shall be payable as provided below.  The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.03.

 

(e)           All principal and interest payments on a Class of Notes shall be made pro rata to the Noteholders of such Class entitled thereto.  Except as otherwise provided herein, the Indenture Trustee shall, before the Distribution Date on which the Issuer expects to pay the final installment of principal of and interest on any Note, notify the Holder of such Note as of the related Record Date of such final installment.  Such notice shall be mailed or transmitted by facsimile prior to such final Distribution Date and shall specify that such final installment shall be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment.  Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.02.

 

  

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(f)           Notwithstanding the foregoing, the unpaid principal amount of the Notes shall be due and payable, to the extent not previously paid, on the date on which an Event of Default shall have occurred and be continuing, if the Indenture Trustee or the Holders of Notes evidencing not less than [51]% of the Note Balance of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.02(a).  On each Distribution Date following acceleration of the Notes, upon receipt of instructions from the Servicer pursuant to Section 3.10 of the Sale and Servicing Agreement, the Indenture Trustee or the Paying Agent shall deposit all Available Funds into the Note Payment Account and shall apply or cause to be applied all such amounts to make the following payments and deposits in the following order of priority:

 

(i)      to the Servicer, the Total Servicing Fee and any Nonrecoverable Advances for the related Collection Period;

 

(ii)     to the Trustees, pro rata, the Total Trustee Fees, without limitation;

 

(iii)    to the Class A Noteholders, the Interest Distributable Amount for each Class of Class A Notes;

 

(iv)    to the Class A-1 Noteholders, payments of principal until the principal amount of the Class A-1 Notes has been paid in full;

 

(v)     to the Holders of each Class of remaining Class A Notes, pro rata based on the outstanding principal amount of each such Class of Class A Notes as of such Distribution Date, payments of principal until the principal amount of each such Class of remaining Class A Notes has been paid in full;

 

(vi)    to the Class B Noteholders, the Interest Distributable Amount for the Class B Notes;

 

(vii)   to the Class B Noteholders, payments of principal until the principal amount of the Class B Notes has been paid in full;

 

(viii)  if a Successor Servicer has been appointed pursuant to Section 7.02 of the Sale and Servicing Agreement, to such Successor Servicer, any Transition Costs due in connection with such transfer of servicing and not paid pursuant to Section 7.01 of the Sale and Servicing Agreement plus the Additional Servicing Fee, if any, for the related Collection Period; and

 

(ix)     to the Certificateholders, any Excess Collections.

 

Section 2.09.  Cancellation.  All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture Trustee.  The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.  No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this 

 

  

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Section, except as expressly permitted by this Indenture.  All cancelled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it; provided, that such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee.

 

Section 2.10.  Book-Entry Notes.  Except as provided in Section 2.12, the Notes, upon original issuance, will be issued in the form of a typewritten Note or Notes representing the Book-Entry Notes, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer.  The Book-Entry Notes shall be registered initially on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner will receive a definitive Note representing such Note Owner’s interest in such Book Entry Note, except as provided in Section 2.12.  Unless and until Definitive Notes have been issued to Note Owners pursuant to Section 2.12:

 

(i)      the provisions of this Section shall be in full force and effect;

 

(ii)     the Note Registrar shall be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of principal of and interest on the Notes and the giving of instructions or directions hereunder) as the sole Holder of such Notes, and shall have no obligation to the Note Owners;

 

(iii)    to the extent that the provisions of this Section conflict with any other provisions of this Indenture, the provisions of this Section shall control;

 

(iv)    the rights of Note Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the Clearing Agency or the Clearing Agency Participants; pursuant to the Note Depository Agreement, unless and until Definitive Notes are issued pursuant to Section 2.12, the Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of principal of and interest on the Notes to such Clearing Agency Participants; and

 

(v)     whenever this Indenture requires or permits actions to be taken based upon instructions or directions of the Holders of Notes (or Holders of Notes of any Class, including the Controlling Class) evidencing a specified percentage of the Note Balance, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes or such Class of Notes and has delivered such instructions to the Indenture Trustee.

 

Section 2.11.  Notices to Clearing Agency.  Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to Note Owners pursuant to Section 2.12, the Indenture Trustee shall give all such notices and communications specified herein to be given to the Noteholders to the Clearing Agency, and shall have no obligation to such Note Owners.

 

  

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Section 2.12.  Definitive Notes.  Definitive Notes will be issued only if

 

(i)      (A) the Clearing Agency is no longer willing or able to properly discharge its respon­sibilities with respect to the Book-Entry Notes and (B) the Indenture Trustee is not able to locate a qualified successor; or

 

(ii)      after the occurrence of an Event of Default, owners of Book-Entry Notes representing beneficial interests aggregating not less than [51]% of the principal amount of a Class of Notes advise the Indenture Trustee and the Clearing Agency Participant through the Clearing Agency, in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of such Note Owners.

 

In each case, the Indenture Trustee shall then notify Note Owners of the related Class of Notes through the Clearing Agency of the occurrence of any such event and of the availability of Definitive Notes of the related Class of Notes to Note Owners requesting the same.

 

Upon surrender to the Indenture Trustee of the Note or Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuer at its own expense shall execute and deliver the Definitive Notes to the Indenture Trustee and the Indenture Trustee shall authenticate the Definitive Notes in accordance with the instructions of the Clearing Agency.  None of the Issuer, the Note Registrar or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of Definitive Notes of a Class, the Indenture Trustee shall recognize the Noteholders of the Definitive Notes as Noteholders hereunder.

 

Section 2.13.  Release of Collateral.  Subject to Section 11.01 and the terms of the other Basic Documents, the Indenture Trustee shall release property from the Lien of this Indenture only upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and, if required by Section 11.01, Independent Certificates in accordance with Sections 314(c) and 314(d)(1) of the TIA or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates.  If the Commission shall issue an exemptive order under TIA Section 304(d) modifying the Indenture Trustee’s obligations under TIA Sections 314(c) and 314(d)(1), the Indenture Trustee shall release property from the Lien of this Indenture in accordance with the conditions and procedures set forth in such exemptive order.

 

Section 2.14.  Employee Benefit Plans.  The Class A Notes may, in general, be purchased by, or on behalf of, or with “plan assets” of a Benefit Plan.  A fiduciary of a Benefit Plan purchasing the Notes or a beneficial interest in such Notes, with the assets of a Benefit Plan is deemed to represent that the purchase of one or more such Notes or a beneficial interest therein is consistent with its fiduciary duties under ERISA and does not result in a nonexempt prohibited transaction as defined in Section 406 of ERISA or Section 4975 of the Code.  If the Depositor, the Seller, the Servicer, either Trustee or any of their respective Affiliates (i) has investment or administrative discretion with respect to the assets of a Benefit Plan, (ii) has authority or responsibility to give, or regularly gives, investment advice with respect to such Benefit Plan assets, for a fee and pursuant to an agreement or understanding that such advice will (a) serve as a primary basis for investment decisions with respect to such Benefit Plan assets and (b) be based 

 

  

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on the particular investment needs for such Benefit Plan or (iii) is an employer maintaining or contributing to such Benefit Plan, then a purchase of the Notes by such a Benefit Plan may represent a conflict of interest or act of self-dealing by the fiduciary.

 

Section 2.15.  Authenticating Agents.  Upon the request of the Issuer, the Indenture Trustee may appoint one or more Authenticating Agents with power to act on its behalf and subject to its direction in the authentication of Notes in connection with issuance, transfers and exchanges under Sections 2.02, 2.03, 2.05 and 2.06, as fully to all intents and purposes as though each such Authenticating Agent had been expressly authorized by such Sections to authenticate such Notes.  For all purposes of this Indenture, the authentication of Notes by an Authenticating Agent pursuant to this Section shall be deemed to be the authentication of Notes “by the Indenture Trustee”.

 

Any entity into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any entity resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any entity succeeding to all or substantially all of the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, without the execution or filing of any document or any further act on the part of the parties hereto or such Authenticating Agent or such successor entity.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE THREE

 

COVENANTS

 

Section 3.01.  Payment of Principal and Interest.  The Issuer will duly and punctually pay the principal of and interest, if any, on the Notes in accordance with the terms of the Notes and this Indenture.  Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.

 

Section 3.02.  Maintenance of Office or Agency.  The Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served.  The Issuer hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes.  The Issuer will give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency.  If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.

 

Section 3.03.  Money for Payments to be Held in Trust.  As provided in Section 8.02, all payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Accounts shall be made on behalf of the Issuer by the Indenture Trustee or by a Paying Agent, and no amounts so withdrawn from the Accounts for payments of Notes shall be paid over to the Issuer except as provided in this Section.

 

The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will:

 

(i)      hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

 

(ii)     give the Indenture Trustee notice of any default by the Issuer (or any other obligor upon the Notes) of which it has actual knowledge in the making of any payment required to be made with respect to the Notes;

 

(iii)    at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

 

(iv)    immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of the Notes if at any time it ceases to 

 

  

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meet the standards required to be met by a Paying Agent at the time of its appointment; and

 

(v)     comply with all requirements of the Code with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith.

 

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

Subject to Applicable Laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense and direction of the Issuer cause to be published once, in an Authorized Newspaper, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.  The Indenture Trustee shall also adopt and employ, at the expense and direction of the Issuer, any other reasonable means of notification of such repayment (including mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in monies due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).

 

Section 3.04.  Existence.  The Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the United States, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral and each other instrument or agreement included in the Trust Estate, including all licenses required under (i) the Maryland Vehicle Sales Finance Act or (ii) the Pennsylvania Motor Vehicle Sales Finance Act in connection with this Indenture and the other Basic Documents and the transactions contemplated hereby and thereby until such time as the Issuer shall terminate in accordance with the terms hereof.

 

  

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Section 3.05.  Protection of Trust Estate.  The Issuer intends the security interest Granted pursuant to this Indenture in favor of the Indenture Trustee on behalf of the Noteholders to be prior to all other Liens in respect of the Trust Estate, and the Issuer shall take all actions necessary to obtain and maintain, for the benefit of the Indenture Trustee on behalf of the Noteholders, a first Lien on and a first priority, perfected security interest in the Trust Estate.

 

The Issuer will from time to time authorize, execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments and will take such other action necessary or advisable to:

 

(i)      Grant more effectively any portion of the Trust Estate;

 

(ii)     maintain or preserve the Lien and security interest (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof;

 

(iii)    perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;

 

(iv)    enforce any of the Trust Estate;

 

(v)     preserve and defend title to the Trust Estate and the rights of the Indenture Trustee and the Noteholders in such Trust Estate against the claims of all Persons; or

 

(vi)    pay all taxes or assessments levied or assessed upon the Trust Estate when due.

 

The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute any financing statement, continuation statement or other instrument required to be executed pursuant to this Section.

 

Section 3.06.  Opinions as to Trust Estate.

 

(a)           On the Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel to the effect that, in the opinion of such counsel, either (i) all financing statements and continuation statements have been executed and filed that are necessary to create and continue the first priority perfected security interest of the Indenture Trustee in the Collateral for the benefit of the Noteholders, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given or (ii) no such action shall be necessary to perfect such security interest.

 

(b)           Within 90 days after the beginning of each fiscal year of the Issuer beginning with the first fiscal year beginning more than three months after the Cutoff Date, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the authorization and filing of any financing statements and continuation statements as is necessary to maintain the Lien and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such Lien an security interest.  Such Opinion of Counsel shall also describe the 

 

  

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recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the authorization and filing of any financing statements and continuation statements that shall, in the opinion of such counsel, be required to maintain the Lien and security interest of this Indenture until [March 31] in the following calendar year.

 

Section 3.07.  Performance of Obligations; Servicing of Receivables.

 

(a)           The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s material covenants or obligations under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture and the other Basic Documents or such other instrument or agreement.

 

(b)           The Issuer may contract with other Persons to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be deemed to be action taken by the Issuer.  Initially, the Issuer has contracted with the Servicer and the Administrator to assist the Issuer in performing its duties under this Indenture.

 

(c)           The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the other Basic Documents and in the instruments and agreements included in the Trust Estate, including filing or causing to be filed all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the other Basic Documents in accordance with and within the time periods provided for herein and therein.

 

(d)           If the Issuer shall have knowledge of the occurrence of a Servicer Termination Event, the Issuer shall promptly notify the Depositor, the Indenture Trustee and each Rating Agency, and shall specify in such notice the action, if any, the Issuer is taking with respect to such default.  If a Servicer Termination Event shall arise from the failure of the Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Receivables, the Issuer shall take all reasonable steps available to it to remedy such failure.

 

(e)           As promptly as possible after the giving of notice of termination to the Servicer of the Servicer’s rights and powers pursuant to Section 7.01 of the Sale and Servicing Agreement, the Indenture Trustee without further action shall be the successor to the Servicer in all respects in accordance with Section 7.02 of the Sale and Servicing Agreement.  The Indenture Trustee may resign as the Successor Servicer by giving written notice of such resignation to the Depositor and the Owner Trustee and in such event will be released from such duties and obligations, such release not to be effective until the date a new Servicer assumes the obligations under the Sale and Servicing Agreement as provided below.  Upon delivery of any such notice, the Indenture Trustee shall appoint, or petition a court of competent jurisdiction to appoint, a new Servicer as the Successor Servicer.  In the case of either the appointment of the Indenture Trustee (or any Affiliate as provided below) as Successor Servicer, or resignation of the Indenture Trustee as Servicer, the Indenture Trustee shall provide to the Depositor, in writing, such information as reasonably requested by the Depositor to comply with its reporting 

 

  

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obligation under the Exchange Act with respect to a Successor Servicer or the resignation of the Servicer.

 

Any Successor Servicer other than the Indenture Trustee shall be an Eligible Servicer.  In connection with any appointment by the Indenture Trustee of a Successor Servicer, the Indenture Trustee may make such arrangements for the compensation of such successor as it and such successor shall agree with, subject to the limitations set forth below and in the Sale and Servicing Agreement and, in accordance with Section 7.02 of the Sale and Servicing Agreement, the Successor Servicer shall assume the obligations and duties of the terminated Servicer under the Sale and Servicing Agreement.  If the Indenture Trustee shall succeed to the duties of the Servicer as provided herein, it shall do so in its individual capacity and not in its capacity as Indenture Trustee and, accordingly, the provisions of Article Six shall be inapplicable to the Indenture Trustee in its duties as the successor to the Servicer and the servicing of the Receivables.  In case the Indenture Trustee shall become successor to the Servicer under the Sale and Servicing Agreement, the Indenture Trustee shall be entitled to appoint as Servicer any one of its Affiliates or agents; provided, that the Indenture Trustee, in its capacity as Servicer, shall be fully liable for the actions and omissions of such Affiliate or agent in such capacity as Successor Servicer.  Notwithstanding any other provisions of this Indenture to the contrary, in no event shall the Indenture Trustee be liable for any servicing fee or for any differential in the amount of the servicing fee paid under the Sale and Servicing Agreement and the amount necessary to induce any Successor Servicer to act as Successor Servicer under the Sale and Servicing Agreement.

 

(f)           The Issuer shall promptly notify the Depositor and the Trustees in writing of (i) any termination of the Servicer pursuant to the Sale and Servicing Agreement and (ii) the appointment of each Successor Servicer, including its name and address.

 

(g)          The Issuer shall not waive timely performance or observance by the Depositor, the Servicer or the Seller of their respective duties or obligations under the Basic Documents if such waiver would reasonably be expected to materially adversely affect the Noteholders.

 

Section 3.08.  Negative Covenants.  So long as any Notes are Outstanding, the Issuer shall not:

 

(i)      engage in any business or activities other than those permitted by Section 2.03 of the Trust Agreement and financing, purchasing, acquiring, owning, pledging and managing the Receivables as contemplated by the Basic Documents and activities incidental to such activities;

 

(ii)     except as expressly permitted by this Indenture or the other Basic Documents, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Trust Estate, unless directed to do so in writing by the Indenture Trustee;

 

(iii)    claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Noteholder 

 

  

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by reason of the payment of the taxes levied or assessed upon any part of the Trust Estate;

 

(iv)    dissolve or liquidate in whole or in part;

 

(v)     (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the Lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any Lien (other than the Permitted Liens and the Lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof (other than tax Liens, mechanics’ Liens and other Liens that arise by operation of law, in each case on any of the Financed Vehicles and arising solely as a result of an action or omission of the related Obligor) or (C) permit the Lien of this Indenture not to constitute a valid first priority (other than with respect to any such tax, mechanics’ or other Lien) security interest in the Trust Estate; or

 

(vi)    incur, assume or guarantee any indebtedness other than the indebtedness evidenced by the Notes or indebtedness otherwise permitted by the Basic Documents.

 

Section 3.09.  Annual Statement as to Compliance.  The Issuer will deliver to the Depositor and the Indenture Trustee, on or before [June 30] of each year (commencing with the June 30 that is at least six months after the Closing Date), an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:

 

(a)           a review of the activities of the Issuer during the preceding year (or such shorter period in the case of the first such Officer’s Certificate) and of its performance under this Indenture has been made under such Authorized Officer’s supervision; and

 

(b)           to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout the preceding year (or such shorter period in the case of the first such Officer’s Certificate) or, if there has been a default in its compliance with any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

 

Section 3.10.  Issuer May Consolidate, etc., Only on Certain Terms.

 

(a)           The Issuer shall not consolidate or merge with or into any other Person, unless:

 

(i)    the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States or any State and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Depositor and the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed;

 

  

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(ii)   immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(iii)  the Issuer has been advised in writing that the ratings of the Notes and the Certificates, if any, then in effect would not be qualified, reduced or withdrawn by any Rating Agency as a result of the merger or consolidation;

 

(iv)  the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse federal income tax consequence to the Issuer, or any Securityholder;

 

(v)   any action that is necessary to maintain the Lien of this Indenture shall have been taken; and

 

(vi)  the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article and that all conditions precedent herein relating to such transaction have been complied with (including any filing required by the Exchange Act).

 

(b)           Other than as specifically contemplated by the Basic Documents, the Issuer shall not convey or transfer all or substantially all of its properties or assets, including those included in the Trust Estate, to any other Person, unless:

 

(i)      the Person that acquires by conveyance or transfer the properties or assets of the Issuer shall (A) be a United States citizen or a Person organized and existing under the laws of the United States or any State, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly agree by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Noteholders and (D) unless otherwise provided in such supplemental indenture, expressly agree to indemnify, defend and hold harmless the Issuer against and from any loss, liability or expense arising under or related to this Indenture and the Notes;

 

(ii)     immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(iii)    the Issuer has been advised in writing that the ratings of the Notes and the Certificates, if any, then in effect would not be qualified, reduced or withdrawn by any Rating Agency as a result of the merger or consolidation;

 

(iv)    the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will 

 

  

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not have any material adverse federal income tax consequence to the Issuer or any Securityholder;

 

(v)     any action that is necessary to maintain the Lien created by this Indenture shall have been taken; and

 

(vi)    the Issuer shall have delivered to the Indenture Trustee  an Officer’s Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act).

 

Section 3.11.  Successor or Transferee.

 

(a)           Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

 

(b)           Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.10(b), the Issuer will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of written notice to the Indenture Trustee stating that the Issuer is to be so released.

 

Section 3.12.  Servicer’s Obligations.  The Issuer shall cause the Servicer to comply with the Sale and Servicing Agreement.

 

Section 3.13.  Guarantees, Loans, Advances and Other Liabilities.  Except as otherwise contemplated by the Basic Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

 

Section 3.14.  Capital Expenditures.  The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).

 

Section 3.15.  Removal of Administrator.  So long as any Notes are Outstanding, the Issuer shall not remove the Administrator without cause without providing prior written notice to the Rating Agencies.

 

Section 3.16.  Restricted Payments.  Except as otherwise permitted by the Issuer Basic Documents, the Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a 

 

  

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combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, (a) distributions as contemplated by, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement or the Trust Agreement and (b) payments to the Indenture Trustee pursuant to Section 1.02(b)(ii) of the Administration Agreement.  The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account, the Note Payment Account or the Reserve Fund, except in accordance with this Indenture and the other Issuer Basic Documents.

 

Section 3.17.  Notice of Events of Default.  The Issuer shall give each Rating Agency and the Indenture Trustee prompt written notice of the occurrence of each Event of Default, each default on the part of the Seller, the Servicer or the Depositor of their respective obligations under the Sale and Servicing Agreement and each default on the part of the Seller or the Purchaser of its obligations under the Receivables Purchase Agreement.

 

Section 3.18.  Further Instruments and Acts.  Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

Section 3.19.  Compliance with Laws.  The Issuer shall comply with the requirements of all Applicable Laws, the non-compliance with which would, individually or in the aggregate, materially and adversely affect the ability of the Issuer to perform its obligations under the Notes, this Indenture or any other Issuer Basic Document.

 

Section 3.20.  Amendments of Sale and Servicing Agreement and Trust Agreement.  The Issuer shall not agree to any amendment to Section 9.01 of the Sale and Servicing Agreement or Section 11.01 of the Trust Agreement to eliminate the requirements thereunder that the Indenture Trustee or the Noteholders consent to amendments thereto as provided therein.

 

 

 

 

 

 

 

 

 

  

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ARTICLE FOUR

 

SATISFACTION AND DISCHARGE

 

Section 4.01.  Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further effect with respect to the Notes except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.11, 3.13, 3.14, 3.15, 3.16 and 3.17, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when:

 

(i)      either: (A) all Notes theretofore authenticated and delivered (other than Notes (1) that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.06 and (2) for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.03) have been delivered to the Indenture Trustee for cancellation; or (B) all Notes not theretofore delivered to the Indenture Trustee for cancellation: (1) have become due and payable, (2) will become due and payable at the Class B Final Scheduled Distribution Date within one year or (3) are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the case of clauses (1), (2) or (3) above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee, cash or direct obligations of or obligations guaranteed by the United States (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture Trustee for cancellation when due to the related Final Scheduled Distribution Date or Redemption Date (if Notes shall have been called for redemption pursuant to Section 10.01), as the case may be;

 

(ii)      the Issuer has paid or caused to be paid all other sums payable by the Issuer hereunder;

 

(iii)     the Issuer has delivered to the Depositor and the Indenture Trustee an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA or Section 11.01) an Independent Certificate, each meeting the applicable requirements of Section 11.01(a) and, subject to Section 11.02, each stating that all conditions precedent provided for in this Indenture relating to the satisfaction and discharge of this Indenture have been complied with; and

 

(iv)     the Issuer has delivered to the Depositor and the Indenture Trustee an Opinion of Counsel to the effect that the satisfaction and discharge of this Indenture 

 

  

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pursuant to this Section will not cause any Noteholder to be treated as having sold or exchanged any of its Notes for purposes of Section 1001 of the Code.

 

Section 4.02.  Satisfaction, Discharge and Defeasance of the Notes.

 

(a)           Upon satisfaction of the conditions set forth in Section 4.02(b), the Issuer shall be deemed to have paid and discharged the entire indebtedness on all the Notes Outstanding, and the provisions of this Indenture, as it relates to such Notes, shall no longer be in effect (and the Indenture Trustee, at the expense of the Issuer, shall execute proper instruments acknowledging the same), except as to:

 

(i)      the rights of the Noteholders to receive, from the trust funds described in Section 4.02(b)(i), payment of the principal of and interest on the Notes Outstanding at maturity of such principal or interest;

 

(ii)     the obligations of the Issuer with respect to the Notes under Sections 2.05, 2.06, 3.02 and 3.03;

 

(iii)    the obligations of the Administrator to the Indenture Trustee under Section 6.07; and

 

(iv)    the rights, powers, trusts and immunities of the Indenture Trustee hereunder and the duties of the Indenture Trustee hereunder.

 

(b)           The satisfaction, discharge and defeasance of the Notes pursuant to Section 4.02(a) is subject to the satisfaction of all of the following conditions:

 

(i)      the Issuer has deposited or caused to be deposited irrevocably (except as provided in Section 4.04) with the Indenture Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Noteholders, which, through the payment of interest and principal in respect thereof in accordance with their terms will provide, not later than one day prior to the due date of any payment referred to below, money in an amount sufficient, in the opinion of a nationally recognized firm of Independent Accountants expressed in a written certification thereof delivered to the Indenture Trustee, to pay and discharge the entire indebtedness on the Notes Outstanding, for principal thereof and interest thereon to the date of such deposit (in the case of Notes that have become due and payable) or to the maturity of such principal and interest, as the case may be;

 

(ii)      such deposit will not result in a breach or violation of, or constitute an event of default under, any Issuer Basic Document or other agreement or instrument to which the Issuer is bound;

 

(iii)     no Event of Default has occurred and is continuing on the date of such deposit or on the 91st day after such date; and

 

(iv)     the Issuer has delivered to the Depositor and the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent 

 

  

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provided for in this Indenture relating to the defeasance contemplated by this Section have been complied with.

 

Section 4.03.  Application of Trust Money.  All monies deposited with the Indenture Trustee pursuant to this Article shall be held in trust and applied by the Indenture Trustee, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, to the Holders of the Notes for the payment or redemption of which such monies have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest, but such monies need not be segregated from other funds except to the extent required herein or in the Sale and Servicing Agreement or required by law.

 

Section 4.04.  Repayment of Monies Held by Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all monies then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.03 and thereupon such Paying Agent shall be released from all further liability with respect to such monies.

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE FIVE

 

EVENTS OF DEFAULT; REMEDIES

 

Section 5.01.  Events of Default.  “Event of Default”, whenever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or govern­mental body):

 

(i)      default in the payment of any interest on any Note of the Controlling Class when the same becomes due and payable, and such default shall continue for a period of five days;

 

(ii)     default in the payment of the principal of any Note on its Final Scheduled Distribution Date;

 

(iii)    default in the observance or performance of any material covenant or agreement of the Issuer made in this Indenture (other than a covenant or agreement, a default in the observance or performance of which is specifically dealt with elsewhere in this Section) and such default shall continue or not be cured for a period of 60 days after there shall have been given, by registered or certified mail, to the Issuer by the Depositor or the Indenture Trustee or to the Issuer, the Depositor and the Indenture Trustee, by the Holders of Notes evidencing not less than 25% of the Note Balance of the Controlling Class, a written notice specifying such default and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

 

(iv)    any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Depositor or the Indenture Trustee or to the Issuer, the Depositor and the Indenture Trustee by the Holders of Notes evidencing not less than 25% of the Note Balance of the Controlling Class, a written notice specifying such incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of Default hereunder;

 

(v)     the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or ordering the winding-up or liquidation of the Issuer’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

 

  

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(vi)    the commencement by the Issuer of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such Insolvency Law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of any action by the Issuer in furtherance of any of the foregoing.

 

The Issuer shall deliver to the Depositor and the Indenture Trustee, within five days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which with the giving of notice, the lapse of time or both would become an Event of Default under clause (iii) or (iv) above, its status and what action the Issuer is taking or proposes to take with respect thereto.

 

Section 5.02.  Acceleration of Maturity; Rescission and Annulment.

 

(a)           If an Event of Default shall have occurred and be continuing, the Indenture Trustee or the Holders of Notes evidencing not less than [51]% of the Note Balance of the Controlling Class may, upon prior written notice to each Rating Agency, declare the Notes to be immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee if given by Noteholders), the Depositor and the Servicer, and upon any such declaration the unpaid principal amount of the Notes, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable.

 

(b)           If the Notes have been declared immediately due and payable following an Event of Default, before a judgment or decree for payment of the amount due has been obtained by the Indenture Trustee as hereinafter provided in this Article, the Holders of Notes evidencing not less than [51]% of the Note Balance of the Controlling Class, by written notice to the Issuer, the Depositor and the Indenture Trustee, may rescind and annul such declaration of acceleration and its consequences if:

 

(i)      the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay (A) all payments of principal of and interest on the Notes, (B) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel and (C) all other amounts that would then be due hereunder or upon the Notes if the Event of Default giving rise to such acceleration had not occurred; and

 

(ii)      all Events of Default, other than the nonpayment of the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.

 

No such rescission shall affect any subsequent default or impair any right consequent thereto.

 

 

 

 

 

 

 

 

  

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Section 5.03.  Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

 

(a)           The Issuer covenants that if there is a default relating to the payment of (i) any interest on any Note of the Controlling Class when the same becomes due and payable, and such default continues for a period of five days, or (ii) the principal of any Note on the related Final Scheduled Distribution Date, the Issuer will, upon demand of the Indenture Trustee, pay to it, for the benefit of the Noteholders, the whole amount then due and payable on such Notes for principal and interest, with interest upon the overdue principal at the applicable Interest Rate and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest at the applicable Interest Rate and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.

 

(b)           In  case the Issuer shall fail forthwith to pay amounts described in Section 5.03(a) upon demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor upon such Notes and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Notes, wherever situated, the monies adjudged or decreed to be payable.

 

(c)           If an Event of Default occurs and is continuing, the Indenture Trustee may, as more particularly provided in Section 5.04, in its discretion, proceed to protect and enforce its rights and the rights of the Noteholders by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

 

(d)           In case there shall be pending, relative to the Issuer or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United States Code or any other applicable Insolvency Law, or if a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial Proceedings relative to the Issuer or other obligor upon the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such Proceedings or otherwise:

 

(i)      to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and 

 

  

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each predecessor Indenture Trustee), and their respective agents and counsel and for all expenses and other amounts due and owing to the Indenture Trustee pursuant to Section 6.07 and of the Noteholders allowed in such Proceedings;

 

(ii)      unless prohibited by Applicable Law, to vote on behalf of the Noteholders in any election of a trustee, a standby trustee or Person performing similar functions in any such Proceedings;

 

(iii)     to collect and receive any monies or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders and of the Indenture Trustee on their behalf; and

 

(iv)     to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Noteholders allowed in any Proceedings relative to the Issuer, its creditors and its property;

 

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Noteholders to make payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and counsel, and all other expenses and amounts due and owing to the Indenture Trustee pursuant to Section 6.07.

 

(e)           Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such Proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

 

(f)           All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any trial or other Proceedings relative thereto, and any such action or Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Noteholders.

 

(g)           In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Noteholders, and it shall not be necessary to make any Noteholder a party to any such Proceedings.

 

  

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Section 5.04.  Remedies.

 

(a)           If the Notes have been declared to be immediately due and payable following an Event of Default, the Indenture Trustee may, or at the written direction of the Holders of Notes evidencing not less than [51]% of the Note Balance of the Controlling Class shall, take one or more of the following actions as so directed (subject to Sections 5.02 and 5.05):

 

(i)      institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained and collect from the Issuer and any other obligor upon the Notes monies adjudged due;

 

(ii)     institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;

 

(iii)    exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Noteholders; and

 

(iv)    sell or otherwise liquidate the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law;

 

provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Trust Estate at the direction of the Noteholders following an Event of Default, other than an Event of Default described in Section 5.01(i) or (ii), unless: (A) the Holders of Notes evidencing 100% of the Note Balance consent thereto, (B) the proceeds of such sale or liquidation will be sufficient to pay in full the Note Balance and all accrued but unpaid interest on the Outstanding Notes or (C) the Indenture Trustee determines that the Trust Estate will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared immediately due and payable, and the Indenture Trustee obtains the consent of the Holders of Notes evidencing not less than [662⁄3]% of the Note Balance of the Controlling Class.  In determining such sufficiency or insufficiency with respect to clauses (B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

 

(b)           If the Indenture Trustee collects any money or property pursuant to this Article as a result of selling or liquidating the Trust Estate, it shall pay out such money or property (together with all Available Collections and all amounts on deposit in the Accounts) on the related Distribution Date or other date fixed pursuant to Section 5.04(c) in the order of priority set forth in Section 2.08(f).

 

(c)           If the Indenture Trustee collects any money or property pursuant to this Section, the Indenture Trustee may fix a record date and distribution date for any payment to Noteholders pursuant to this Section.  At least five days before such record date, the Indenture Trustee shall mail to each Noteholder and the Servicer a notice that states the record date, the distribution date and the amount to be paid.

 

  

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Section 5.05.  Optional Preservation of the Trust Estate.  If the Notes have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of the Trust Estate and continue to apply the proceeds thereof as if there had been no declaration of acceleration; provided, however, that the Available Funds shall be applied in accordance with such declaration of acceleration in the manner specified in Section 2.08(f).  It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Trust Estate.  In determining whether to maintain possession of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

 

Section 5.06.  Limitation of Suits.  No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (i) such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default; (ii) the Holders of Notes evidencing not less than 25% of the Note Balance of the Controlling Class have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder; (iii) such Holder or Holders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in complying with such request; (iv) the Indenture Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and (v) no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Holders of Notes evidencing not less than [51]% of the Note Balance of the Controlling Class.

 

It is understood and intended that no one or more Noteholders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Noteholders or to obtain or to seek to obtain priority or preference over any other Noteholders or to enforce any right under this Indenture, except in the manner herein provided.

 

In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes, each representing less than [51]% of the Note Balance of the Controlling Class, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

 

Section 5.07.  Unconditional Rights of Noteholders to Receive Principal and Interest.  Notwithstanding any other provisions of this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

 

  

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Section 5.08.  Restoration of Rights and Remedies.  If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or such Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.

 

Section 5.09.  Rights and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to the Indenture Trustee or the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 5.10.  Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee or any Noteholder to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Indenture Trustee or the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or the Noteholders, as the case may be.

 

Section 5.11.  Control by Noteholders of the Controlling Class.  The Holders of Notes evidencing not less than [51]% of the Note Balance of the Controlling Class shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided, that:

 

(i)      such direction shall not be in conflict with any rule of law or with this Indenture;

 

(ii)     subject to the terms of Section 5.04, any direction to the Indenture Trustee to sell or liquidate the Trust Estate shall be by Holders of Notes evidencing not less than 100% of the Note Balance;

 

(iii)    if the conditions set forth in Section 5.05 have been satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant to such Section, then any direction to the Indenture Trustee by the Holders of Notes evidencing less than 100% of the Note Balance to sell or liquidate the Trust Estate shall be of no force and effect; and

 

(iv)    the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction.

 

Notwithstanding the rights of Noteholders set forth in this Section, subject to Section 6.01, the Indenture Trustee need not take any action that it determines might involve it in 

 

  

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liability for which it will not be adequately indemnified or might materially adversely affect the rights of any Noteholders not consenting to such action.

 

Section 5.12.  Waiver of Past Defaults.  Prior to the declaration of the acceleration of the maturity of the Notes as provided in Section 5.02, the Holders of Notes evidencing not less than [51]% of the Note Balance of the Controlling Class may, on behalf of all Noteholders, waive any past Default or Event of Default and its consequences except a Default or Event of Default (i) in payment of principal of or interest on any of the Notes or (ii) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Note.  In the case of any such waiver, the Issuer, the Indenture Trustee and Noteholders shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

 

Upon any such waiver, such Default or Event of Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

 

Section 5.13.  Undertaking for Costs.  All parties to this Indenture agree, and each Holder of Note by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, that the provisions of this Section shall not apply to any suit instituted by (i) the Indenture Trustee, (ii) any Noteholder, or group of Noteholders, in each case holding Notes evidencing in the aggregate more than 10% of the Note Balance (or, in the case of any suit which is instituted by the Controlling Class, more than 10% of the Note Balance of the Controlling Class) or (iii) any Noteholder for the enforce­ment of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).

 

Section 5.14.  Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, or plead or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

Section 5.15.  Action on Notes.  The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture.  Neither the Lien of this 

 

  

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Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer.  Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.04(b).

 

Section 5.16.  Performance and Enforcement of Certain Obligations.

 

(a)           Promptly following a request from the Indenture Trustee to do so and at the Administrator’s expense, the Issuer shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Depositor, the Seller and the Servicer of their respective obligations to the Issuer under or in connection with the Sale and Servicing Agreement or by the Seller of its obligations under or in connection with the Receivables Purchase Agreement, in each case in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale and Servicing Agreement or the Receivables Purchase Agreement to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of the Depositor, the Seller or the Servicer thereunder and the institution of legal or administrative actions or Proceedings to compel or secure performance by the Depositor, the Seller and the Servicer of their respective obligations under the Sale and Servicing Agreement or the Seller of its obligations under the Receivables Purchase Agreement.

 

(b)           If an Event of Default has occurred and is continuing, the Indenture Trustee may, and at the direction (which direction shall be in writing or by telephone (confirmed in writing promptly thereafter)) of Holders of Notes evidencing not less than [662⁄3]% of the Note Balance of the Controlling Class shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Depositor, the Seller or the Servicer under or in connection with the Sale and Servicing Agreement or against the Seller under or in connection with the Receivables Purchase Agreement, including the right or power to take any action to compel or secure performance or observance by the Depositor, the Seller or the Servicer, as the case may be, of its obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement or the Receivables Purchase Agreement, as the case may be, and any right of the Issuer to take such action shall be suspended.

 

(c)           If an Event of Default shall have occurred and be continuing, the Indenture Trustee may, and at the direction (which direction shall be in writing or by telephone (confirmed in writing promptly thereafter)) of the Holders of Notes evidencing not less than [662⁄3]% of the Note Balance of the Controlling Class shall, exercise all rights, remedies, powers, privileges and claims of the Depositor against the Seller under or in connection with the Receivables Purchase Agreement, including the right or power to take any action to compel or secure performance or observance by the Seller of its obligations to the Depositor thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Receivables Purchase Agreement, and any right of the Depositor to take such action shall be suspended.

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE SIX

 

THE INDENTURE TRUSTEE

 

Section 6.01.  Duties of Indenture Trustee.

 

(a)           If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)           Except during the continuance of an Event of Default:

 

(i)      the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and

 

(ii)     in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; however, the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

 

(c)           The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(i)      this paragraph does not limit the effect of Section 6.01(b);

 

(ii)     the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Indenture Trustee unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and

 

(iii)    the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.11.

 

(d)           Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to Sections 6.01(a), (b) and (c).

 

(e)           The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.

 

(f)           Money held in trust by the Indenture Trustee need not be segregated from other funds except to the extent required by law or the terms of this Indenture or the other Basic Documents.

 

  

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(g)           No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

 

(h)           Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section and to the provisions of the TIA.

 

Section 6.02.  Rights of Indenture Trustee.

 

(a)           Except as provided by the second succeeding sentence, the Indenture Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper Person.  The Indenture Trustee need not investigate any fact or matter stated in the document.  Notwithstanding the foregoing, the Indenture Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Indenture Trustee that shall be specifically required to be furnished pursuant to any provision of this Indenture, shall examine them to determine whether they comply as to form to the requirements of this Indenture.

 

(b)           Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel.  The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate or Opinion of Counsel.

 

(c)           The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care by it hereunder.

 

(d)           The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

 

(e)           The Indenture Trustee may consult with counsel, and the written advice of such counsel or Opinion of Counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(f)           The Indenture Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Noteholders pursuant to this Indenture, unless such Noteholders shall have offered to the Indenture Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

 

  

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Section 6.03.  Individual Rights of Indenture Trustee.  The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee.  Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights.  The Indenture Trustee must, however, comply with Section 6.11.

 

Section 6.04.  Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be (i) responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, (ii) accountable for the Issuer’s use of the proceeds from the Notes and (iii) responsible for any statement of the Issuer in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Indenture Trustee’s certificate of authentication.

 

Section 6.05.  Notice of Defaults; Notice of Repurchase Requests.

 

(a)           If a Default occurs and is continuing and if it is known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail to each Noteholder notice of such Default within 30 days after it occurs.  Except in the case of a Default in payment of principal of or interest on any Note (including payments pursuant to the redemption provisions of such Note), the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Noteholders.

 

(b)           Not later than the fifth day of each October, January, April and July (or, if such day is not a Business Day, the immediately following Business Day), beginning [____], [____], the Indenture Trustee shall provide to the Administrator a notice in substantially the form of Exhibit B with respect to any requests received by a Responsible Officer of the Indenture Trustee from a Noteholder during the immediately preceding calendar quarter (or, in the case of the initial notice, since the Closing Date) that any Receivable be repurchased by the Seller pursuant to Section 2.05 of the Sale and Servicing Agreement or Section 3.03(c) of the Receivables Purchase Agreement.

 

Section 6.06.  Reports and Documents by Indenture Trustee to Noteholders.  On or prior to each Distribution Date, the Indenture Trustee shall deliver or make available on its website (www.____________) to each Noteholder a copy of each Investor Report delivered to it pursuant to Section 3.10 of the Sale and Servicing Agreement.  The Indenture Trustee shall make available electronically, within a reasonable period of time after the end of each calendar year, to each Person who at any time during such calendar year was a Noteholder, such information furnished to the Indenture Trustee as may be required to enable such Person to prepare its federal and State income tax returns.  The Indenture Trustee shall provide to each Noteholder upon request, copies of the Basic Documents, the report regarding the Servicer’s compliance and the accountants’ attestation delivered pursuant to Section 3.12 of the Sale and Servicing Agreement.

 

Section 6.07.  Compensation and Indemnity.

 

(a)           The Issuer shall, or shall cause the Administrator to, pay to the Indenture Trustee from time to time reasonable compensation for its services pursuant to a fee agreement between the Administrator and the Indenture Trustee.  The Indenture Trustee’s compensation shall not be 

 

  

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limited by any law on compensation of a trustee of an express trust.  The Issuer shall, or shall cause the Administrator to, reimburse the Indenture Trustee for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by it, including costs of collection, in addition to the compensation for its services.  Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts.  The Issuer shall, or shall cause the Administrator to, indemnify and hold harmless the Indenture Trustee and its officers, directors, employees, representatives and agents against any and all loss, liability, tax (other than taxes based on the income of the Indenture Trustee) or expense (including attorneys’ fees) of whatever kind or nature regardless of their merit directly or indirectly incurred by it or them without willful misconduct, negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the transactions contemplated by this Indenture, including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties under this Indenture or under any of the other Basic Documents.  The Indenture Trustee shall notify the Issuer and the Administrator promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee to so notify the Issuer and the Administrator shall not relieve the Issuer or the Administrator of its obligations hereunder.  The Issuer shall cause the Administrator to, defend any such claim, and the Indenture Trustee may have separate counsel and the Issuer shall, or shall cause the Administrator to, pay the fees and expenses of such counsel.  Neither the Issuer nor the Administrator need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith.

 

(b)           The Issuer’s payment obligations to the Indenture Trustee pursuant to this Section shall survive the discharge of this Indenture.  When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.01(v) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Code or any other applicable Insolvency Law.

 

Section 6.08.  Replacement of Indenture Trustee.

 

(a)           No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section.  The Indenture Trustee may resign at any time by so notifying the Issuer, the Depositor and the Noteholders, and will provide all information reasonably requested by the Depositor in order to comply with its reporting obligation under Item 6.02 of Form 8-K under the Exchange Act, with respect to the resignation of the Indenture Trustee.  The Holders of Notes evidencing not less than [51]% of the Note Balance of the Notes may remove the Indenture Trustee without cause by notifying the Indenture Trustee (with a copy to the Issuer, the Depositor and the Rating Agencies) of such removal and, following such removal, may appoint a successor Indenture Trustee.  The Issuer shall remove the Indenture Trustee if (i) the Indenture Trustee fails to comply with Section 6.11, (ii) the Indenture Trustee is adjudged to be bankrupt or insolvent, (iii) a receiver or other public officer takes charge of the Indenture Trustee or its property or (iv) the Indenture Trustee otherwise becomes incapable of acting.

 

  

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(b)           The Depositor may remove the Indenture Trustee if the Indenture Trustee fails to comply with Section 3.07(e), 6.08 or 6.09 with respect to notice to or providing information to the Depositor, or with Article Nine of the Sale and Servicing Agreement, in each case if such failure continues for the lesser of ten days or such period in which the applicable Exchange Act Report can be timely filed (without taking into account any extensions).

 

(c)           If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Administrator shall promptly appoint a successor Indenture Trustee and notify the Depositor of such appointment.  Any successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee, the Issuer and the Depositor and shall also provide all information reasonably requested by the Depositor in order to comply with its reporting obligation under the Exchange Act with respect to the replacement Indenture Trustee.  Upon delivery of such written acceptance, the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture.  The successor Indenture Trustee shall mail a notice of its succession to the Noteholders.  The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

 

(d)           If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Holders of Notes evidencing not less than [51]% of the Note Balance of the Controlling Class may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.  If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

 

(e)           Any resignation or removal of the Indenture Trustee and appointment of a successor Indenture Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Indenture Trustee pursuant to this Section and payment of all fees and expenses owed to the outgoing Indenture Trustee.  Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s and the Administrator’s obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.

 

Section 6.09.  Successor Indenture Trustee by Merger.

 

(a)           If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association, without any further act, shall be the successor Indenture Trustee; provided, that such corporation or banking association must be otherwise qualified and eligible under Section 6.11.  The Indenture Trustee shall provide the Depositor, the Servicer and the Rating Agencies prior written notice of any such transaction.

 

  

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(b)           In case at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Indenture Trustee shall have.

 

Section 6.10.  Appointment of Co-Trustee or Separate Trustee.

 

(a)           Notwithstanding any other provision of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver an instrument to appoint one or more Persons to act as a co-trustee or co-trustees, jointly with the Indenture Trustee, or separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the Trust Estate or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.08.

 

(b)           Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

 

(i)      all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee shall not be authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;

 

(ii)     no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

 

(iii)    the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

 

(c)           Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as 

 

  

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if given to each of them.  Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee.  Every such instrument shall be filed with the Indenture Trustee and a copy thereof given to the Administrator.

 

(d)           Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name.  If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

 

Section 6.11.  Eligibility; Disqualification.  The Indenture Trustee shall at all times satisfy the requirements of TIA Section 310(a).  The Indenture Trustee or its parent shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and shall have a long term debt rating of “A” or better by [___] and “A3” or better by [___] or shall otherwise be acceptable to each Rating Agency.  The Indenture Trustee shall comply with TIA Section 310(b).

 

Section 6.12.  Preferential Collection of Claims Against Issuer.  The Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b).  An Indenture Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.

 

Section 6.13.  Representations and Warranties of Indenture Trustee.  The Indenture Trustee hereby makes the following representations and warranties on which the Issuer and the Noteholders shall rely:

 

(i)      the Indenture Trustee is a banking association duly organized, validly existing and in good standing under the laws of the United States;

 

(ii)     the Indenture Trustee has full power, authority and legal right to execute, deliver and perform this Indenture and shall have taken all necessary action to authorize the execution, delivery and performance by it of this Indenture; and

 

(iii)    this Indenture is an enforceable obligation of the Indenture Trustee.

 

Section 6.14.  Furnishing of Documents.  The Indenture Trustee shall furnish to any Noteholder promptly upon receipt of a written request by such Noteholder therefor (at the expense of the related Noteholder), copies of the Basic Documents.

 

Section 6.15.  Encryption.  Notwithstanding anything to the contrary herein, any and all communications (both text and attachments) by or from the Indenture Trustee that the Indenture 

 

  

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Trustee in its sole discretion deems to contain confidential, proprietary, and/or sensitive information may be encrypted or made available at the Indenture Trustee’s website at [_________] on a password protected basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE SEVEN

 

NOTEHOLDERS’ LISTS AND REPORTS

 

Section 7.01.  Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.  The Issuer shall furnish or cause to be furnished to the Indenture Trustee (i) not more than five days after each Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Noteholders as of such Record Date and (ii) at such other times as the Indenture Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than ten days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar or the Notes are issued as Book-Entry Notes, no such list shall be required to be furnished.

 

Section 7.02.  Preservation of Information; Communications, Reports and CertainDocuments to Noteholders.

 

(a)           The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Noteholders contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of Noteholders received by the Indenture Trustee in its capacity as Note Registrar.  The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.

 

(b)           Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes.

 

(c)           The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of TIA Section 312(c).

 

Section 7.03.  Reports by Issuer.

 

(a)           The Issuer shall:

 

(i)      file with the Indenture Trustee, within 15 days after the Issuer is required to file the same with the Commission, copies of the annual reports and the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Issuer may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

 

(ii)     file with the Indenture Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

 

  

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(iii)    supply to the Indenture Trustee (and the Indenture Trustee shall mail to all Noteholders described in TIA Section 313(c)) such summaries of any informa­tion, documents and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and by the rules and regulations prescribed from time to time by the Commission.

 

(b)           Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year.

 

Section 7.04.  Reports by Indenture Trustee.

 

(a)           If required by TIA Section 313(a), within 60 days after (i) June 30, [____] and (ii) each [____] beginning with [____], [____], the Indenture Trustee shall mail to each Noteholder as required by TIA Section 313(c), a brief report dated as of such date that complies with TIA Section 313(a).  The Indenture Trustee shall also comply with TIA Section 313(b).

 

(b)           The Indenture Trustee shall provide to the Administrator and the Servicer, to be filed by the Administrator or the Servicer with the Commission and each stock exchange, if any, on which the Notes are listed, a copy of each report mailed to Noteholders pursuant to this Indenture.  The Issuer shall notify the Indenture Trustee if and when the Notes are listed on any stock exchange.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE EIGHT

 

ACCOUNTS, DISBURSEMENTS AND RELEASES

 

Section 8.01.  Collection of Money.  Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture and the Sale and Servicing Agreement.  The Indenture Trustee shall apply all such money received by it as provided in this Indenture and the Sale and Servicing Agreement.  Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings.  Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article Five.

 

Section 8.02.  Accounts.

 

(a)           On or before the Closing Date, the Issuer shall cause the Servicer to establish and maintain, at an Eligible Institution, which shall initially be the Indenture Trustee, in the name of the Indenture Trustee, for the benefit of the Securityholders, the Collection Account as provided in Section 4.01(a) of the Sale and Servicing Agreement.  On or before each Distribution Date, the Servicer shall deposit in the Collection Account all amounts required to be deposited therein with respect to the preceding Collection Period as provided in Sections 4.04 and 4.07 of the Sale and Servicing Agreement.  On each Distribution Date, the Indenture Trustee shall apply or cause to be applied the amount on deposit in the Collection Account on such Distribution Date in accordance with Section 2.08(a) (or following the acceleration of the Notes after the occurrence of an Event of Default, in accordance with Section 2.08(f)).

 

(b)           On or before the Closing Date, the Issuer shall cause the Servicer to establish and maintain, at an Eligible Institution, which shall initially be the Indenture Trustee, in the name of the Indenture Trustee, for the benefit of the Securityholders, the Reserve Fund as provided in Sections 4.01 and 4.02 of the Sale and Servicing Agreement.  On or before each Distribution Date, upon receipt of instructions from the Servicer pursuant to Section 4.08(c) of the Sale and Servicing Agreement, the Indenture Trustee, directly or through the Paying Agent, shall withdraw or cause to be withdrawn from the Reserve Fund and deposit in the Collection Account, the Reserve Fund Draw Amount, if any, for such Distribution Date.

 

(c)           On or before the Closing Date, the Issuer shall cause the Servicer to establish and maintain, at an Eligible Institution, which shall initially be the Indenture Trustee, in the name of the Indenture Trustee, for the benefit of the Noteholders, the Note Payment Account as provided in Section 4.01(a) of the Sale and Servicing Agreement.  On each Distribution Date, the Indenture Trustee shall, directly or through the Paying Agent, apply or cause to be applied the amount on deposit in the Note Payment Account on such Distribution Date in accordance with Section 2.08.

 

  

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Section 8.03.  General Provisions Regarding Accounts.

 

(a)           For so long as no Default or Event of Default shall have occurred and be continuing, all or a portion of the funds in the Accounts shall be invested by the Servicer or the Indenture Trustee at the written direction of the Servicer, as applicable, in Eligible Investments as provided in Sections 4.01 of the Sale and Servicing Agreement.  All income or other gain (net of losses and investment expenses) from investments of monies deposited in the Accounts shall be withdrawn (or caused to be withdrawn) by the Indenture Trustee, from such accounts and distributed (but only under the circumstances set forth in the Sale and Servicing Agreement) as provided in Sections 4.01, 4.02, 4.05, 4.06, 4.07 and 4.08 of the Sale and Servicing Agreement.  The Servicer shall not and shall not direct the Indenture Trustee to make any investment of any funds or to sell any investment held in any of the Accounts unless the security interest granted and perfected in such account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Indenture Trustee to make any such investment or sale, if requested by the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.

 

(b)           Subject to Section 6.01(c), the Indenture Trustee will not be liable by reason of any insufficiency in any of the Accounts resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustee’s failure to make payments on such Eligible Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee.

 

(c)           If the Indenture Trustee is the entity maintaining the Accounts and (i) the Servicer shall have failed to give investment directions for any funds on deposit in the Accounts to the Indenture Trustee by _:00 p.m., New York City time (or such other time as may be agreed upon by the Issuer and the Indenture Trustee), on the Business Day preceding the day such investment will be made, (ii) to the knowledge of an Authorized Officer of the Indenture Trustee, a Default or Event of Default shall have occurred and be continuing but the Notes shall not have been declared due and payable pursuant to Section 5.02 or (iii) if the Notes shall have been declared due and payable following an Event of Default but amounts collected or receivable from the Trust Estate are being applied in accordance with Section 5.05 as if there had not been such a declaration, then the Indenture Trustee upon actual knowledge by a Responsible Officer of the Indenture Trustee of such event shall, to the fullest extent practicable, invest and reinvest funds in the Accounts in the one or more investments described in clause (vii) of the definition of the term “Eligible Investments”.

 

Section 8.04.  Release of Trust Estate.

 

(a)           Subject to the payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the Lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture.  No party relying upon an instrument executed by the Indenture Trustee as provided in this Article shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.

 

  

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(b)           The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums due to the Indenture Trustee pursuant to Section 6.07 have been paid in full, release any remaining portion of the Trust Estate that secured the Notes from the Lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds then on deposit in the Accounts.  The Indenture Trustee shall release property from the Lien of this Indenture pursuant to this Section only upon receipt of an Issuer Request accompanied by an Officer’s Certificate and an Opinion of Counsel and, if required by the TIA or Section 11.01, Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1), and otherwise in accordance with the applicable requirements of Section 11.01.

 

Section 8.05.  Opinion of Counsel.  The Indenture Trustee shall receive at least seven days’ notice when requested by the Issuer to take any action pursuant to Section 8.04(a), accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, except in connection with any action contemplated by Section 8.04(b), as a condition to such action, an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete such action, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders in contravention of the provisions of this Indenture; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Estate.  Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE NINE

 

SUPPLEMENTAL INDENTURES

 

Section 9.01.  Supplemental Indentures Without Consent of Noteholders.

 

(a)           The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, without the consent of any Holders of any Notes but with prior written notice to the Rating Agencies, at any time and from time to time, enter into one or more indentures supplemental hereto, in form satisfactory to the Indenture Trustee, for any of the following purposes:

 

(i)      to correct or amplify the description of any property at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the Lien of this Indenture, or to subject to the Lien of this Indenture additional property;

 

(ii)     to evidence the succession, in compliance with the applicable provisions hereof, of another Person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes contained;

 

(iii)    to add to the covenants of the Issuer, for the benefit of the Noteholders, or to surrender any right or power herein conferred upon the Issuer;

 

(iv)    to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee;

 

(v)     to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture or in any (i) offering document used in connection with the initial offer and sale of the Notes or to add any provisions to or change in any manner or eliminate any of the provisions of this Indenture which will not be inconsistent with other provisions of this Indenture or (ii) other Basic Document with respect to matters or questions arising under this Indenture or in any supplemental indenture;

 

(vi)    to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Notes and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article Six; or

 

(vii)   to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA or the rules and regulations of the Commission;

 

provided, however, that no such supplemental indenture (i) may materially adversely affect the interests of any Noteholder and (ii) will be permitted unless an Opinion of Counsel is delivered to the Indenture Trustee to the effect that such supplemental indenture will not cause the Issuer to 

 

  

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be characterized for federal income tax purposes as an association or publicly traded partnership taxable as a corporation or otherwise have any material adverse impact on the federal income taxation of any Notes Outstanding or any Noteholder.  The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained. In addition, any supplement which affects the Owner Trustee shall require the Owner Trustee's written consent.

 

(b)           A supplemental indenture shall be deemed not to materially adversely affect the interests of any Noteholder if the Person requesting such supplemental indenture (i) has delivered no fewer than ten days’ prior written notice of such supplemental indenture to each Rating Agency and (ii) obtains and delivers to the Indenture Trustee an Opinion of Counsel to the effect that the supplemental indenture would not materially adversely affect the interests of any Noteholder.

 

Section 9.02.  Supplemental Indentures with Consent of Noteholders.  The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, with the consent of the Holders of Notes evidencing not less than [51]% of the Note Balance of the Controlling Class and with prior written notice to the Rating Agencies, by Act of such Holders delivered to the Issuer and the Indenture Trustee, at any time and from time to time enter into one or more indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that (i) the Rating Agency Condition shall have been satisfied with respect such action and (ii) no such supplemental indenture will be permitted unless an Opinion of Counsel is delivered to the Indenture Trustee to the effect that such supplemental indenture will not cause the Issuer to be characterized for federal income tax purposes as an association or publicly traded partnership taxable as a corporation or otherwise have any material adverse impact on the federal income taxation of any Notes Outstanding or any Noteholder; and, provided further, that no such supplemental indenture may, without the consent of the Holder of each Outstanding Note, to the extent any such Person is materially and adversely affected by such supplemental indenture:

 

(i)      change any Final Scheduled Distribution Date or the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the Interest Rate applicable thereto or the Redemption Price with respect thereto, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article Five, to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);

 

(ii)     reduce the percentage of the Note Balance or the Note Balance of the Controlling Class, the consent of the Holders of Notes of which is required for any such supplemental indenture, or the consent of the Holders of Notes of which is required for 

 

  

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any waiver of compliance with certain provisions of hereunder or certain defaults and their consequences provided for in this Indenture;

 

(iii)    modify or alter (A) the provisions of the proviso to the definition of the term “Outstanding”, (B) the definition of the term “Note Balance” or (C) the definition of the term “Controlling Class”;

 

(iv)    reduce the percentage of the Note Balance required to direct the Indenture Trustee to sell or liquidate the Trust Estate pursuant to Section 5.04 if the proceeds of such sale or liquidation would be insufficient to pay in full the principal amount of and accrued but unpaid interest on the Notes;

 

(v)     reduce the percentage of the Note Balance of the Controlling Class the consent of the Holders of Notes of which is required for any such supplemental indenture amending the provisions of this Indenture which specify the applicable percentage of the Note Balance of the Controlling Class the consent of which is required for such supplemental indenture or the amendment of any other Basic Document;

 

(vi)    modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the other Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;

 

(vii)   modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Distribution Date (including the calculation of any of the individual components of such calculation) or to affect the rights of the Holders of Notes to the benefit of any provisions for the mandatory redemption of the Notes contained herein;

 

(viii)  permit the creation of any Lien ranking prior to or on a parity with the Lien of this Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein, terminate the Lien of this Indenture on any property at any time subject hereto or deprive the Noteholders of the security provided by the Lien of this Indenture; or

 

(ix)     impair the right to institute suit for the enforcement of payment as provided in Section 5.07.

 

In addition, any supplement which affects the Owner Trustee shall require the Owner Trustee's written consent.

 

The Indenture Trustee may in its discretion determine whether or not any Notes would be affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder.  The Indenture Trustee shall not be liable for any such determination made in good faith.

 

It shall not be necessary for any Act of Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

 

  

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Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Noteholders to which such supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture.  Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

Section 9.03.  Execution of Supplemental Indentures.  In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent in this Indenture to the execution and delivery of such supplemental indenture have been satisfied.  The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s rights, duties, liabilities or immunities under this Indenture or otherwise.  Any supplemental indenture that affects the Owner Trustee’s rights, duties, liabilities or immunities under this Indenture or otherwise shall require the written consent of the Owner Trustee.

 

Section 9.04.  Effect of Supplemental Indenture.  Upon the execution of any supple­mental indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the Noteholders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

Section 9.05.  Conformity with Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA.

 

Section 9.06.  Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture.  If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

 

 

 

 

 

 

 

  

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ARTICLE TEN

 

REDEMPTION OF NOTES

 

Section 10.01.  Redemption.  The Notes are subject to redemption in whole, but not in part, at the direction of the Servicer pursuant to Section 8.01 of the Sale and Servicing Agreement, on any Distribution Date on which the Servicer exercises its option to purchase the assets of the Issuer pursuant to said Section, and the amount paid by the Servicer shall be treated as collections in respect of the Receivables and applied to pay all amounts due to the Servicer under the Sale and Servicing Agreement, the Total Trustee Fees and the unpaid principal amount of the Notes plus accrued and unpaid interest thereon.  The Servicer or the Issuer shall furnish each Rating Agency notice of such redemption.  If the Notes are to be redeemed pursuant to this Section, the Servicer shall furnish notice of such redemption to the Indenture Trustee, the Depositor and the Rating Agencies, not fewer than ten nor more than 30 days prior to the Redemption Date and the Issuer will, or will cause the Servicer to, irrevocably deposit, by _:00 p.m., New York City time, on the Business Day prior to the Redemption Date, with the Indenture Trustee in the Collection Account the Redemption Price of the Notes to be redeemed (all or a portion of which deposit may be made from Available Funds), whereupon all such Notes shall be due and payable on the Redemption Date upon the furnishing of a notice complying with Section 10.02 to each Noteholder.

 

Section 10.02.  Form of Redemption Notice.  Notice of redemption under Section 10.01 shall be given by the Indenture Trustee by first-class mail, postage prepaid, or by facsimile and mailed or transmitted not later than 10 days prior to the applicable Redemption Date to each Holder of Notes, as of the close of business on the Record Date preceding the applicable Redemption Date, at such Noteholder’s address or facsimile number appearing in the Note Register.

 

All notices of redemption shall state:

 

(i)      the Redemption Date;

 

(ii)     the Redemption Price;

 

(iii)    the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided in Section 3.02); and

 

(iv)    that on the Redemption Date, the Redemption Price will become due and payable upon each Note and that interest thereon shall cease to accrue from and after the Redemption Date.

 

Notice of redemption of the Notes shall be given by the Indenture Trustee in the name and at the expense of the Issuer.  Failure to give notice of redemption, or any defect therein, to any Noteholder shall not impair or affect the validity of the redemption of any other Note.

 

Section 10.03.  Notes Payable on Redemption Date.  The Notes to be redeemed shall, following notice of redemption as required by Section 10.02, on the Redemption Date become due and payable at the Redemption Price and (unless the Issuer shall default in the payment of 

 

  

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the Redemption Price) no interest shall accrue on the Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Price.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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ARTICLE ELEVEN

 

MISCELLANEOUS

 

Section 11.01.  Compliance Certificates and Opinions, etc.

 

(a)           Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) if required by Section 11.01(b)(ii) or the TIA, an Independent Certificate, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(i)      a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

 

(ii)     a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(iii)    a statement that, in the opinion of each signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(iv)    a statement as to whether, in the opinion of each signatory, such condition or covenant has been complied with.

 

(b)           (i)           Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the Lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or elsewhere in this Indenture, deliver to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each individual signing such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the Collateral or other property or securities to be so deposited.

 

(ii)     Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the Issuer of the property or securities to be so deposited and of all other such securities made the basis of 

 

  

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any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates furnished pursuant to clause (i) above and this clause (ii), is 10% or more of the Note Balance, but such a certificate need not be furnished with respect to any property or securities so deposited, if the fair value thereof to the Issuer as set forth in the related Officer’s Certificate is less than $25,000 or less than 1% of the Note Balance.

 

(iii)      Other than with respect to any release described in clause (A) or (B) of Section 11.01(b)(v), whenever any property or securities are to be released from the Lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

 

(iv)     Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property (other than property described in clauses (A) or (B) of Section 11.01(b)(v)) released from the Lien of this Indenture since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10% or more of the Note Balance, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer’s Certificate is less than $25,000 or less than 1% of the Note Balance at the time of such release.

 

(v)      Notwithstanding Section 2.13 or any other provision of this Section, the Issuer may, without compliance with the requirements of the other provisions of this Section, (A) collect, liquidate, sell or otherwise dispose of Receivables and Financed Vehicles as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Accounts as and to the extent permitted or required by the Basic Documents.

 

Section 11.02.  Form of Documents Delivered to Indenture Trustee.

 

(a)           In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

(b)           Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such Officer’s 

 

  

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Certificate or opinion is based are erroneous.  Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Seller, the Servicer, the Depositor, the Issuer or the Administrator, stating that the information with respect to such factual matters is in the possession of the Seller, the Servicer, the Depositor, the Issuer or the Administrator, unless such Authorized Officer or counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

 

(c)           Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

(d)           Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report.  The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article Six.

 

Section 11.03.  Acts of Noteholders.

 

(a)           Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section.

 

(b)           The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.

 

(c)           The ownership of Notes shall be proved by the Note Register.

 

(d)           Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind the Holder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

 

  

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Section 11.04.  Notices, etc., to Indenture Trustee, Issuer, Depositor and Rating Agencies.  Unless otherwise specified in this Indenture, all notices, requests, demands, consents, waivers, Act of Noteholders or other communications to or from the parties to this Indenture will be in writing.  Notices, requests, demands, consents and other communications will be deemed to have been given and made, (i) upon delivery or, in the case of a letter mailed via registered first class mail, postage prepaid, three days after deposit in the mail and (ii) in the case of (a) a facsimile, when receipt is confirmed by telephone or by reply e-mail or reply facsimile from the recipient, (b) an e-mail, when receipt is confirmed by telephone or by reply e-mail from the recipient and (c) an electronic posting to a password-protected website, upon printed confirmation of the recipient’s access to such password-protected website, or when notification of such electronic posting is confirmed in accordance with clauses (ii)(b) and (ii)(c) above.  Unless otherwise specified in this Indenture, any such notice, request, demand, consent or other communication will be delivered or addressed, in the case of (i) the Indenture Trustee by any Noteholder or by the Issuer at the Corporate Trust Office, Attention: [________]  (e-mail: [________], telecopier: [________]), (ii) the Issuer by the Indenture Trustee or by any Noteholder at Mercedes-Benz Auto Receivables Trust 201[_]-[_], c/o [________], Wilmington, Delaware  19890 (telecopier no. [________]) , Attention: Corporate Trust Administration (e-mail: [________] with a copy to the Administrator at Mercedes-Benz Financial Services USA LLC, 36455 Corporate Drive, Farmington Hills, Michigan  48331 (telecopier no. [________]), Attention: [________] (e-mail: [________]), (iii) the Representative by the Issuer or by the Indenture Trustee at the address of the Representative set forth in the Underwriting Agreement, (iv) to each Rating Agency, as applicable, by the Issuer, the Indenture Trustee or the Owner Trustee, in the case of (a) [__________________________________] and (b) [________], at [_______________________________________ and (v) as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

 

Section 11.05.  Notices to Noteholders; Waiver.  Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by first-class mail, postage prepaid to each Noteholder affected by such event, at such Noteholder’s address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.  In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

 

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

 

  

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Where this Indenture provides for notice to any Rating Agency, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a Default or Event of Default.

 

Section 11.06.  Alternate Payment and Notice Provisions.  Notwithstanding any provision of this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement with any Noteholder providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to such Noteholder, that is different from the methods provided for in this Indenture for such payments or notices.  The Issuer will furnish to the Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with such agreements.

 

Section 11.07.  Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

 

The provisions of TIA Sections 310 through 317 that impose duties on any Person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

 

Section 11.08.  Effect of Headings and Table of Contents.  The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 11.09.  Successors and Assigns.  All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents.

 

Section 11.10.  Severability.  In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Indenture and the Notes shall not in any way be affected or impaired thereby.

 

Section 11.11.  Benefits of Indenture; Third Party Beneficiaries.  Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Owner Trustee, the Noteholders (and, with respect to Sections 5.04 and 2.08, the Certificateholders), any other party secured hereunder and any other Person with an ownership interest in any part of the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 11.12.  Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and except as otherwise provided in the Basic Documents, no interest shall accrue for the period from and after any such nominal date.

 

  

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Section 11.13.  GOVERNING LAW.  THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 11.14.  Counterparts.  This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

Section 11.15.  Recording of Indenture.  If this Indenture is subject to recording in any appropriate public recording offices, such recording shall be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

 

Section 11.16.  Trust Obligation.  Except as otherwise provided in Section 3.07(e), no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee, except as otherwise provided in Section 3.07(e), and the Owner Trustee have no such obligations in their individual capacities) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by Applicable Law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.  For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles Six, Seven and Eight of the Trust Agreement.

 

Section 11.17.  No Petition.  The Indenture Trustee, by entering into this Indenture, and each Noteholder or Note Owner, by accepting a Note or a beneficial interest therein, as the case may be, hereby covenant and agree that they will not at any time institute against the Issuer or the Depositor, or join in any institution against the Issuer or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings, or other Proceedings under any Insolvency Law in connection with any obligations relating to the Notes or any Basic Document and agrees that it will not cooperate with or encourage others to file a bankruptcy petition against the Issuer or the Depositor during the same period.

 

  

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Section 11.18.  No Recourse.  The Notes represent obligations of the Issuer only and do not represent an interest in or obligations of the Servicer, the Depositor or any of their respective Affiliates, and no recourse may be had against such parties or their assets, except as may be set forth in this Indenture and the other Basic Documents.  Each Noteholder, by acceptance of a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith against (i) either Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of either Trustee in its individual capacity or any holder of a beneficial interest in the Issuer, either Trustee or of any successor or assign of either Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

 

Section 11.19.  Inspection.  The Issuer shall, with reasonable prior notice, permit any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees, and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested.  The Indenture Trustee shall and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder.

 

Section 11.20.  Subordination Agreement.  Each Noteholder, by accepting a Note or a beneficial interest therein, hereby covenants and agrees that, to the extent it is deemed to have any interest in any assets of the Depositor, or a securitization vehicle (other than the Issuer) related to the Depositor, dedicated to other debt obligations of the Depositor or debt obligations of any other securitization vehicle (other than the Issuer) related to the Depositor, its interest in those assets is subordinate to claims or rights of such other debtholders to those other assets.  Furthermore, each Noteholder, by accepting a Note, hereby covenants and agrees that such agreement constitutes a subordination agreement for purposes of Section 510(a) of the Bankruptcy Code.

 

Section 11.21.  Security Interest Matters.

 

(a)           This Indenture creates a valid and continuing “security interest” (as defined in the UCC) in the Receivables in favor of the Indenture Trustee, which security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Issuer.  With respect to each Receivable, the Issuer has taken all steps necessary to perfect its security interest against the related Obligor in the related Financed Vehicle.

 

(b)           The Receivables constitute “tangible chattel paper” (as defined in the UCC).  The Issuer has caused or will cause on or prior to the Closing Date the filing of all appropriate 

 

  

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financing statements in the proper filing offices in the appropriate jurisdictions under Applicable Law necessary to perfect the security interest in the Receivables granted to the Indenture Trustee hereunder.  Other than the security interest granted to the Indenture Trustee hereunder, the Issuer has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Receivables.  The Issuer has not authorized the filing of and is not aware of any financing statements against the Issuer that include a description of collateral covering the Receivables other than any financing statement relating to the security interest granted to the Indenture Trustee hereunder or that has been terminated.  The motor vehicle installment sales contracts and installment loans that constitute or evidence the Receivables do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Depositor, the Issuer or the Indenture Trustee.  The Issuer is not aware of any judgment or tax Lien filings against the Issuer.

 

(c)           All financing statements filed or to be filed against the Issuer in favor of the Indenture Trustee contain a statement substantially to the following effect: “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Indenture Trustee”.

 

Section 11.22.  Representations and Warranties as to Security Interests.  The Issuer represents and warrants to the Indenture Trustee as of the Closing Date:

 

(a)      This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables in favor of the Indenture Trustee, which security interest is prior to all other Liens, and is enforceable as such against creditors of and purchasers from the Issuer.

 

(b)      The Issuer has taken all steps necessary to perfect its security interest against the Obligor in the Financed Vehicles.

 

(c)       The Receivables constitute “tangible chattel paper” within the meaning of the applicable UCC.

 

(d)       The Issuer owns and has good and marketable title to the Receivables free and clear of any Lien, claim or encumbrance of any Person.

 

(e)        All original executed copies of each loan agreement and installment sales contract that constitute or evidence the Receivables have been delivered to the Servicer, as custodian for the Indenture Trustee.

 

(f)         The Issuer has received a written acknowledgment from the Servicer that the Servicer is holding the loan agreements and installment sales contracts that constitute or evidence the Receivables solely on behalf and for the benefit of the Indenture Trustee.

 

(g)        Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables.  The Issuer has not authorized the filing of and is not aware of any financing statements against the Indenture Trustee that include a description of collateral covering the Receivables other than any financing statement 

 

  

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relating to the security interest granted to the Indenture Trustee hereunder or that has been terminated.  The Issuer is not aware of any judgment or tax lien filings against the Issuer.

 

(h)           None of the loan agreements or installment sales contracts that constitute or evidence the Receivables has any marks or notations indicating that it has been pledged, assigned, or otherwise conveyed to any Person other than the Indenture Trustee.

 

Notwithstanding the foregoing, the representations and warranties set forth in this Section may not be waived.  The representations and warranties set forth in this Section will survive until this Indenture has been discharged.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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

 

	 	
MERCEDES-BENZ AUTO RECEIVABLES 

TRUST 201[_]-[_],

	 
	 	 	 	 
	
 

	
By: 

	
[_____________________],

	 
	 	 	
not in its individual capacity but solely as 

Owner Trustee

	 
	 	 	 	 
	 	 	 	 

 

	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	

[_____________________],

	 
	 	
not in its individual capacity but solely as Indenture 

Trustee

	 
	 	 	 	 

 

	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 

 

 

  

  

  

 

 

EXHIBIT A

 

FORM OF CLASS [A-1] [A-2] [A-3] [A-4] [B] NOTE

 

THE ACQUISITION OF THE NOTES BY, OR ON BEHALF OF, OR WITH THE ASSETS OF ANY “EMPLOYEE BENEFIT PLAN” SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR ANY “PLAN” SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “INTERNAL REVENUE CODE”), OR ANY ENTITY PART OR ALL OF THE ASSETS OF WHICH CONSTITUTE ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN BY REASON OF DEPARTMENT OF LABOR REGULATION SECTION 2510.3-101 OR OTHERWISE IS PROHIBITED UNLESS SUCH PURCHASE, HOLDING AND SUBSEQUENT DISPOSITION OF THE NOTES WOULD NOT RESULT IN ANY NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR UNDER SECTION 4975 OF THE INTERNAL REVENUE CODE.  EACH BENEFICIAL OWNER OF THIS NOTE WILL BE DEEMED TO HAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET FORTH IN THE INDENTURE.

 

A FIDUCIARY OF A BENEFIT PLAN PURCHASING THE CLASS [A-1] [A-2] [A-3] [A-4] [B] NOTES WITH THE ASSETS OF A BENEFIT PLAN IS DEEMED TO REPRESENT THAT THE PURCHASE OF ONE OR MORE NOTES IS CONSISTENT WITH ITS FIDUCIARY DUTIES UNDER ERISA AND DOES NOT RESULT IN A NONEXEMPT PROHIBITED TRANSACTION AS DEFINED IN SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.

 

ANY TRANSFER, PLEDGE OR OTHER USE OF THIS NOTE FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN, UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUING ENTITY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.).

 

TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANY 

 

  

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PERSON ACQUIRING THIS NOTE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE INDENTURE TRUSTEE.

 

THE FAILURE TO PROVIDE THE ISSUING ENTITY AND THE INDENTURE TRUSTEE WITH THE APPLICABLE U.S. FEDERAL INCOME TAX CERTIFICATIONS (GENERALLY, AN INTERNAL REVENUE SERVICE FORM W-9 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE, OR AN APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE) MAY RESULT IN THE IMPOSITION OF U.S. FEDERAL BACK-UP WITHHOLDING UPON PAYMENTS TO THE HOLDER IN RESPECT OF THIS` NOTE.

 

[FOR CLASS A-2, A-3, A-4, B NOTES] THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1 NOTES [THE CLASS A-2 NOTES, THE CLASS A-3 NOTES, THE CLASS A-4] AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.]

 

	
REGISTERED

	
$___________

	
No. R-______

	
CUSIP NO. ___________

	  	
 ISIN NO. ___________

 

 

MERCEDES-BENZ AUTO RECEIVABLES TRUST 201[_]-[_]

[_____% CLASS A-1] [A-3] [A-4] [B] [FLOATING RATE CLASS A-2] ASSET BACKED NOTE

 

Mercedes-Benz Auto Receivables Trust 201[_]-[_], a statutory trust organized and existing under the laws of the State of Delaware (including any permitted successors and assigns, the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or its registered assigns, the principal sum of ___________________ DOLLARS ($___________), payable on each Payment Date in an amount equal to the result obtained by multiplying (i) a fraction the numerator of which is $___________ and the denominator of which is $___________ by (ii) the aggregate amount, if any, payable to the extent described in the Indenture referred to on the reverse hereof on each Distribution Date; provided, however, that the entire unpaid principal amount of this Note shall be payable on the earlier of _______________, 200__ (the “Class A-1 [A-2] [A-3] [A-4] [B] Final Scheduled Distribution Date”) and the Redemption Date, if any, selected pursuant to the Indenture.  Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Indenture, which also contains rules as to construction that shall be applicable herein.

 

The Issuer will pay interest on this Note at the rate per annum [For Class A-1, A-2. A-4, B Notes: shown above][For Class A-2 Notes for each Interest Period: determined as set forth in the Indenture]  on each Distribution Date (to the extent that such rate does not exceed the maximum rate permitted by Applicable Law) until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Distribution Date (after giving effect to all payments of principal made on such preceding 

 

  

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Distribution Date), or on the Closing Date in the case of the first Distribution Date or if no interest has yet been paid, subject to certain limitations contained in the Indenture.  Interest on this Note will accrue for each Distribution Date from, and including, [For Class A-1 and Class A-2 Notes: the most recent Distribution Date on which interest has been paid (or, in the case of the first Distribution Date or if no interest has yet been paid, from and including the Closing Date), to but excluding such current Distribution Date.  Interest will be computed on the basis of the actual number of days during the related Interest Period divided by 360.]  [For Class A-3, A-4, B Notes: the [__]th day of the prior calendar month (or, in the case of the first Distribution Data or if no interest has yet been paid, from and including the Closing Date), to but excluding the [__]th day of the current calendar month.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.]  The Issuer shall pay interest on overdue installments of interest at the interest rate otherwise applicable thereto to the extent lawful.  Such principal and interest on this Note shall be paid in the manner specified on the reverse hereof.

 

The principal of and interest on this Note are payable in such coin or currency of the United States as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual or facsimile signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

 

 

 

 

 

 

 

 

 

 

 

  

A-3

  

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by an Authorized Officer, as of the date set forth below.

 

	
Date: ____, [____]

	
MERCEDES-BENZ AUTO RECEIVABLES 

TRUST 201[_]-[_]

	 
	 	 	 	 
	
 

	
By: 

	
[__________________________],

	 
	 	 	
not in its individual capacity but solely as 

Owner Trustee under the Trust Agreement

	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	 	Authorized Signatory	 

 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

 

 

	

Date: _____, [____]

	
By: 

	
[_________________________],

	 
	 	 	
not in its individual capacity but solely as Indenture 

Trustee

	 
	 	 	 	 
	 	 	 	 
	 	
By:

	 	 
	 	 	Authorized Signatory	 

 

 

 

 

 

 

 

  

A-4

  

 

 

[REVERSE OF CLASS [A-1] [A-2] [A-3] [A-4] [B] NOTE]

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its [_____% Class [A-1] [A-2] [A-3] [A-4] [B] [Floating Rate Class A-2] Asset Backed Notes (the “Class [___] Notes”), all issued under the Indenture, dated as of [____], 201[_] (the “Indenture”), between the Issuer and [________________], as trustee (the “Indenture Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Noteholders.  The Notes are subject to all terms of the Indenture.

 

The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes (collectively, the “Notes”) are, except as otherwise provided in the Indenture or in the Sale and Servicing Agreement, equally and ratably secured by the Collateral pledged as security therefor as provided in the Indenture.

 

Principal payable on the Class [A-1] [A-2] [A-3] [A-4] [B] Notes will be paid on each Distribution Date in the amount specified in the Indenture and in the Sale and Servicing Agreement.  As described above, the entire unpaid principal amount of this Note will be payable on the earlier of the Class [A-1] [A-2] [A-3] [A-4] [B] Final Scheduled Distribution Date and the Redemption Date, if any, selected pursuant to the Indenture.  Notwithstanding the foregoing, under certain circumstances, the entire unpaid principal amount of the Class [A-1] [A-2] [A-3] [A-4] [B] Notes shall be due and payable following the occurrence and continuance of an Event of Default, if the Indenture Trustee or the Holders of Notes evidencing not less than [51]% of the Note Balance of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Class [A-1] [A-2] [A-3] [A-4] [B] Notes shall be made pro rata to the Class [A-1] [A-2] [A-3] [A-4] [B] Noteholders entitled thereto.

 

Payments of principal and interest on this Note due and payable on each Distribution Date or Redemption Date shall be made by check mailed to the Person whose name appears as the registered Noteholder (or one or more Predecessor Notes) on the Note Register as of the close of business on the related Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Distribution Date or Redemption Date shall be binding upon all future Noteholders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the remaining unpaid principal amount of this Note on a Distribution Date or Redemption Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the registered Noteholder as of the Record Date preceding such Distribution Date or Redemption Date by notice mailed within 30 days of such Distribution Date or Redemption Date and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Corporate Trust Office of the Indenture 

 

  

A-5

  

 

Trustee or at the office of the Indenture Trustee’s agent appointed for such purposes located in The City of New York.

 

As provided in the Indenture, the Notes may be redeemed, in whole but not in part, in the manner and to the extent described in the Indenture and the Sale and Servicing Agreement.

 

As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Noteholder or such Noteholder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, all in accordance with the Exchange Act, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

 

Each Noteholder or Note Owner, by acceptance of a Note or a beneficial interest therein, as the case may be, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Indenture Trustee or the Owner Trustee, each in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Indenture Trustee or the Owner Trustee, each in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee, each in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by Applicable Law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

 

Each Noteholder or Note Owner, by acceptance of a Note or a beneficial interest therein, as the case may be, covenants and agrees by accepting the benefits of the Indenture and such Note that such Noteholder or Note Owner will not at any time institute against the Depositor or the Issuer, or join in any institution against the Depositor or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings under any Insolvency Law in connection with any obligations relating to the Notes, the Certificates, the Indenture or the other Basic Documents.

 

The Issuer has entered into the Indenture and this Note is issued with the intention that, for federal, State and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the Issuer secured by the Trust Estate.  Each Noteholder, by acceptance of a Note (and each Note Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for federal, State and local income, single business and franchise tax purposes as indebtedness of the Issuer.

 

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in 

 

  

A-6

  

 

whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note shall be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Noteholders under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing at least [51]% of the Note Balance of the Controlling Class.  The Indenture also contains provisions permitting the Noteholders representing specified percentages of the Note Balance of the Controlling Class, on behalf of all Noteholders, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Noteholder of this Note (or any one of more Predecessor Notes) shall be conclusive and binding upon such Noteholder and upon all future Noteholders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Issuer and the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Noteholders.

 

The Indenture permits the Issuer, under certain circumstances, to consolidate or merge with or into another Person, subject to the rights of the Indenture Trustee and the Noteholders under the Indenture.

 

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed.

 

 

 

 

 

 

  

A-7

  

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number of assignee:

 

 

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

 

(name and address of assignee)

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

 

attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises.

 

 

	
Dated: _________________________

	
______________________________ *

	  	
Signature Guaranteed:

	  	

______________________________ *

 

 

 

 

 

 

	
*

	
NOTICE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the require­ments of the Note Registrar.

 

 

  

A-8

  

 

EXHIBIT B

 

 

FORM OF REPURCHASE REQUEST NOTICE

 

 

___________, 201_

 

Mercedes-Benz Financial Services USA LLC

36455 Corporate Drive

Farmington Hills, Michigan  48331-3552

Attention:  [____________]

 

	
  

	
Re:

	
Mercedes-Benz Auto Receivables Trust 201[_]-[_] Noteholder Request to Repurchase Receivables

 

Reference is hereby made to the Indenture dated as of [____], 201[_] (the “Indenture”) between Mercedes-Benz Auto Receivables Trust 201[_]-[_], as issuer (the “Issuer”), and [__________________] as indenture trustee (the “Indenture Trustee”).   Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.

 

[During the period from and including ____, 201_ to but excluding  ____, 201_, a Responsible Officer of the Indenture Trustee has not received any requests from Noteholders requesting that Receivables be repurchased by the Seller pursuant to Section 2.05 of the Sale and Servicing Agreement or Section 3.03(c) of the Receivables Purchase Agreement.]

 

[During the period from and including ____, 201_ to but excluding  ____, 201_, a Responsible Officer of the Indenture Trustee received one or more requests from Noteholders requesting that Receivables be repurchased by the Seller pursuant to Section 2.05 of the Sale and Servicing Agreement or Section 3.03(c) of the Receivables Purchase Agreement.  The details of such requests are set forth below:]

 

	
Date of Request

	
Number of Receivables

Subject to Request

	
Aggregate Principal Balance 

of Receivables Subject to 

Request

	  	  	  
	  	  	  
	  	  	  

 

 

 

 

 

 

 

 

 

  

B-1

  

 

	 	
[_________________________], not in its 

individual capacity but solely as Indenture 

Trustee

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

B-2efc12-618_ex101.htm

Exhibit 10.1

MERCEDES-BENZ AUTO RECEIVABLES TRUST 200[_]-[_],

 

as Issuer,

 

DAIMLER RETAIL RECEIVABLES LLC,

 

as Depositor,

 

MERCEDES-BENZ FINANCIAL SERVICES USA LLC,

 

as Seller,

 

and

 

MERCEDES-BENZ FINANCIAL SERVICES USA LLC,

 

as Servicer

_______________________________

 

FORM OF SALE AND SERVICING AGREEMENT

Dated as of [_____], 201[_]

 

________________________________

 

 

  

  

  

 

TABLE OF CONTENTS

 

Page

 

ARTICLE ONE

 

DEFINITIONS

 

	
Section 1.01.

	
Capitalized Terms; Rules of Usage

	
1

 

ARTICLE TWO

 

CONVEYANCE OF TRUST PROPERTY

 

	
Section 2.01.

	
Conveyance of Trust Property.

	
2

	
Section 2.02.

	
Representations and Warranties of the Seller as to the Receivables

	
3

	
Section 2.03.

	
Representations and Warranties of the Depositor as to the Receivables

	
4

	
Section 2.04.

	
Representations and Warranties as to Security Interests

	
4

	
Section 2.05.

	
Repurchase of Receivables Upon Breach

	
5

	
Section 2.06.

	
Custody of Receivable Files.

	
6

	
Section 2.07.

	
Duties of Servicer as Custodian.

	
6

	
Section 2.08.

	
Instructions; Authority to Act

	
7

	
Section 2.09.

	
Indemnification by Custodian

	
7

	
Section 2.10.

	
Effective Period and Termination

	
8

 

ARTICLE THREE

 

ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY

 

	
Section 3.01.

	
Duties of Servicer

	
9

	
Section 3.02.

	
Delegation of Duties; Subservicers.

	
10

	
Section 3.03.

	
Collection of Receivable Payments; Modification of Receivables

	
10

	
Section 3.04.

	
Realization Upon Receivables.

	
11

	
Section 3.05.

	
Maintenance of Physical Damage Insurance Policies

	
12

	
Section 3.06.

	
Maintenance of Security Interests in Financed Vehicles

	
12

	
Section 3.07.

	
Covenants of Servicer

	
12

	
Section 3.08.

	
Purchase of Receivables Upon Breach

	
13

	
Section 3.09.

	
Servicing Compensation; Payment of Certain Expenses by Servicer

	
13

	
Section 3.10.

	
Investor Report

	
13

	
Section 3.11.

	
Annual Statement as to Compliance; Notice of Servicer Termination Events.

	
13

	
Section 3.12.

	
Annual Accountants’ Report.

	
14

	
Section 3.13.

	
Access to Certain Documentation and Information Regarding Receivables

	
15

	
Section 3.14.

	
Reports to the Commission

	
15

 

 

  

i

  

 

 

Page

 

	
Section 3.15.

	
Reports to Rating Agencies

	
15

 

ARTICLE FOUR

 

DISTRIBUTIONS; RESERVE FUND;

 

STATEMENTS TO SECURITYHOLDERS

 

	
Section 4.01.

	
Establishment of Accounts.

	
16

	
Section 4.02.

	
Reserve Fund.

	
17

	
Section 4.03.

	
Monthly Remittance Condition.

	
18

	
Section 4.04.

	
Collections

	
18

	
Section 4.05.

	
Application of Collections

	
18

	
Section 4.06.

	
Advances.

	
19

	
Section 4.07.

	
Additional Deposits.

	
19

	
Section 4.08.

	
Determination Date Calculations; Application of Available Funds.

	
20

	
Section 4.09.

	
Statements to Securityholders

	
21

 

ARTICLE FIVE

 

THE DEPOSITOR

 

	
Section 5.01.

	
Representations and Warranties of Depositor

	
22

	
Section 5.02.

	
Liability of Depositor; Indemnities.

	
23

	
Section 5.03.

	
Merger, Consolidation or Assumption of the Obligations of Depositor

	
25

	
Section 5.04.

	
Limitation on Liability of Depositor and Others

	
25

	
Section 5.05.

	
Depositor Not to Resign

	
25

	
Section 5.06.

	
Depositor May Own Securities

	
25

	
Section 5.07.

	
Covenants of Depositor

	
26

 

ARTICLE SIX

 

THE SERVICER

 

	
Section 6.01.

	
Representations and Warranties of Servicer

	
27

	
Section 6.02.

	
Liability of Servicer; Indemnities

	
28

	
Section 6.03.

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

	
29

	
Section 6.04.

	
Limitation on Liability of Servicer and Others.

	
30

	
Section 6.05.

	
MBFS USA Not to Resign as Servicer

	
30

	
Section 6.06.

	
Servicer May Own Securities

	
30

 

  

ii

  

Page

 

ARTICLE SEVEN

 

SERVICER TERMINATION EVENTS

 

	
Section 7.01.

	
Servicer Termination Events

	
32

	
Section 7.02.

	
Appointment of Successor Servicer

	
33

	
Section 7.03.

	
Effect of Servicing Transfer.

	
34

	
Section 7.04.

	
Notification to Noteholders and Rating Agencies

	
35

	
Section 7.05.

	
Waiver of Past Servicer Termination Events

	
35

	
Section 7.06.

	
Repayment of Advances

	
35

 

ARTICLE EIGHT

 

TERMINATION

 

	
Section 8.01.

	
Optional Purchase of All Receivables.

	
36

	
Section 8.02.

	
Termination

	
36

 

ARTICLE NINE

 

EXCHANGE ACT REPORTING

 

	
Section 9.01.

	
Further Assurances

	
37

	
Section 9.02.

	
Form 10-D Filings

	
37

	
Section 9.03.

	
Form 8-K Filings

	
37

	
Section 9.04.

	
Form 10-K Filings

	
37

	
Section 9.05.

	
Report on Assessment of Compliance and Attestation

	
38

	
Section 9.06.

	
Back-up Sarbanes-Oxley Certification.

	
38

	
Section 9.07.

	
Representations and Warranties

	
39

	
Section 9.08.

	
Indemnification.

	
39

 

ARTICLE TEN

 

MISCELLANEOUS

 

	
Section 10.01.

	
Amendment.

	
41

	
Section 10.02.

	
Protection of Title to Issuer.

	
42

	
Section 10.03.

	
Notices

	
44

	
Section 10.04.

	
Assignment.

	
45

	
Section 10.05.

	
Severability

	
45

	
Section 10.06.

	
Further Assurances

	
45

	
Section 10.07.

	
No Waiver; Cumulative Remedies

	
45

	
Section 10.08.

	
Successors and Assigns; Third-Party Beneficiaries

	
45

 

 

  

iii

  

 

Page

 

	
Section 10.09.

	
Actions by Securityholders.

	
45

	
Section 10.10.

	
Counterparts

	
46

	
Section 10.11.

	
Table of Contents and Headings

	
46

	
Section 10.12.

	
GOVERNING LAW

	
46

	
Section 10.13.

	
No Petition

	
46

	
Section 10.14.

	
No Recourse

	
46

	
Section 10.15.

	
Servicer Payment Obligation

	
46

 

SCHEDULES

 

	
Schedule A

	
Location of Receivable Files

	
SA-1

	
Schedule B

	
Item 1119 Parties

	
SB-1

	
Schedule C

	
Servicing and Disclosures Items

	
SC-1

	
Schedule D

	
Performance Certification (Servicer)

	
SD-1

 

EXHIBITS

 

	
Exhibit A

	
Representations and Warranties as to the Receivables

	
A-1

	
Exhibit B

	
Form of Investor Report

	
B-1

 

APPENDICES

	
Appendix A –

	
Definitions

	
AA-1

 

 

 

iv

 

 

This SALE AND SERVICING AGREEMENT, dated as of [_____], 201[_] (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is among DAIMLER RETAIL RECEIVABLES LLC, a Delaware limited liability company (the “Depositor”), MERCEDES-BENZ FINANCIAL SERVICES USA LLC, a Delaware limited liability company (the “Seller”), MERCEDES-BENZ FINANCIAL SERVICES USA LLC, a Delaware limited liability company (“MBFS USA”), as servicer (in such capacity, the “Servicer”), and MERCEDES-BENZ AUTO RECEIVABLES TRUST 200[_]-[_], a Delaware statutory trust, as issuer (the “Issuer”).

 

WHEREAS, the Issuer desires to purchase from the Depositor a pool of receivables arising in connection with motor vehicle installment sales contracts and installment loans (the “Receivables”) purchased or originated by the Seller in the ordinary course of its business and sold to the Depositor as of the Closing Date;

 

WHEREAS, the Depositor is willing to sell the Receivables to the Issuer pursuant to the terms hereof; and

 

WHEREAS, the Servicer is willing to service the Receivables pursuant to the terms hereof.

 

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

 

ARTICLE ONE

 

DEFINITIONS

 

Section 1.01. Capitalized Terms; Rules of Usage.  Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in Appendix A.  Appendix A also contains rules as to usage applicable to this Agreement.

 

 

 

  

1

  

ARTICLE TWO

 

CONVEYANCE OF TRUST PROPERTY

 

Section 2.01. Conveyance of Trust Property.

 

(a) In consideration of the Issuer’s delivery to or upon the order of the Depositor on the Closing Date of authenticated Notes, in authorized denominations in an aggregate principal amount equal to the Initial Note Balance, and authenticated Certificates, the Depositor hereby irrevocably sells, transfers, assigns and otherwise conveys to the Issuer, without recourse (subject to the obligations of the Depositor set forth herein), all right, title and interest of the Depositor, whether now owned or existing or hereafter acquired or arising, and wheresoever located, in, to and under the following:

 

(i) the Receivables and all amounts due and collected on or in respect of the Receivables (including proceeds of the repurchase of Receivables by the Seller pursuant to Section 2.05 of this Agreement or Section 3.03(c) of the Receivables Purchase Agreement or the purchase of Receivables by the Servicer pursuant to Section 3.03, Section 3.08 or Section 8.01) after the Cutoff Date;

 

(ii) the security interests in the Financed Vehicles granted by the Obligors pursuant to the Receivables and any other interest of the Depositor in such Financed Vehicles;

 

(iii) all proceeds from claims on any physical damage or theft insurance policies and extended warranties covering such Financed Vehicles and any proceeds of any credit life or credit disability insurance policies relating to the Receivables, the related Financed Vehicles or the related Obligors;

 

(iv) the Receivable Files that relate to the Receivables;

 

(v) any proceeds of Dealer Recourse that relate to the Receivables;

 

(vi) the Collection Account, the Note Payment Account, the Reserve Fund and all amounts, securities, Financial Assets, investments and other property deposited in or credited to any of the foregoing and all proceeds thereof;

 

(vii) all rights of the Depositor, but none of the obligations, under the Receivables Purchase Agreement and First-Tier Assignment, including the right to require the Seller to repurchase Receivables from the Issuer;

 

(viii) the right to realize upon any property (including the right to receive future Net Liquidation Proceeds and Recoveries) that shall have secured a Receivable and have been repossessed by or on behalf of the Issuer; and

 

(ix) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing, and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing,

 

 

 

  

2

  

including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all accounts, accounts receivable, general intangibles, chattel paper, documents, money, investment property, deposit accounts, letters of credit, letter of credit rights, insurance proceeds, condemnation awards, notes, drafts, acceptances, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitutes all or part of, or is included in, the proceeds of any of the foregoing.

 

(b) The Depositor and the Issuer intend that the transfer of Trust Property contemplated by Section 2.01(a) constitute a sale of the Trust Property from the Depositor to the Issuer, conveying good title to the Trust Property free and clear of any Liens and, in the event of the filing of a bankruptcy petition by or against the Depositor under any Insolvency Law, that the Trust Property shall not be part of the Depositor’s estate.  However, in the event that any such transfer is deemed to be a pledge, the Depositor hereby grants to the Issuer a first priority security interest in all of the Depositor’s right, title and interest in, to and under such Trust Property, and all proceeds thereof, to secure the payment of the Notes and accrued interest thereon and all other amounts owing under the Basic Documents and in such event, this Agreement shall constitute a security agreement under Applicable Law.

 

(c) The sales, transfers, assignments and conveyances of Trust Property made under this Section shall not constitute, and is not intended to result in, an assumption by the Issuer of any obligation of the Depositor or the Seller to the Obligors or any other Person in connection with the Receivables and the other Trust Property or any obligation of the Depositor or the Seller under any agreement, document or instrument related thereto.

 

Section 2.02. Representations and Warranties of the Seller as to the Receivables.  The Seller has made, under the Receivables Purchase Agreement, each of the representations and warranties as to the Receivables set forth in Exhibit A.  The Issuer shall be deemed to have relied on such representations and warranties in accepting the Receivables.  The representations and warranties set forth in Exhibit A speak as of the date of execution and delivery of this Agreement and as of the Closing Date, except to the extent otherwise provided, but shall survive the sale, transfer, assignment and conveyance of the Receivables to the Issuer pursuant to this Agreement and the pledge of the Receivables to the Indenture Trustee pursuant to the Indenture.  Pursuant to Section 2.01(a), the Depositor has sold, transferred, assigned and otherwise conveyed to the Issuer, as part of the Trust Property, its rights under the Receivables Purchase Agreement, including its right to require the Seller to repurchase Receivables in accordance with the Receivables Purchase Agreement upon a breach of the representations and warranties set forth in Exhibit A.

 

The Seller hereby agrees that the Issuer shall have the right to enforce any and all rights of the Depositor under the Receivables Purchase Agreement assigned to the Issuer under this Agreement, including the right to require the Seller to repurchase Receivables in accordance with the Receivables Purchase Agreement upon a breach of the representations and warranties set forth in Exhibit A, directly against the Seller as though the Issuer were a party to the Receivables Purchase Agreement and that the Issuer shall not be obligated to enforce any such right indirectly through the Depositor.

 

 

 

  

3

  

Section 2.03. Representations and Warranties of the Depositor as to the Receivables.  The Depositor makes the following representations and warranties as to the Receivables on which the Issuer shall be deemed to have relied in accepting the Receivables.  The representations and warranties speak as of the date of execution and delivery of this Agreement and as of the Closing Date, except to the extent otherwise provided, but shall survive the sale, transfer, assignment and conveyance of the Receivables to the Issuer pursuant to this Agreement and the pledge of the Receivables to the Indenture Trustee pursuant to the Indenture.

 

(a) Title.  The Depositor has purchased the Receivables from the Seller.  The Depositor intends that the transfer of the Receivables contemplated by Section 2.01 constitute a sale of the Receivables from the Depositor to the Issuer and that the beneficial interest in, and title to, the Receivables not be part of the Depositor’s estate in the event of the filing of a bankruptcy petition by or against the Depositor under any bankruptcy law.

 

(b) Security Interest Matters.  The Depositor has caused or will cause prior to the Closing Date the filing of all appropriate financing statements in the proper filing offices in the appropriate jurisdictions under Applicable Law necessary to perfect the security interest in the Receivables granted to the Issuer under this Agreement.  The security interest of the Seller in each Financed Vehicle has been validly assigned by the Depositor to the Issuer.

 

(c) Financing Statements.  All financing statements filed or to be filed against the Depositor in favor of the Indenture Trustee (as assignee of the Issuer) contain a statement substantially to the following effect: “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Indenture Trustee”.

 

(d) No Transfer Restrictions.  The Depositor has not created, incurred or suffered to exist any restriction on transferability of the Receivables except for the restrictions on transferability imposed by this Agreement.  The transfer of the Receivables and the Receivable Files by the Depositor to the Issuer pursuant to this Agreement is not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction.

 

Section 2.04. Representations and Warranties as to Security Interests.  The Depositor makes the following representations and warranties as to the Receivables on which the Issuer shall be deemed to have relied in accepting the Receivables.  The representations and warranties speak as of the date of execution and delivery of this Agreement and as of the Closing Date, except to the extent otherwise provided, but shall survive the sale, transfer, assignment and conveyance of the Receivables to the Issuer pursuant to this Agreement and the pledge of the Receivables to the Indenture Trustee pursuant to the Indenture.

 

(a) This Agreement creates a valid and continuing “security interest” (as defined in the applicable UCC) in the Receivables in favor of the Issuer, which security interest is prior to all other Liens, and is enforceable as such against creditors of and purchasers from the Depositor.

 

 

 

  

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(b) The Depositor has taken all steps necessary to perfect its security interest against the Obligor in the Financed Vehicles.

 

(c) The Receivables constitute “tangible chattel paper” within the meaning of the applicable UCC.

 

(d) The Depositor owns and has good and marketable title to the Receivables free and clear of any Lien, claim or encumbrance of any Person.

 

(e) All original executed copies of each loan agreement and installment sales contract that constitute or evidence the Receivables have been delivered to the Servicer, as custodian for the Issuer.

 

(f) The Depositor has received a written acknowledgment from the Servicer that the Servicer is holding the loan agreements and installment sales contracts that constitute or evidence the Receivables solely on behalf and for the benefit of the Issuer.

 

(g) Other than the security interest granted to the Issuer pursuant to this Agreement and the Indenture, the Depositor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables.  The Depositor has not authorized the filing of and is not aware of any financing statements against the Issuer that include a description of collateral covering the Receivables other than any financing statement relating to the security interest granted to the Issuer hereunder or that has been terminated.  The Depositor is not aware of any judgment or tax lien filings against the Depositor.

 

(h) None of the loan agreements or installment sales contracts that constitute or evidence the Receivables has any marks or notations indicating that it has been pledged, assigned, or otherwise conveyed to any Person other than the Issuer.

 

Notwithstanding the foregoing, the representations and warranties set forth in this Section may not be waived.  The representations and warranties set forth in this Section will survive the termination of this Agreement until the Indenture has been discharged.

 

Section 2.05. Repurchase of Receivables Upon Breach.  The Depositor, the Seller, the Servicer or the Owner Trustee, as the case may be, shall inform the other parties to this Agreement and the Indenture Trustee promptly, in writing, upon the discovery of any breach or failure to be true of the representations and warranties set forth in Exhibit A.  If such breach or failure shall not have been cured by the close of business on the last day of the Collection Period which includes the 30th day after the date on which the Seller becomes aware of, or receives written notice from the Depositor, the Servicer or the Owner Trustee of, such breach or failure, and such breach or failure materially and adversely affects the interest of the Issuer in a Receivable, the Seller shall repurchase such Receivable from the Issuer as of the close of business on the last day of such Collection Period.  In consideration of the repurchase of a Receivable hereunder, the Seller shall remit the Purchase Amount of such Receivable on the Deposit Date immediately following such Collection Period in the manner specified in Section 4.07.  The sole remedy of the Issuer, the Trustees and the Securityholders with respect to a breach or failure to be true of the representations and warranties set forth in Exhibit A shall be to require the Seller to

 

 

 

  

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repurchase Receivables pursuant to this Section and Section 3.03(c) of the Receivables Purchase Agreement.  Neither Trustee shall have any duty to conduct an affirmative investigation as to the occurrence of any condition requiring the repurchase of any Receivable pursuant to this Section or the eligibility of any Receivable for purposes of this Agreement.

 

Section 2.06. Custody of Receivable Files.

 

(a) To assure uniform quality in servicing the Receivables and to reduce administrative costs, the Issuer hereby revocably appoints the Servicer as its agent, and the Servicer hereby accepts such appointment, to act as custodian, on behalf of the Issuer and the Indenture Trustee, of the following documents or instruments which are hereby constructively delivered to the Indenture Trustee, as pledgee of the Trust Property pursuant to the Indenture with respect to each Receivable (collectively, a “Receivable File”):

 

(i) the fully executed original of the Receivable;

 

(ii) the original certificate of title for the related Financed Vehicle (or evidence that such certificate of title has been applied for) or such other documents that the Seller or the Servicer shall keep on file, in accordance with its customary practices and procedures, evidencing the security interest of the Seller in such Financed Vehicle;

 

(iii) documents evidencing the commitment of the related Obligor to maintain physical damage insurance covering the related Financed Vehicle; and

 

(iv) any and all other documents (including any computer file or disc or microfiche) that the Seller or the Servicer shall keep on file, in accordance with its customary practices and procedures, relating to the Receivable, the related Obligor or the related Financed Vehicle.

 

(b) On the Closing Date, the Servicer shall deliver an Officer’s Certificate to the Issuer and the Indenture Trustee confirming that the Servicer has received, on behalf of the Issuer and the Indenture Trustee, all the documents and instruments necessary for the Servicer to act as the agent of the Issuer and the Indenture Trustee for the purposes set forth in this Section, including the documents referred to herein, and the Issuer and the Trustees are hereby authorized to rely on such Officer’s Certificate.

 

Section 2.07. Duties of Servicer as Custodian.

 

(a) Safekeeping.  The Servicer, in its capacity as custodian, shall hold the Receivable Files for the benefit of the Issuer and the Indenture Trustee and maintain such accurate and complete accounts, records and computer systems pertaining to each Receivable File as shall enable the Servicer and the Issuer to comply with this Agreement and the Indenture Trustee to comply with the Indenture.  In performing its duties as custodian, the Servicer shall act with reasonable care, using that degree of skill and attention that it exercises with respect to the files of comparable motor vehicle installment sales contracts and installment loans that the Servicer services for itself or others.  The Servicer shall conduct, or cause to be conducted, in accordance with its customary practices and procedures, periodic examinations of the files of all receivables owned or serviced by it which shall include the Receivable Files held by it under this Agreement,

 

 

 

  

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and of the related accounts, records and computer systems, in such a manner as shall enable the Issuer or the Indenture Trustee to verify the accuracy of the Servicer’s record keeping.  The Servicer shall promptly report to the Trustees any failure on its part to hold the Receivable Files and to maintain its accounts, records and computer systems as herein provided and promptly take appropriate action to remedy any such failure.  Nothing herein shall be deemed to require an initial review or any periodic review of the Receivable Files by the Issuer or the Trustees, and none of the Issuer or either Trustee shall be liable or responsible for any action or failure to act by the Servicer in its capacity as custodian hereunder.

 

(b) Maintenance of and Access to Records.  The Servicer shall maintain each Receivable File at one of the locations specified in Schedule A or at such other location as shall be specified to the Issuer and the Indenture Trustee by 30 days’ prior written notice.  The Servicer may temporarily move individual Receivable Files or any portion thereof without notice as necessary to conduct collection and other servicing activities in accordance with its customary practices and procedures.  The Servicer shall make available to the Issuer and the Indenture Trustee or its duly authorized representatives, attorneys or auditors a list of locations of the Receivable Files, the Receivable Files and the related accounts, records and computer systems maintained by the Servicer at such times during normal business hours as the Issuer and the Indenture Trustee shall reasonably request.

 

(c) Release of Documents.  As soon as practicable after receiving written instructions from the Indenture Trustee, the Servicer shall release any document in the Receivable Files to the Indenture Trustee or its agent or designee, as the case may be, at such place or places as the Indenture Trustee may reasonably designate.  The Servicer shall not be responsible for any loss occasioned by the failure of the Indenture Trustee to return any document or any delay in so doing.

 

(d) Title to Receivables.  The Servicer shall not at any time have, or in any way attempt to assert, any interest in any Receivable held by it as custodian hereunder or in the related Receivable File, other than for collecting or enforcing such Receivable for the benefit of the Issuer.  The entire equitable interest in such Receivable and the related Receivable File shall at all times be vested in the Issuer.

 

Section 2.08. Instructions; Authority to Act.  The Servicer shall be deemed to have received proper instructions with respect to the Receivable Files upon its receipt of written instructions signed by a Responsible Officer of the Indenture Trustee.  A certified copy of excerpts of authorizing resolutions of the board of directors of the Indenture Trustee shall constitute conclusive evidence of the authority of any such Responsible Officer to act and shall be considered in full force and effect until receipt by the Servicer of written notice to the contrary given by the Indenture Trustee.

 

Section 2.09. Indemnification by Custodian.  The Servicer, in its capacity as custodian of the Receivable Files, shall indemnify and hold harmless the Issuer, the Trustees and each of their respective officers, directors, employees and agents from and against any and all Expenses that may be imposed on, incurred or asserted against the Issuer, the Trustees and each of their respective officers, directors, employees and agents as the result of any improper act or omission in any way relating to the maintenance and custody of the Receivable Files by the Servicer, as

 

 

 

  

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custodian; provided, however, that the Servicer shall not be liable for any portion of any such Expenses resulting from the willful misfeasance, bad faith or negligence of either Trustee.

 

Section 2.10. Effective Period and Termination.  The 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 Section.  If the Servicer shall resign as Servicer under Section 6.05, or if all of the rights and obligations of the Servicer shall have been terminated under Section 7.01, the appointment of the Servicer as custodian hereunder may be terminated by (i) the Issuer, with the consent of the Indenture Trustee, (ii) Holders of Notes evidencing not less than 25% of the Note Balance of the Controlling Class or, if the Notes have been paid in full, by Certificateholders evidencing not less than 25% of the aggregate Certificate Percentage Interests then outstanding or (iii) the Indenture Trustee, with the consent of Holders of Notes evidencing not less than 25% of the Note Balance of the Controlling Class, in each case by notice then given in writing to the Depositor and the Servicer (with a copy to the Trustees if given by the Noteholders or the Certificateholders).  As soon as practicable after any termination of such appointment, the Servicer shall deliver, or cause to be delivered, the Receivable Files and the related accounts and records maintained by the Servicer to the Indenture Trustee, the Indenture Trustee’s agent or the Indenture Trustee’s designee, as the case may be, at such place as the Indenture Trustee may reasonably designate or, if the Notes have been paid in full, at such place as the Owner Trustee may reasonably designate.

 

 

 

  

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ARTICLE THREE

 

ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY

 

Section 3.01. Duties of Servicer.  The Servicer, acting alone or through one or more subservicers to the extent permitted hereunder, for the benefit of the Issuer, shall manage, service, administer and make collections on the Receivables with reasonable care but in no event less than the care that the Servicer exercises with respect to all comparable motor vehicle installment sales contracts and installment loans that it services for itself or others.  The Servicer’s duties shall include collection and posting of all payments, responding to inquiries of Obligors or by Governmental Authorities with respect to the Receivables, investigating delinquencies, sending payment coupons to Obligors, reporting tax information to Obligors in accordance with its customary practices, policing the collateral, accounting for collections and furnishing monthly and annual statements to the Trustees with respect to distributions, providing collection and repossession services in the event of an Obligor default, generating federal income tax information and performing the other duties specified herein.  The Servicer shall have full power and authority to do any and all things in connection with such managing, servicing, administration and collection that it may deem necessary or desirable, it being understood, however, that the Servicer shall at all times remain responsible to the Issuer and the Indenture Trustee for the performance of its duties and obligations hereunder.  Subject to the foregoing and to Section 3.02, the Servicer shall follow its customary standards, policies, practices and procedures in performing its duties hereunder as Servicer.  Without limiting the generality of the foregoing, the Servicer shall be authorized and empowered to execute and deliver, on behalf of itself, the Depositor, the Issuer, the Trustees, the Securityholders or any of them, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge and all other comparable instruments, with respect to the Receivables and the Financed Vehicles.

 

The Servicer is hereby authorized to commence, in its own name or in the name of the Issuer, a Proceeding to enforce a Receivable pursuant to Section 3.04 or to commence or participate in a Proceeding (including a bankruptcy Proceeding) relating to or involving a Receivable, including a Defaulted Receivable.  If the Servicer commences or participates in such a Proceeding in its own name, the Issuer shall thereupon be deemed to have automatically assigned, solely for the purpose of collection on behalf of the party retaining an interest in such Receivable, such Receivable and the other property conveyed to the Issuer pursuant to Section 2.01 with respect to such Receivable to the Servicer for purposes of commencing or participating in any such Proceeding as a party or claimant, and the Servicer is authorized and empowered by the Issuer to execute and deliver in the Servicer’s name any notices, demands, claims, complaints, responses, affidavits or other documents or instruments in connection with any such Proceeding.  If in any enforcement suit or Proceeding it shall be held that the Servicer may not enforce a Receivable on the grounds that it shall not be a real party in interest or a holder entitled to enforce such Receivable, the Owner Trustee shall, at the Servicer’s expense and written direction, take steps to enforce such Receivable, including bringing suit in the Servicer’s or the Issuer’s name or the name of the Owner Trustee, the Indenture Trustee, the Noteholders, the Certificateholders or any of them.

 

The Owner Trustee, on behalf of the Issuer, shall furnish the Servicer with any powers of attorney and other documents and take any other steps which the Servicer may deem necessary

 

 

 

  

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or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder.  The Servicer, at its expense, shall obtain on behalf of the Issuer or the Owner Trustee all licenses, if any, required by the laws of any jurisdiction to be held by the Issuer or the Owner Trustee in connection with ownership of the Receivables and shall make all filings and pay all fees as may be required in connection therewith during the term of this Agreement.  The Servicer shall, or shall cause the Administrator to, prepare, execute and deliver all certificates or other documents required to be delivered by the Issuer pursuant to the Sarbanes-Oxley Act of 2002 or the rules and regulations promulgated thereunder.

 

Section 3.02. Delegation of Duties; Subservicers.

 

(a) So long as MBFS USA is the Servicer, the Servicer may without notice or consent delegate (i) any or all of its duties under this Agreement to any Affiliate of MBFS USA or (ii) specific duties to sub-contractors who are in the business of performing such duties.

 

(b) The Servicer may enter into subservicing or sub-contracting agreements in accordance with Section 3.02(a) with one or more subservicers for the servicing and administration of any or all of the Receivables.  References in this Agreement or any subservicing or sub-contracting agreement to actions taken, or to be taken, permitted to be taken or restrictions on actions permitted to be taken, by the Servicer in servicing the Receivables shall include actions taken, or to be taken, permitted to be taken or restrictions on actions permitted to be taken, by a subservicer on behalf of the Servicer.  Each subservicing or sub-contracting agreement will be upon such terms and conditions as are not inconsistent with this Agreement and the standard of care set forth herein and as the Servicer and the related subservicer have agreed.  All compensation payable to a subservicer under a subservicing or sub-contracting agreement shall be payable by the Servicer from its servicing compensation or otherwise from its own funds.

 

(c) Notwithstanding any subservicing or sub-contracting agreement or any of the provisions of this Agreement relating to agreements or any arrangements between the Servicer or a subservicer or any reference to actions taken through such entities or otherwise, the Servicer shall remain obligated and liable for the servicing and administering of the Receivables in accordance with this Agreement without diminution of such obligation or liability by virtue of such subservicing or sub-contracting agreements.

 

(d) Any subservicing or sub-contracting agreement that may be entered into and any other transactions or servicing arrangements relating to or involving a subservicer shall be deemed to be between the subservicer and the Servicer alone, and the other parties hereto and the Administrator shall not be deemed parties thereto and shall have no obligations, duties or liabilities with respect to the subservicer.

 

Section 3.03. Collection of Receivable Payments; Modification of Receivables.  The 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 and the other Trust Property in such manner as will, in the reasonable judgment of the Servicer, maximize the amount to be received by the Issuer with respect thereto and in accordance with the standard of care required by Section 3.01.  The Servicer shall allocate

 

 

 

  

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collections on or in respect of the Receivables between principal and interest in accordance with the Simple Interest Method and the customary servicing practices and procedures it follows with respect to all comparable motor vehicle installment sales contracts and installment loans that it services for itself or others.  The Servicer shall not increase or decrease the number or amount of any Monthly Payment, except in response to a prepayment by the related Obligor, the Amount Financed under any Receivable or, except as may be required by Applicable Law, the APR of any Receivable, or extend, rewrite or otherwise modify the payment terms of any Receivable; provided, however, that the Servicer may extend the due date for one or more payments due on any Receivable for credit-related reasons that would be acceptable to the Servicer with respect to comparable motor vehicle installment sales contracts and installment loans that it services for itself or others and in accordance with its customary standards, policies, practices and procedures if the cumulative extensions with respect to any Receivable shall not cause the term of such Receivable to extend beyond the last day of the Collection Period immediately preceding the Class [__] Final Scheduled Distribution Date.  If the Servicer fails to comply with the provisions of the preceding sentence, the Servicer shall be required to purchase each Receivable affected thereby for the related Purchase Amount as of the close of business on the last day of the Collection Period that includes the 30th day after the Servicer becomes aware of such failure, by making such deposit in the manner specified in Section 3.08 on the Deposit Date immediately following such Collection Period.  The Servicer may, in its discretion (but only in accordance with its customary standards, policies, practices and procedures), waive any late payment charge or any other fee that may be collected in the ordinary course of servicing a Receivable.  In addition, in the event that any such extension of a Receivable modifies the terms of such Receivable in such a manner as to constitute a cancellation of such Receivable and the creation of a new motor vehicle receivable that results in a deemed exchange thereof within the meaning of Section 1001 of the Code, the Servicer shall purchase such Receivable pursuant to Section 3.08, and the Receivable created shall not be included in the Trust Property.

 

Section 3.04. Realization Upon Receivables.

 

(a) The Servicer shall use commercially reasonable efforts on behalf of the Issuer, in accordance with the standard of care required under Section 3.01, to repossess or otherwise convert the ownership of each Financed Vehicle securing a Defaulted Receivable.  In taking such action, the Servicer shall follow such customary and usual practices and procedures as it shall deem necessary or advisable in its servicing of comparable motor vehicle installment sales contracts and installment loans, and as are otherwise consistent with the standard of care required under Section 3.01.  The Servicer shall be entitled to recover all reasonable expenses incurred by it with respect to realizing on a Defaulted Receivable, including such expenses incurred in the course of repossessing and liquidating a Financed Vehicle into cash proceeds.  The foregoing is subject to the proviso that, in any case in which the Financed Vehicle shall have suffered damage, the Servicer shall not expend funds in connection with any repair or towards the repossession of such Financed Vehicle unless it shall determine in its discretion that such repair or repossession shall increase the Net Liquidation Proceeds or Recoveries of the related Receivable.

 

(b) If the Servicer elects to commence a Proceeding to enforce a Dealer Agreement, the act of commencement shall be deemed to be an automatic assignment from the Issuer to the Servicer of the rights of recourse under such Dealer Agreement.  If, however, in any Proceeding,

 

 

 

  

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it is held that the 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 Owner Trustee, at the Servicer’s expense and direction, shall take such steps as the Servicer deems necessary to enforce the Dealer Agreement, including bringing suit in its name or the names of the Indenture Trustee, the Securityholders or any of them.

 

Section 3.05. Maintenance of Physical Damage Insurance Policies.  The Servicer shall follow its customary standards, policies, practices and procedures to determine whether or not each Obligor shall have maintained physical damage insurance covering the related Financed Vehicle.  Each Receivable shall provide that the failure by the Obligor to obtain and maintain the required insurance is a default thereunder.  The Servicer shall not obtain force-placed insurance in respect of the Receivables.

 

Section 3.06. Maintenance of Security Interests in Financed Vehicles.  The Servicer shall take such steps, in accordance with the standard of care required under Section 3.01, as are necessary to maintain perfection of the security interest created by each Receivable in the related Financed Vehicle.  The Issuer hereby authorizes the Servicer, and the Servicer hereby agrees, to take such steps as are necessary to re-perfect such security interest on behalf of the Issuer and the Indenture Trustee in the event the Servicer receives notice of, or otherwise has actual knowledge of, the fact that such security interest is not perfected as a result of the relocation of a Financed Vehicle or for any other reason.  In the event that the assignment of a Receivable to the Issuer is insufficient, without a notation on the related Financed Vehicle’s certificate of title, to grant to the Issuer a first priority perfected security interest in the related Financed Vehicle, the Servicer hereby agrees to serve as the agent of the Issuer for the purpose of perfecting the security interest of the Issuer in such Financed Vehicle and agrees that the Servicer’s listing as the secured party on the certificate of title is solely in its capacity as agent of the Issuer.  The Servicer shall not release, in whole or in part, any security interest in a Financed Vehicle created by the related Receivable except as permitted herein or in accordance with its customary standards, policies, practices and procedures.

 

Section 3.07. Covenants of Servicer.  The Servicer makes the following covenants:

 

(a) Liens in Force.  Except upon the payment in full of a Receivable or as otherwise contemplated by this Agreement or Applicable Law, the Servicer shall not release in whole or in part any Financed Vehicle from the security interest securing the related Receivable.

 

(b) No Impairment.  The Servicer shall not impair in any material respect the rights of the Depositor, the Issuer, the Trustees or the Securityholders in the Receivables or, except as permitted under Section 3.03, otherwise amend or alter the terms of the Receivables and as a result of such amendment or modification or alteration, the interests of the Depositor, the Issuer, the Trustees or the Securityholders would be materially adversely affected.

 

(c) Schedule of Receivables to Indenture Trustee.  The Servicer shall on or before the Closing Date (and, at any time thereafter, upon the request of the Indenture

 

 

 

  

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Trustee) deliver to the Indenture Trustee a copy of the Schedule of Receivables, which may be delivered in electronic format.

 

Section 3.08. Purchase of Receivables Upon Breach.  The Depositor, the Seller, the Servicer or the Owner Trustee, as the case may be, shall inform the other parties to this Agreement and the Indenture Trustee promptly, in writing, upon the discovery of any breach of Section 3.03, 3.06 or 3.07.  If such breach shall not have been cured by the close of business on the last day of the Collection Period which includes the 30th day after the date on which the Servicer becomes aware of, or receives written notice from the Depositor, the Seller or the Owner Trustee of, such breach, and such breach materially and adversely affects the interest of the Issuer in a Receivable, the Servicer shall purchase such Receivable from the Issuer, as of the close of business on the last day of the related Collection Period, by remitting the Purchase Amount of such Receivable to the Collection Account in the manner specified in Section 4.07 on the related Deposit Date.  The sole remedy of the Issuer, the Trustees and the Securityholders with respect to a breach of Section 3.03, 3.06 or 3.07 shall be to require the Servicer to purchase Receivables pursuant to this Section.  Neither Trustee shall have any duty to conduct an affirmative investigation as to the occurrence of any condition requiring the purchase of any Receivable pursuant to this Section.

 

Section 3.09. Servicing Compensation; Payment of Certain Expenses by Servicer.  The Servicer shall receive the Monthly Servicing Fee for servicing the Receivables.  As additional servicing compensation, the Servicer shall be entitled to receive or retain the Supplemental Servicing Fee.  The Servicer shall pay all expenses incurred by it in connection with the activities under this Agreement (including the Independent accountants and any subservicer, taxes imposed on the Servicer, expenses incurred in connection with distributions and reports to Securityholders and all other fees and expenses not expressly stated under this Agreement to be for the account of the Securityholders), except expenses incurred in realizing upon Receivables under Section 3.04.

 

Section 3.10. Investor Report.  On or before each Determination Date, the Servicer shall deliver to the Depositor, the Seller and the Trustees, an Investor Report containing all information necessary to make the transfers and distributions required by Sections 4.01, 4.02, 4.06, 4.07 and 4.08 in respect of the related Collection Period and the related Distribution Date and all information necessary for the Trustees, as applicable, to send (or provide access to via the internet) statements to Securityholders pursuant to Section 6.06 of the Indenture and Section 5.01(b) of the Trust Agreement.  The Servicer shall also specify to the Trustees, no later than the Determination Date following the last day of a Collection Period as of which the Seller shall separately identify (by account number), in a written notice to the Depositor and the Trustees, the Receivables to be repurchased by the Seller or purchased by the Servicer, as the case may be, on the related Deposit Date.

 

Section 3.11. Annual Statement as to Compliance; Notice of Servicer Termination Events.

 

(a) The Servicer shall deliver to the Depositor, the Trustees and the Rating Agencies, within 90 days of the end of each calendar year, an Officer’s Certificate of the Servicer, stating that (i) a review of the activities of the Servicer during the preceding 12-month period ended December 31 (or, if applicable, such shorter period as shall have elapsed since the Closing Date in the case of the first such Officer’s Certificate) and of its performance under this Agreement

 

 

 

  

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has been made under such officer’s supervision and (ii) to the best of such officer’s knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement in all material respects throughout such period, or, if there has been a failure  to fulfill any such obligation in any material respect, specifying each such default known to such officer and the nature and status thereof.

 

(b) The Servicer shall deliver to the Depositor and the Trustees, promptly after having obtained knowledge thereof, but in no event later than five Business Days thereafter, an Officer’s Certificate specifying any event which constitutes or, with the giving of notice or lapse of time, or both, would become, a Servicer Termination Event.

 

Section 3.12. Annual Accountants’ Report.

 

(a) The Servicer shall cause a firm of independent certified public accountants (who may also render other services to the Servicer or to the Depositor or their respective Affiliates) to deliver to the Depositor and, if required or requested, to the Trustees within 90 days of the end of each calendar year, a report with respect to the preceding 12-month period ended December 31 (or, if applicable, such shorter period as shall have elapsed since the Closing Date in the case of the first such report) or other report to the effect that such accountants have examined, on a test basis, evidence of the Servicer’s compliance with the covenants and conditions set forth in this Agreement.  The report will express an opinion on the Servicer’s assertion that the Servicer complied in all material respects with the aforementioned covenants and conditions is fairly stated, in all material respects or the reason why such an opinion cannot be expressed.  Such report shall also indicate that the firm is Independent with respect to the Depositor and the Servicer within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants.  The requirement of this subparagraph shall apply only so long as the Depositor is required to file Exchange Act reports, or to the extent that Regulation AB otherwise requires, in each case with respect to the transaction contemplated by the Basic Documents.

 

(b) Notwithstanding Section 3.12(a), within 90 days of the end of each calendar year, the Servicer shall deliver the report and attestation set forth in Sections 3.12(c) and (d) and the delivery of a copy of such report and attestation to the Depositor and the Trustees shall be deemed to satisfy the provisions of this Section.

 

(c) As and when required pursuant to Section 3.12(b), the Servicer will deliver to the Depositor and the Trustees a report regarding the Servicer’s assessment of compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB during the immediately preceding calendar year (or, if applicable, such shorter period as shall have elapsed since the Closing Date in the case of the first such report), in accordance with paragraph (b) of Rule 13a-18 and Rule 15d-18 of the Exchange Act and Item 1122 of Regulation AB.  Such report shall be signed by an authorized officer of the Servicer and shall at a minimum address each of the servicing criteria specified in Part I of Schedule C hereto.

 

(d) The Servicer shall cause a firm of nationally recognized Independent public accountants to furnish to the Depositor and the Trustees, concurrently with the report delivered pursuant to Section 3.12(c), an attestation report providing its assessment of compliance with the

 

 

 

  

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servicing criteria covered in such report during the preceding fiscal year, including disclosure of any material  instance of non-compliance, as required by Rule 13a-18 or Rule 15d-18 under the Exchange Act and Item 1122(b) of Regulation AB.  Any such attestation report shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act, stating, among other things, that the Servicer’s assertion of compliance with the specified servicing criteria is fairly stated in all material respects, or the reason why such an opinion cannot be expressed.  Such report must be available for general use and not contain restricted use language.

 

Section 3.13. Access to Certain Documentation and Information Regarding Receivables.  Subject to Section 2.07(b), the Servicer shall provide the Depositor and the Trustees with access to the Receivables Files in the cases where the related Trustee or the Securityholders are required by Applicable Law to have access to such documentation.  Such access shall be afforded without charge but only upon reasonable request and during normal business hours which does not unreasonably interfere with the normal operations or customer or employee relations of the Servicer, at the offices of the Servicer.  Nothing in this Section shall affect the obligation of the Servicer to observe any Applicable Law prohibiting disclosure of information regarding the Obligors, and the failure of the Servicer to provide access to information as a result of such obligation shall not constitute a breach of this Section.

 

Section 3.14. Reports to the Commission.  The Servicer shall, on behalf of the Issuer, cause to be filed with the Commission any periodic reports required to be filed under the provisions of the Exchange Act, and the rules and regulations of the Commission thereunder.  The Depositor shall, at its expense, cooperate in any reasonable request made by the Servicer in connection with such filings.

 

Section 3.15. Reports to Rating Agencies.  The Servicer shall deliver to each Rating Agency, at such address as such Rating Agency may request, to the extent it is available to the Servicer, 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.

 

 

 

  

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ARTICLE FOUR

DISTRIBUTIONS; RESERVE FUND;

STATEMENTS TO SECURITYHOLDERS

 

Section 4.01. Establishment of Accounts.

 

(a) MBFS USA (as Servicer hereunder) shall establish the following Accounts, on or before the Closing Date, and maintain each as an Eligible Deposit Account in the name of the Indenture Trustee, at an Eligible Institution (which shall initially be the Indenture Trustee) for the benefit of:

 

(i) the Securityholders, designated as the “Mercedes-Benz Auto Receivables Trust 200[_]-[_] Collection Account, [_________________], Indenture Trustee” (the “Collection Account”);

 

(ii) the Noteholders, designated as the “Mercedes-Benz Auto Receivables Trust 200[_]-[_] Note Payment Account, [_________________], Indenture Trustee” (the “Note Payment Account”); and

 

(iii) the Noteholders, designated as the “Mercedes-Benz Auto Receivables Trust 200[_]-[_] Reserve Fund, [_________________], Indenture Trustee” (the “Reserve Fund”);

 

in each case bearing a designation clearly indicating that the funds deposited therein are held in trust for the benefit of the related Persons.  The Accounts shall be under the control of the Indenture Trustee; provided, however, that the Servicer may direct the Indenture Trustee in writing to make (or cause to be made) deposits to and withdrawals from the applicable Accounts in accordance with this Agreement and the other Basic Documents.  All monies deposited from time to time in the Accounts shall be held by, or in the name of, the Indenture Trustee as part of the Trust Property, and all deposits to and withdrawals therefrom shall be made only upon the terms and conditions of the Basic Documents.  Amounts on deposit in each Account shall, to the extent permitted by Applicable Law, be invested, as directed in writing by the Servicer, by the Eligible Institution then maintaining such Account in Eligible Investments.

 

(b) The Issuer and the Servicer agree that each Eligible Institution, with which an Account is established, will agree substantially as follows:

 

(i) it will comply with Entitlement Orders related to such account issued by the Indenture Trustee, without further consent by the Servicer;

 

(ii) until termination of this Agreement, it will not enter into any other agreement related to such Account pursuant to which it agrees to comply with Entitlement Orders of any Person other than the Indenture Trustee;

 

(iii) all Account Collateral delivered or credited to it in connection with such account and all proceeds thereof will be promptly credited to such Account;

 

 

 

  

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(iv) it will treat all Account Collateral as Financial Assets; and

 

(v) all Account Collateral will be physically delivered (accompanied by any required endorsements) to, or credited to an account in the name of, the Eligible Institution maintaining the related Account in accordance with such Eligible Institution’s customary procedures such that such Eligible Institution establishes a Security Entitlement in favor of the Indenture Trustee with respect thereto over which the Indenture Trustee has Control.

 

(c) If the sum of the amounts on deposit in the Collection Account related to such Collection Period and the Reserve Fund on any Distribution Date equals or exceeds the Note Balance, all accrued and unpaid interest thereon and all amounts due to the Servicer and the Trustees, all such amounts on deposit will be applied up to the amounts necessary to retire the Notes and pay such amounts due.

 

Section 4.02. Reserve Fund.

 

(a) On the Closing Date, the Depositor shall deposit the Reserve Fund Deposit into the Reserve Fund from the net proceeds of the sale of the Notes.  The Reserve Fund Property has been conveyed by the Depositor to the Issuer pursuant to Section 2.01(a).  Pursuant to the Indenture, the Issuer will pledge all of its right, title and interest in, to and under the Reserve Fund and the Reserve Fund Property to the Indenture Trustee on behalf of the Noteholders to secure its obligations under the Notes and the Indenture.

 

(b) If the Reserve Fund is no longer to be maintained at the Indenture Trustee, the Servicer shall, with MBFS USA’s and the Indenture Trustee’s prior approval (not to be unreasonably withheld) and assistance as necessary, promptly (and in any case within ten Business Days) cause the Reserve Fund to be moved to another Eligible Institution.  The Servicer shall promptly notify the Rating Agencies and the Trustees in writing of any change in the account number or location of the Reserve Fund.

 

(c) On each Distribution Date, the Indenture Trustee will deposit, or cause to be deposited, in the Reserve Fund, from amounts collected on or in respect of the Receivables during the related Collection Period and not used on that Distribution Date to pay the Required Payment Amount, the amount, if any, by which the Reserve Fund Required Amount for that Distribution Date exceeds the amount on deposit in the Reserve Fund on that Distribution Date, after giving effect to all required withdrawals from the Reserve Fund on that Distribution Date.

 

(d) On each Determination Date, the Servicer will determine the Reserve Fund Draw Amount, if any, for the related Distribution Date.  If the Reserve Fund Draw Amount for any Distribution Date is greater than zero, the Indenture Trustee will withdraw, or cause to be withdrawn, from the Reserve Fund, an amount equal to the lesser of the amount on deposit in the Reserve Fund and the Reserve Fund Draw Amount, and transfer the amount withdrawn to the Collection Account on the Deposit Date.

 

(e) If the Reserve Fund Amount for any Distribution Date (after giving effect to the withdrawal of the Reserve Fund Draw Amount for such Distribution Date and the distribution described in the preceding sentence) exceeds the Reserve Fund Required Amount for such

 

 

 

  

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Distribution Date, the Servicer shall instruct the Indenture Trustee in writing to distribute or cause to be distributed on the related Deposit Date, the amount of such excess to the Collection Account for payment to the Certificateholders on such Distribution Date.  Any amount paid to the Certificateholders will no longer constitute a portion of the Trust Property and the Indenture Trustee and the Issuer hereby release, on each Distribution Date, their security interest in, to and under the Reserve Fund Property distributed to the Certificateholders.  Notwithstanding the foregoing, investment income for each Collection Period (net of losses and expenses) on amounts on deposit in the Reserve Fund shall constitute Available Collections.

 

(f) If the Note Balance and all other amounts owing or to be distributed hereunder or under the Indenture to the Noteholders, the Trustees and the Servicer have been paid in full and the Issuer has been terminated, any remaining Reserve Fund Property shall be distributed to the Certificateholders.

 

Section 4.03. Monthly Remittance Condition.

 

(a) For so long as the Monthly Remittance Condition is (i) not met, the Servicer shall remit all amounts received on or in respect of the Receivables during any Collection Period to the Collection Account in immediately available funds no later than two Business Days after receipt and identification or (ii) met, the Servicer may remit all amounts received on or in respect of the Receivables during any Collection Period to the Collection Account in immediately available funds on or prior to the related Deposit Date.

 

(b) The Servicer shall remit to the Collection Account on or prior to the Closing Date all amounts received and identified by the Servicer on or in respect of the Receivables (including Net Liquidation Proceeds and all amounts received by the Servicer in connection with the repossession and sale of a Financed Vehicle (whether or not the related Receivable has been classified as a Defaulted Receivable)) during the period from but excluding the Cutoff Date to and including the second Business Day preceding the Closing Date.

 

(c) The Depositor and the Servicer may make any remittances pursuant to this Article with respect to a Collection Period net of distributions or reimbursements to be made to or by the Depositor or the Servicer with respect to such Collection Period; provided, however, that such obligations shall remain separate obligations, no party shall have a right of offset, and each such party shall account for all of the above described remittances and distributions as if the amounts were deposited or transferred separately.

 

Section 4.04. Collections.  Subject to Sections 4.03, 4.06 and 4.07(a), the Servicer shall remit to the Collection Account all amounts received by the Servicer on or in respect of the Receivables (including Net Liquidation Proceeds and all amounts received by the Servicer in connection with the repossession and sale of a Financed Vehicle (whether or not the related Receivable has been classified as a Defaulted Receivable) but excluding payments with respect to Purchased Receivables) as soon as practicable and in no event after the close of business on the second Business Day after such amounts have been received and identified.

 

Section 4.05. Application of Collections.  For purposes of this Agreement, all amounts received on or in respect of a Receivable during any Collection Period (including Net Liquidation

 

 

 

  

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Proceeds and all amounts received by the Servicer in connection with the repossession and sale of a Financed Vehicle (whether or not the related Receivable has been classified as a Defaulted Receivable) but excluding payments with respect to Purchased Receivables) shall be applied by the Servicer to interest and principal on such Receivable in accordance with the Simple Interest Method.

 

Section 4.06. Advances.

 

(a) If, as of the end of any Collection Period, the payments received during such Collection Period by or on behalf of an Obligor in respect of a Receivable (other than a Purchased Receivable) shall be less than the related Monthly Payment, whether as a result of any extension granted to the Obligor or otherwise, then, at the option of the Servicer, an amount equal to the product of the Principal Balance of such Receivable as of the first day of the related Collection Period and one-twelfth of its APR minus the amount of interest actually received on such Receivable during such Collection Period (each, an “Advance”) may be deposited by the Servicer into the Collection Account on the related Deposit Date.  If such a calculation in respect of a Receivable results in a negative number, an amount equal to such negative amount shall be paid to the Servicer in reimbursement of any outstanding Advances.  In addition, in the event that a Receivable becomes a Defaulted Receivable, the amount of accrued and unpaid interest thereon (but not including interest for the current Collection Period) shall, up to the amount of outstanding Advances, be withdrawn from the Collection Account and paid to the Servicer in reimbursement of such outstanding Advances.  No Advances will be made with respect to the Principal Balance of Receivables.  The Servicer shall not be required to make an Advance to the extent that the Servicer, in its sole discretion, shall determine that such Advance is likely to become a Nonrecoverable Advance.

 

(b) Notwithstanding the provisions of Section 4.06(a), the Servicer shall be entitled to reimbursement for an outstanding Advance made in respect of a Receivable, without interest, from the following sources with respect to such Receivable: (i) subsequent payments made by or on behalf of the related Obligor, (ii) Net Liquidation Proceeds and Recoveries and (iii) the Purchase Amount.  If the Servicer determines that it has made a Nonrecoverable Advance, the Servicer shall reimburse itself, without interest, from unrelated amounts received by the Servicer on or in respect of the Receivables (including Net Liquidation Proceeds and all amounts received by the Servicer in connection with the repossession and sale of a Financed Vehicle (whether or not the related Receivable has been classified as a Defaulted Receivable)) to the extent it shall, concurrently with the withholding of any such amounts from deposit in or credit to the Collection Account, furnish to the Trustees a certificate of a Servicing Officer setting forth the basis for the Servicer’s determination, the amount of, and Receivable with respect to which, such Nonrecoverable Advance was made and the installment or installments or other proceeds respecting which such reimbursement has been taken.

 

Section 4.07. Additional Deposits.

 

(a) The following additional deposits shall be made: (i) the Seller shall remit to the Collection Account the aggregate Purchase Amount with respect to Purchased Receivables pursuant to Section 2.05 hereof or pursuant to Section 3.03(c) of the Receivables Purchase Agreement, (ii) the Servicer shall remit or cause to be remitted to the Collection Account (A) the

 

 

 

  

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aggregate Purchase Amount with respect to Purchased Receivables pursuant to Section 3.03 or Section 3.08 and (B) the amount required upon the optional purchase of all Receivables by the Servicer pursuant to Section 8.01 and (iii) the Indenture Trustee shall remit or shall cause to be remitted, pursuant to Section 4.02, the Reserve Fund Draw Amount to the Collection Account.

 

(b) All deposits required to be made in respect of a Collection Period pursuant to this Section by the Servicer may be made in the form of a single deposit and shall be made in immediately available funds, no later than [___] [p].m., New York City time, on the related Deposit Date.

 

Section 4.08. Determination Date Calculations; Application of Available Funds.

 

(a) On each Determination Date, the Servicer shall calculate the following amounts with respect to the related Distribution Date and Collection Period:

 

(i) the Available Collections;

 

(ii) the Total Servicing Fee (including the amount of any Nonrecoverable Advances);

 

(iii) if not previously paid, the Total Trustee Fees;

 

(iv) the Interest Distributable Amount for each Class of Notes;

 

(v) the Priority Principal Distributable Amount;

 

(vi) the Regular Principal Distributable Amount; and

 

(vii) the sum of the amounts described in clauses (ii) through (v) above (the “Required Payment Amount”); provided, however, that so long as the Notes have not been accelerated in accordance with the Indenture following an Event of Default, the aggregate amount to be included in the Required Payment Amount pursuant to clause (iii) above shall not exceed $100,000 in any given calendar year.

 

On each Determination Date, the Servicer shall calculate the Reserve Fund Amount, the Reserve Fund Required Amount, the Reserve Fund Draw Amount and the amount, if any, by which the Reserve Fund Required Amount exceeds the Reserve Fund Amount (after giving effect to any deposits to the Reserve Fund and the withdrawal of the Reserve Fund Draw Amount for such Distribution Date).

 

(b) On each Determination Date, the Servicer shall instruct the Indenture Trustee to apply (or cause to be applied) on the related Distribution Date, the Available Funds for such Distribution Date to make the related payments and deposits set forth in Section 2.08 of the Indenture.

 

 

 

  

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Section 4.09. Statements to Securityholders.  Within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of the Issuer, but not later than the latest date permitted by law, the Servicer shall cause each Trustee to mail to each Person who at any time during such calendar year shall have been a Securityholder, a statement, prepared by the Servicer, containing certain information for such calendar year or, in the event such Person shall have been a Securityholder during a portion of such calendar year, for the applicable portion of such year, for the purposes of such Securityholder’s preparation of federal income tax returns.  In addition, the Servicer shall furnish to the Trustees for distribution to such Person at such time any other information necessary under Applicable Law for the preparation of such income tax returns.

 

 

 

  

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ARTICLE FIVE

 

THE DEPOSITOR

 

Section 5.01. Representations and Warranties of Depositor.  The Depositor makes the following representations and warranties on which the Issuer is deemed to have relied in acquiring the Trust Property.  The representations and warranties speak as of the date of execution and delivery of this Agreement and as of the Closing Date, and shall survive the sale, transfer, assignment and conveyance of the Trust Property to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture.

 

(a) Organization and Good Standing.  The Depositor has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, power, authority and legal right to acquire, own and sell the Receivables.

 

(b) Due Qualification.  The Depositor is duly qualified to do business as a foreign limited liability company in good standing and has obtained all necessary licenses and approvals in each jurisdiction in which the failure to so qualify or to obtain such licenses and approvals would, in the reasonable judgment of the Depositor, materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, the Depositor Basic Documents, the Receivables or the Securities.

 

(c) Power and Authority.  The Depositor has the power and authority to execute, deliver and perform its obligations under the Depositor Basic Documents.  The Depositor has the power and authority to sell, assign, transfer and convey the property to be transferred to and deposited with the Issuer and has duly authorized such sale, assignment, transfer and conveyance by all necessary limited liability company action; and the execution, delivery and performance of the Depositor Basic Documents has been duly authorized by the Depositor by all necessary limited liability company action.

 

(d) Valid Sale; Binding Obligation.  This Agreement effects a valid sale, transfer, assignment and conveyance to the Issuer of the Receivables and the other Trust Property, enforceable against all creditors of and purchasers from the Depositor.  Each Depositor Basic Document constitutes a legal, valid and binding obligation of the Depositor enforceable against the Depositor in accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws affecting the enforcement of creditors’ rights in general, and by general principles of equity, regardless of whether considered in a Proceeding in equity or at law.

 

(e) No Violation.  The execution, delivery and performance by the Depositor of the Depositor Basic Documents and the consummation of the transactions contemplated hereby and thereby and the fulfillment of the terms hereof and thereof does

 

 

 

  

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not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time, or both) a default under, the certificate of formation or limited liability company agreement of the Depositor, or conflict with or violate any of the material terms or provisions of, or constitute (with or without notice or lapse of time, or both) a default under, any indenture, agreement or other instrument to which the Depositor is a party or by which it shall be bound or to which any of its properties is subject; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement); nor violate any law or, to the Depositor’s knowledge, any order, rule or regulation applicable to the Depositor or of Governmental Authority having jurisdiction over the Depositor or its properties, which conflict, breach, default, Lien or violation would have a material adverse effect on the performance by the Depositor of its obligations under or the validity or enforceability of, the Depositor Basic Documents, the Receivables or the Securities.

 

(f) No Proceedings.  There are no Proceedings or investigations pending, or to the Depositor’s knowledge, threatened against the Depositor, before any Governmental Authority having jurisdiction over the Depositor or its properties: (i) asserting the invalidity of any Basic Document or the Securities, (ii) seeking to prevent the issuance of the Securities or the consummation of any of the transactions contemplated by the Basic Documents, (iii) seeking any determination or ruling that, in the reasonable judgment of the Depositor, would materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, the Depositor Basic Documents, the Receivables or the Securities or (iv) relating to the Depositor and which might adversely affect the federal income tax attributes of the Issuer or the Securities.

 

Section 5.02. Liability of Depositor; Indemnities.

 

(a) The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Depositor under this Agreement.

 

(b) The Depositor shall indemnify, defend and hold harmless the Issuer, the Owner Trustee and the Indenture Trustee from and against any taxes that may at any time be asserted against any such Person with respect to the transactions contemplated by the Basic Documents, including any sales, gross receipts, gross margin, general corporation, tangible personal property, privilege or license taxes (but not including any taxes asserted with respect to, and as of the date of the sale of the Receivables to the Issuer or the issuance and original sale of the Securities, or federal or State income taxes arising out of distributions on the Securities), and all costs and expenses in defending against such taxes.

 

(c) The Depositor shall indemnify, defend and hold harmless the Issuer, the Trustees and the Securityholders from and against any loss, liability, claim, damage or expense incurred by reason of the Depositor’s willful misfeasance, bad faith or negligence (other than errors in judgment) in the performance of its duties under the Depositor Basic Documents, or by reason of reckless disregard of its obligations and duties under the Depositor Basic Documents.

 

 

 

  

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(d) The Depositor shall indemnify, defend and hold harmless the Trustees from and against all losses, liabilities, claims, damages or expenses arising out of or incurred in connection with the acceptance or performance of the trusts and duties contained herein, in the Trust Agreement (in the case of the Owner Trustee) and in the Indenture (in the case of the Indenture Trustee), except to the extent that such loss, liability, claim, damage or expense (i) shall be due to the willful misfeasance, bad faith or negligence of the Owner Trustee or the Indenture Trustee, as applicable, (ii) in the case of (A) the Owner Trustee, shall arise from the breach by the Owner Trustee of any of its representations or warranties set forth in the Trust Agreement or (B) the Indenture Trustee, shall arise from the breach by the Indenture Trustee of any of its representations and warranties set forth in the Indenture or shall arise out of or be incurred in connection with the performance by the Indenture Trustee of the duties of a Successor Servicer hereunder, (iii) shall be one as to which the Servicer is required to indemnify either Trustee or (iv) relates to any tax other than the taxes with respect to which the Servicer shall be required to indemnify either Trustee.  The Depositor shall pay any and all taxes levied or assessed upon all or any part of the Trust Property.

 

(e) Indemnification under this Section shall survive the resignation or removal of the Owner Trustee or the Indenture Trustee, as the case may be, and the termination of this Agreement and shall include reasonable fees and expenses of counsel and expenses of litigation.  If the Depositor shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the Depositor, without interest.  Notwithstanding anything to the contrary contained herein, the Depositor shall only be required to pay (i) any fees, expenses, indemnities or other liabilities that it may incur under the Basic Documents from funds available pursuant to, and in accordance with, the payment priorities set forth in this Agreement and the other Basic Documents and (ii) to the extent the Depositor has additional funds available (other than funds described in clause (i) above) that would be in excess of amounts that would be necessary to pay the debt and other obligations of the Depositor in accordance with the Depositor’s certificate of formation, operating agreement and all financing documents to which the Depositor is a party.  The agreement set forth in the preceding sentence shall constitute a subordination agreement for purposes of Section 510(a) of the Bankruptcy Code.  In addition, no amount owing by the Depositor hereunder in excess of liabilities that it is required to pay in accordance with the preceding sentence shall constitute a “claim” (as defined in Section 101(5) of the Bankruptcy Code) against it.

 

 

  

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Section 5.03. Merger, Consolidation or Assumption of the Obligations of Depositor.  Any Person (i) into which the Depositor shall be merged or consolidated, (ii) resulting from any merger, conversion or consolidation to which the Depositor shall be a party or (iii) that shall succeed by purchase and assumption to all or substantially all of the business of the Depositor, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Depositor under this Agreement, shall be the successor to the Depositor under this Agreement without the execution or filing of any other document or any further act on the part of any of the parties to this Agreement; provided, however, that (A) the Depositor shall have delivered to the Trustees an Officer’s Certificate and an Opinion of Counsel each stating that such merger, conversion, consolidation or succession and such agreement of assumption comply with this Section, (B) the Depositor shall have delivered to the Trustees an Opinion of Counsel stating that, in the opinion of such counsel, either (1) all financing statements and continuation statements and amendments thereto have been authorized and filed that are necessary to fully preserve and protect the interest of the Issuer and the Indenture Trustee, respectively, in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (2) no such action shall be necessary to fully preserve and protect such interest and (C) the Rating Agency Condition shall have been satisfied.  Notwithstanding anything to the contrary contained herein, the execution of the foregoing agreement of assumption and compliance with clauses (A), (B) and (C) above shall be conditions to the consummation of the transactions referred to in clauses (i), (ii) and (iii) above.

 

Section 5.04. Limitation on Liability of Depositor and Others.  The Depositor and any director or officer or employee or agent of the Depositor may rely in good faith on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder.  The Depositor and any director or officer or employee or agent of the Depositor shall be reimbursed by the Indenture Trustee for any contractual damages, liability or expense incurred by reason of the Indenture Trustee’s willful misfeasance, bad faith or negligence (except for errors in judgment) in the performance of its duties hereunder, or by reason of reckless disregard of its respective obligations and duties hereunder.  The Depositor 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.  The indemnities contained in this Section shall survive the resignation of the Indenture Trustee or termination of this Agreement.

 

Section 5.05. Depositor Not to Resign.  Subject to the provisions of Section 5.03, the Depositor shall not resign from the obligations and duties hereby imposed on it as Depositor hereunder.

 

Section 5.06. Depositor May Own Securities.  The Depositor and any of its Affiliates may, in its individual or any other capacity, become the owner or pledgee of Securities with the same rights as it would have if it were not the Depositor or an Affiliate of the Depositor, except as otherwise expressly provided herein or in any other Basic Document (including in the definition of the terms “Note Balance” and “Outstanding”).  Except as otherwise expressly provided herein or in the other Basic Documents (including in the definition of the terms “Note Balance” and “Outstanding”), Securities so owned by or pledged to the Depositor or such Affiliate shall have an equal and proportionate benefit under the provisions of this Agreement and the other Basic

 

 

 

  

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Documents, without preference, priority or distinction as among the Notes and the Certificates as the case may be.

 

Section 5.07. Covenants of Depositor.  The Depositor makes the following covenants as of the date of this Agreement:

 

(a) The Depositor makes the covenants in Section 2.08, 4.03(c)(iv) and 4.03(c)(v) of the Depositor Limited Liability Company Agreement, which covenants are hereby incorporated into and made a part of this Agreement.

 

(b) The Depositor shall not conduct or promote any activities except as set forth in Section 2.04 of the Depositor Limited Liability Company Agreement.

 

 

 

  

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ARTICLE SIX

 

THE SERVICER

 

Section 6.01. Representations and Warranties of Servicer.  The Servicer makes the following representations and warranties on which the Issuer is deemed to have relied in acquiring the Trust Property.  The representations and warranties speak as of the date of execution and delivery of this Agreement and as of the Closing Date, and shall survive the sale, transfer, assignment and conveyance of the Trust Property to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture:

 

(a) Organization and Good Standing.  The Servicer is a limited liability company duly organized and validly existing under the laws of the State of Delaware and continues to hold a valid certificate to do business as such.  It is duly authorized to own its properties and transact its business and is in good standing in each jurisdiction in which the character of the business transacted by it or any properties owned or leased by it requires such authorization and in which the failure to be so authorized would have a material adverse effect on its business, properties, assets or condition (financial or other) and those of its subsidiaries, considered as one enterprise.  The Servicer has, and at all relevant times had, the power, authority and legal right to service the Receivables and to hold the Receivable Files as custodian on behalf of the Issuer.

 

(b) Due Qualification.  The Servicer is duly qualified to do business in good standing and has obtained all necessary licenses and approvals in each jurisdiction in which the failure to so qualify or to obtain such licenses and approvals would, in the reasonable judgment of the Servicer, materially and adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability of, the Servicer Basic Documents, the Receivables or the Securities.

 

(c) Power and Authority.  The Servicer has the power and authority to execute, deliver and perform its obligations under the Servicer Basic Documents; and the execution, delivery and performance of the Servicer Basic Documents have been duly authorized by the Servicer by all necessary action.

 

(d) Binding Obligation.  Each Servicer Basic Document constitutes the legal, valid and binding obligation of the Servicer, enforceable against the Servicer in accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws affecting the enforcement of creditors’ rights in general, and by general principles of equity, regardless of whether considered in a Proceeding in equity or at law.

 

(e) No Violation.  The execution, delivery and performance by the Servicer of the Servicer Basic Documents, the consummation of the transactions contemplated hereby and thereby and the fulfillment of their respective terms shall not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the certificate of formation or limited

 

 

 

  

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liability company agreement of the Servicer, or any material indenture, agreement, mortgage, deed of trust or other instrument to which the Servicer is a party, by which the Servicer is bound or to which any of its properties are subject; or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than the Servicer Basic Documents, or violate any law, order, rule or regulation applicable to the Servicer or its properties of any Governmental Authority having jurisdiction over the Servicer or any of its properties.

 

(f) No Proceedings.  There are no Proceedings or investigations pending or, to the knowledge of the Servicer, threatened, against the Servicer before any Governmental Authority having jurisdiction over the Servicer or its properties: (i) asserting the invalidity of any Basic Document, (ii) seeking to prevent the issuance of the Securities or the consummation of any of the transactions contemplated by the Basic Documents, (iii) seeking any determination or ruling that, in the reasonable judgment of the Servicer, would materially and adversely affect the performance by it of its obligations under, or the validity or enforceability of, this Agreement or the Receivables or (iv) seeking to adversely affect the federal income tax or other federal, State or local tax attributes of the Securities.

 

Section 6.02. Liability of Servicer; Indemnities.  The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer under this Agreement.  Such obligations shall include the following:

 

(a) The Servicer shall indemnify, defend and hold harmless the Issuer, the Trustees, the Securityholders and the Depositor from and against all losses, liabilities, claims, damages and expenses arising out of or incurred in connection with the use, ownership or operation by the Servicer or any Affiliate of the Servicer of a Financed Vehicle.

 

(b) The Servicer shall indemnify, defend and hold harmless the Issuer, the Depositor and the Trustees from and against any taxes that may at any time be asserted against any such Person as a result of or relating to the transactions contemplated herein and in the other Basic Documents, including any sales, gross receipts, gross margin, general corporation, tangible personal property, privilege or license taxes (but not including any taxes asserted with respect to, and as of the date of, the sale of the Receivables to the Issuer or the issuance and original sale of the Securities, or federal or State income taxes arising out of distributions on the Securities) and costs and expenses in defending against such taxes.

 

(c) The Servicer shall indemnify, defend and hold harmless the Issuer, the Trustees, the Securityholders and the Depositor from and against any loss, liability, claim, damage or expense incurred by reason of the Servicer’s willful misfeasance, bad faith or negligence in the performance of its duties under the Servicer Basic Documents or by reason of a reckless disregard of its obligations and duties under the Servicer Basic Documents.

 

 

 

  

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(d) The Servicer shall indemnify, defend and hold harmless the Trustees and their respective officers, directors, employees and agents from and against all losses, liabilities, claims, damages and expenses arising out of or incurred in connection with the acceptance or performance of the trusts and duties herein and contained in the Trust Agreement (in the case of the Owner Trustee) and contained in the Indenture (in the case of the Indenture Trustee), except to the extent that such loss, liability, claim, damage or expense: (i) shall be due to the willful misfeasance, bad faith or negligence (except for errors in judgment) of the Owner Trustee or the Indenture Trustee, as applicable, (ii) in the case of the Owner Trustee, shall arise from the breach by the Owner Trustee of any of its representations or warranties set forth in Section 7.03 of the Trust Agreement, (iii) in the case of the Indenture Trustee, shall arise from the breach by the Indenture Trustee of any of its representations and warranties set forth in the Indenture or shall arise out of or be incurred in connection with the performance by the Indenture Trustee of the duties of a Successor Servicer hereunder or (iv) relates to any tax other than to the taxes with respect to which either the Depositor or the Servicer shall be required to indemnify the Owner Trustee or the Indenture Trustee, as applicable.

 

(e) The Servicer shall pay the Owner Trustee compensation, reimbursement or other payments owed to it pursuant to Sections 8.01 and 8.02 of the Trust Agreement.

 

In addition to the foregoing indemnities, if either Trustee is entitled to indemnification by the Depositor pursuant to Section 5.02 and the Depositor is unable for any reason to provide such indemnification to either Trustee, then the Servicer shall be liable for any indemnification that such Trustee is entitled to under Section 5.02.  For purposes of this Section, in the event of a termination of the rights and obligations of the Servicer (or any Successor Servicer) pursuant to Section 7.01 or a resignation by such Servicer pursuant to Section 6.05, such Servicer shall be deemed to be the Servicer pending appointment of a Successor Servicer (other than the Indenture Trustee) pursuant to Section 7.02.  Indemnification under this Section by the Servicer (or any Successor Servicer), with respect to the period such Person was (or was deemed to be) the Servicer, shall survive the termination of each Person as Servicer or a resignation by such Person as Servicer, as well as the resignation or removal of the Owner Trustee or the Indenture Trustee, as the case may be, or the termination of this Agreement and shall include reasonable fees and expenses of counsel and expenses of litigation.  If the Servicer shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter collects any of such amounts from others, such Person shall promptly repay such amounts to the Servicer, as the case may be, without interest.

 

Section 6.03. Merger or Consolidation of, or Assumption of the Obligations of Servicer.  Any Person (i) into which the Servicer shall be merged or consolidated, (ii) which may result from any merger, conversion or consolidation to which the Servicer shall be a party or (iii) which may succeed to all or substantially all of the business of the Servicer, which Person in any of the foregoing cases is an Eligible Servicer and executes an agreement of assumption to perform every obligation of the Servicer under this Agreement, shall be the successor to the Servicer under this Agreement without the execution or filing of any other document or any further act on the part of any of the parties hereto; provided, however, the Servicer shall have delivered to the Depositor and the Trustees (a) an Officer’s Certificate and an Opinion of Counsel each stating that such merger, conversion or consolidation and such agreement of assumption comply with this Section

 

 

 

  

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and (b) an Opinion of Counsel stating that, in the opinion of such counsel, either (1) all financing statements and continuation statements and amendments thereto have been authorized and filed that are necessary to preserve and protect the interest of the Issuer and the Indenture Trustee, respectively, in the assets of the Issuer and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given or (2) no such action shall be necessary to preserve and protect such interest.  Notwithstanding anything to the contrary contained herein, the execution of the foregoing agreement of assumption and compliance with clauses (a) and (b) above shall be conditions to the consummation of the transactions referred to in clauses (i), (ii) and (iii) above.  The Servicer shall provide prior written notice of any merger, conversion, consolidation or succession pursuant to this Section to the Trustees, the Rating Agencies and the Depositor.  The Servicer shall provide such information in writing as reasonably requested by the Depositor to allow the Depositor to comply with its Exchange Act reporting obligations with respect to a Successor Servicer.

 

Section 6.04. Limitation on Liability of Servicer and Others.

 

(a) Neither the Servicer nor any of its directors, officers, employees or agents shall be under any liability to the Issuer or any Securityholders for any action taken or for refraining from the taking of any action pursuant hereto, or for errors in judgment; provided, however, that this provision shall not protect the Servicer or any such Person against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder.  The Servicer and any of its 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 in respect of any matters arising under this Agreement.

 

(b) Except as provided herein, the 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 administer and service the Receivables in accordance with this Agreement, and that in its opinion may involve it in any expense or liability; provided, however, that the Servicer may undertake any reasonable action that it may deem necessary or desirable in respect of this Agreement and the rights and duties of the parties to this Agreement and the interests of the Noteholders and the Certificateholders under this Agreement.  In such event, the legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Servicer.

 

Section 6.05. MBFS USA Not to Resign as Servicer.  MBFS USA will not resign as Servicer under this Agreement except upon determination that the performance of its duties under this Agreement is no longer permissible under law.  Prior to the effectiveness of such resignation, MBFS USA will deliver to the Depositor and the Trustees (i) notice of any such determination permitting the resignation of MBFS USA as Servicer and (ii) an Opinion of Counsel to such effect.  Any such resignation will become effective in accordance with Section 7.02.

 

Section 6.06. Servicer May Own Securities.  The Servicer and any of its Affiliates may, in its individual or other capacity, become the owner or pledgee of Securities with the same rights as it would have if it were not the Servicer or an Affiliate of the Servicer, except as otherwise expressly provided herein or in any other Basic Document (including in the definition of the terms “Note Balance” and “Outstanding”).  Except as otherwise expressly provided herein or in the

 

 

 

  

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other Basic Documents (including in the definition of the terms “Note Balance” and “Outstanding”), Securities so owned by or pledged to the Servicer or 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 the Notes and the Certificates, as the case may be.

 

 

 

  

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ARTICLE SEVEN

 

SERVICER TERMINATION EVENTS

 

Section 7.01. Servicer Termination Events.  The occurrence of any one of the following events shall constitute an event of servicing termination hereunder (each, a “Servicer Termination Event”):

 

(a) any failure by the Servicer to deliver to the Indenture Trustee the Investor Report for any Collection Period, which failure shall continue unremedied beyond the earlier of two Business Days following the date such Investor Report was required to be delivered and the related Distribution Date, or any failure by the Servicer to make any required payment or deposit under this Agreement, which failure shall continue unremedied beyond the earlier of five Business Days following the date such payment or deposit was due and, in the case of a payment or deposit to be made no later than a Distribution Date or the related Deposit Date, such Distribution Date or Deposit Date, as applicable;

 

(b) any failure by the Servicer to duly observe or to perform in any material respect any other covenant or agreement of the Servicer set forth in this Agreement, which failure shall materially and adversely affect the rights of the Depositor or the Noteholders and shall continue unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given (i) to the Servicer by the Depositor or either Trustee or (ii) to the Depositor, the Servicer and the Trustees by the Holders of Notes evidencing not less than 25% of the Note Balance of the Controlling Class (or, after the Notes have been paid in full, the holders of Certificates evidencing not less than 25% of the aggregate Certificate Percentage Interests then outstanding);

 

(c) any representation or warranty of the Servicer made in this Agreement, or in any certificate delivered pursuant hereto or in connection herewith, other than any representation or warranty relating to a Receivable that has been purchased by the Servicer, proving to have been incorrect in any material respect as of the time when the same shall have been made, and the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured for a period of 30 days after the date on which written notice of such circumstance or condition, requiring the same to be eliminated or cured, shall have been given (i) to the Servicer by the Depositor or either Trustee or (ii) to the Depositor, the Servicer and the Trustees by the Holders of Notes evidencing not less than 25% of the Note Balance of the Controlling Class; or

 

(d) an Insolvency Event occurs with respect to the Servicer.

 

If a Servicer Termination Event shall have occurred and not have been remedied, either the Indenture Trustee or the Holders of Notes evidencing not less than 51% of the Note Balance of the Controlling Class (or holders of Certificates representing not less than 51% of the aggregate Certificate Percentage Interests outstanding if the Notes are no longer Outstanding), in

 

 

 

  

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each case by providing a Servicer Termination Notice to the Depositor, the Owner Trustee and the Servicer (and to the Indenture Trustee if given by the Noteholders) may terminate all the rights and obligations of the Servicer under this Agreement; provided, however, that the indemnification obligations of the Servicer under Section 6.02 shall survive such termination.

 

On or after the receipt by the Servicer of a Servicer Termination Notice, all authority and power of the Servicer under this Agreement, whether with respect to the Notes, the Certificates, the Trust Property or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Trustees are hereby authorized and empowered to execute and deliver, on behalf of the outgoing 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 Receivable Files or the certificates of title to the Financed Vehicles, or otherwise.  The outgoing Servicer shall cooperate with the Indenture Trustee, the Owner Trustee and such Successor Servicer in effecting the termination of the responsibilities and rights of the outgoing Servicer under this Agreement, including the transfer to the Indenture Trustee or such Successor Servicer for administration by it of all cash amounts that shall at the time be held by the outgoing Servicer for deposit, or have been deposited by the outgoing Servicer, in the Accounts or thereafter received with respect to the Receivables, all Receivable Files and all information or documents that the Indenture Trustee or such Successor Servicer may require.  In addition, the Servicer shall transfer its electronic records relating to the Receivables to the Successor Servicer in such electronic form as the Successor Servicer may reasonably request.  All Transition Costs shall be paid by the outgoing Servicer (or by the initial Servicer if the outgoing Servicer is the Indenture Trustee acting on an interim basis) upon presentation of reasonable documentation of such costs and expenses.

 

The Trustees shall have no obligation to notify the Noteholders, the Certificateholders or any other Person of the occurrence of any event specified in this Section prior to the continuance of such event through the end of any cure period specified in this Section.

 

Section 7.02. Appointment of Successor Servicer.  Upon the resignation of the Servicer pursuant to Section 6.05 or the termination of the Servicer pursuant to Section 7.01, the Indenture Trustee shall be the successor in all respects to the Servicer in its capacity as Servicer under this Agreement and shall be subject to all the obligations and duties placed on the Servicer by the terms and provisions of this Agreement, and shall provide such information in writing as reasonably requested by the Depositor to allow the Depositor to comply with its Exchange Act reporting obligations with respect to the Indenture Trustee in its capacity as Successor Servicer; provided, however, that the Indenture Trustee, as Successor Servicer, shall not, in any event, be required to make any Advances pursuant to Section 4.06 and shall have no obligations pursuant to Section 3.09 with respect to the fees and expenses of the Trustees, the fees and expenses of the  attorneys for the Trustees, the fees and expenses of any custodian appointed by the Trustees, the fees and expenses of Independent accountants or expenses incurred in connection with distributions and reports to the Securityholders.  As compensation therefor, the Indenture Trustee shall be entitled to such compensation (whether payable out of the Collection Account or otherwise) as the Servicer would have been entitled to under this Agreement if no such resignation or termination had occurred, except that all collections on or in respect of the Receivables shall be

 

 

 

  

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deposited in the Collection Account within two Business Days of receipt and shall not be retained by the Servicer.  Notwithstanding the foregoing, the Indenture Trustee may, if it shall be unwilling so to act, or shall, if it is legally unable so to act, appoint, or petition a court of competent jurisdiction to appoint, an Eligible Servicer as the successor to the terminated Servicer under this Agreement.  In connection with such appointment, the Indenture Trustee may make such arrangements for the compensation of such Successor Servicer out of collections on or in respect of the Receivables as it and such successor shall agree; provided, however, that such compensation shall not be greater than that payable to MBFS USA as initial Servicer hereunder without the prior consent of the Holders of Notes evidencing not less than 51% of the Note Balance of the Controlling Class (or Holders of Certificates representing not less than 51% of the aggregate Certificate Percentage Interests then outstanding if the Notes are no longer Outstanding).  The Indenture Trustee and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession, including providing such information in writing as reasonably requested by the Depositor to allow the Depositor to comply with its Exchange Act reporting obligations with respect to such Successor Servicer.  The Indenture Trustee shall not be relieved of its duties as Successor Servicer under this Section until a newly appointed Servicer shall have assumed the obligations and duties of the terminated Servicer under this Agreement.  Notwithstanding anything to the contrary contained herein, in no event shall the Indenture Trustee be liable for any servicing fee or for any differential in the amount of the servicing fee paid hereunder and the amount necessary to induce any Successor Servicer to act as Successor Servicer hereunder.

 

Section 7.03. Effect of Servicing Transfer.

 

(a) After a transfer of servicing hereunder, the Indenture Trustee or Successor Servicer shall notify the Obligors to make directly to the Successor Servicer payments that are due under the Receivables after the effective date of such transfer.

 

(b) Except as provided in Section 7.02, after a transfer of servicing hereunder, the outgoing Servicer shall have no further obligations with respect to the administration, servicing, custody or collection of the Receivables and the Successor Servicer shall have all of such obligations, except that the outgoing Servicer will transmit or cause to be transmitted directly to the Successor Servicer for its own account, promptly on receipt and in the same form in which received, any amounts or items held by the outgoing Servicer (properly endorsed where required for the Successor Servicer to collect any such items) received as payments upon or otherwise in connection with the Receivables.

 

(c) Any Successor Servicer shall provide the Depositor with access to the Receivable Files and to the Successor Servicer’s records (whether written or automated) with respect to the Receivable Files.  Such access shall be afforded without charge, but only upon reasonable request and during normal business hours at the offices of the Successor Servicer.  Nothing in this Section shall affect the obligation of a Successor Servicer to observe any Applicable Law prohibiting disclosure of information regarding the Obligors, and the failure of the Servicer to provide access to information as a result of such obligation shall not constitute a breach of this Section.

 

 

 

  

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(d) Any transfer of servicing hereunder shall not constitute an assumption by the related Successor Servicer of any liability of the related outgoing Servicer arising out of any breach by such outgoing Servicer of such outgoing Servicer’s duties hereunder prior to such transfer of servicing.

 

Section 7.04. Notification to Noteholders and Rating Agencies.  Upon any notice of a Servicer Termination Event or upon any termination of, or any appointment of a successor to, the Servicer pursuant to this Article, the Indenture Trustee shall give prompt written notice thereof to the Noteholders and the Rating Agencies.

 

Section 7.05. Waiver of Past Servicer Termination Events.  The Noteholders evidencing not less than 51% of the Note Balance of the Controlling Class may, on behalf of all Noteholders, waive any Servicer Termination Event and its consequences, except an event resulting from the failure to make any required deposits to or payments from the Accounts in accordance with this Agreement.  Upon any such waiver of a Servicer Termination Event, such event shall cease to exist, and shall be deemed to have been remedied for every purpose of this Agreement.  No such waiver shall extend to any subsequent or other event or impair any right arising therefrom, except to the extent expressly so waived.

 

Section 7.06. Repayment of Advances.  If the identity of the Servicer shall change, the outgoing Servicer shall be entitled to receive reimbursement for outstanding and unreimbursed Advances made pursuant to Section 4.06 by the outgoing Servicer.

 

 

 

  

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ARTICLE EIGHT

 

TERMINATION

 

Section 8.01. Optional Purchase of All Receivables.

 

(a) If, as of the last day of any Collection Period, the Pool Balance shall be less than or equal to [10]% of the Cutoff Date Pool Balance, the Servicer shall have the option to purchase on the following Distribution Date the Trust Estate, other than the Accounts.  To exercise such option, the Servicer shall notify the Depositor, the Owner Trustee, the Indenture Trustee and the Rating Agencies, not fewer than ten nor more than 30 days prior to the Distribution Date on which such repurchase is to be effected and shall deposit into the Collection Account on the related Deposit Date an amount equal to the aggregate Purchase Amount for the Receivables (including Receivables that became Defaulted Receivables during the related Collection Period), less the Reserve Fund Amount, which funds shall be transferred from the Reserve Fund into the Collection Account.  Notwithstanding the foregoing, the Servicer shall not be permitted to exercise such option unless the amount to be deposited in the Collection Account (together with amounts on deposit in the Reserve Fund and the Collection Account) pursuant to this Section is at least equal to the sum of all amounts due to the Servicer under this Agreement plus the Note Balance plus all accrued but unpaid interest (including any overdue interest) on the Notes plus all amounts due to the Servicer for any outstanding and unreimbursed Advances and Nonrecoverable Advances plus all accrued but unpaid Total Trustee Fees.  Upon such payment, the Seller shall succeed to and own all interests in and to the Issuer.  The aggregate amount so deposited in respect of such Distribution Date, plus, to the extent necessary, all amounts in the Reserve Fund, if any, shall be used to make payments in full to the Noteholders in the manner set forth in Article Four.

 

(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 shall succeed to the rights of the Noteholders hereunder and the Indenture Trustee shall continue to carry out its obligations hereunder with respect to the Certificateholders, including making distributions from the Collection Account in accordance with Section 4.08(c) and making withdrawals from the Reserve Fund in accordance with Sections 4.02 and 4.07.

 

Section 8.02. Termination.  Notwithstanding anything in this Agreement to the contrary, this Agreement shall terminate upon the earliest to occur of (i) the maturity or liquidation of the latest maturing Receivable and the disposition of any amounts received thereon in accordance with Section 2.08 of the Indenture, (ii) the payment to the Noteholders and the Certificateholders of all amounts required to be paid to them under the Basic Documents and (iii) the exercise by the Servicer of its rights under Section 8.01, the deposit into the Collection Account by the Servicer of the amount required to be deposited therein in accordance with Section 8.01 and the application of such amounts in accordance with Section 2.08 of the Indenture.

 

 

 

  

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ARTICLE NINE

 

EXCHANGE ACT REPORTING

 

Section 9.01. Further Assurances.  The Indenture Trustee and the Servicer shall reasonably cooperate with the Depositor in connection with the satisfaction of the Depositor’s reporting requirements under the Exchange Act with respect to the Issuer.  The Depositor shall not exercise its right to request delivery of information or other performance under these provisions other than in good faith.  In addition to the other information specified in this Article Nine, if so requested by the Depositor for the purpose of satisfying its reporting obligation under the Exchange Act, the Indenture Trustee and the Servicer shall provide the Depositor with (i) such information which is available to such Person without unreasonable effort or expense and within such timeframe as may be reasonably requested by the Depositor to comply with the Depositor’s reporting obligations under the Exchange Act and (ii) to the extent such Person is a party (and the Depositor is not a party) to any agreement or amendment required to be filed, copies of such agreement or amendment in EDGAR-compatible form.  Each of the Servicer and the Indenture Trustee acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Depositor in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB.

 

Section 9.02. Form 10-D Filings.  So long as the Depositor is required to file Exchange Act Reports with respect to the Issuer, no later than each Determination Date, each of the Indenture Trustee and the Servicer shall notify (and the Servicer shall cause any subservicer to notify) the Depositor of any Form 10-D Disclosure Item with respect to such Person (or in the case of the Indenture Trustee, a Responsible Officer of such Person), together with a description of any such Form 10-D Disclosure Item in form and substance reasonably acceptable to the Depositor.  In addition to such information as the Servicer is obligated to provide pursuant to other provisions of this Agreement, if so requested by the Depositor, the Servicer shall provide such information which is available to the Servicer, without unreasonable effort or expense regarding the performance or servicing of the Receivables as is reasonably required to facilitate preparation of distribution reports in accordance with Item 1121 of Regulation AB.  Such information shall be provided concurrently with the statements to Securityholders pursuant to Section 4.09, commencing with the first such report due not less than five Business Days following such request.

 

Section 9.03. Form 8-K Filings.  So long as the Depositor is required to file Exchange Act Reports with respect to the Issuer, each of the Indenture Trustee and the Servicer shall promptly notify the Depositor, but in no event later than two Business Days after its occurrence, of any Reportable Event of which such Person (or in the case of the Indenture Trustee, a Responsible Officer of such Person) has actual knowledge.  Each Person shall be deemed to have actual knowledge of any such event to the extent that it relates to such Person or any action or failure to act by such Person.

 

Section 9.04. Form 10-K Filings.  So long as the Depositor is required to file Exchange Act Reports, (i) if the Item 1119 Parties listed on Schedule B have changed since the Closing

 

 

 

  

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Date, no later than February 1 of each year, commencing in [_____], the Depositor shall provide each of the Indenture Trustee and the Servicer with an updated Schedule B setting forth the Item 1119 Parties and (ii) no later than March 15 of each year, commencing in [_____], the Indenture Trustee and the Servicer shall notify the Depositor of any Form 10-K Disclosure Item, together with a description of any such Form 10-K Disclosure Item in form and substance reasonably acceptable to the Depositor.

 

Section 9.05. Report on Assessment of Compliance and Attestation.  So long as the Depositor is required to file Exchange Act Reports, on or before March 15 of each calendar year, commencing in [_____]:

 

(a) The Indenture Trustee shall deliver to the Depositor and the Servicer the Servicing Criteria Assessment.  Such report shall be signed by an authorized officer of the Indenture Trustee and shall at a minimum address each of the Servicing Criteria specified on a certification substantially in the form of Part I of Schedule C hereto delivered to the Depositor concurrently with the execution of this Agreement (provided that such certification may be revised after the date of this Agreement as agreed by the Depositor and the Indenture Trustee to reflect any guidance with respect to such criteria from the Commission).  To the extent any of the Servicing Criteria are not applicable to the Indenture Trustee, with respect to asset-backed securities transactions taken as a whole involving the Indenture Trustee and that are backed by the same asset type backing the Notes, such report shall include such a statement to that effect.  The Indenture Trustee acknowledges and agrees that the Depositor and the Servicer with respect to its duties as the Certifying Person, and each of their respective officers and directors shall be entitled to rely upon each such Servicing Criteria Assessment and the attestation delivered pursuant to Section 9.05(b).

 

(b) The Indenture Trustee shall deliver to the Depositor and the Servicer a report of a registered public accounting firm that attests to, and reports on, the assessment of compliance made by the Indenture Trustee and delivered pursuant to the preceding paragraph.  Such attestation shall be in accordance with Rules 13a-18 and 15d-18 of the Exchange Act (or any successor provisions), Rules 1-02(a)(3) and 2-02(g) of Regulation S-X (or any successor provisions) under the Securities Act and the Exchange Act, including, that, in the event that an overall opinion cannot be expressed, such registered public accounting firm shall state in such report why it was unable to express such an opinion.  Such report must be available for general use and not contain restricted use language.

 

(c) In the event the Indenture Trustee is terminated or resigns during the term of this Agreement, such Person shall provide the documents and information pursuant to this Section with respect to the period of time it was subject to this Agreement or provided services with respect to the Issuer or the Receivables.

 

Section 9.06. Back-up Sarbanes-Oxley Certification.

 

(a) No later than March 15 of each year, beginning in [_____], the Servicer shall provide the Performance Certification to the Certifying Person as Schedule D (in the case of the

 

 

 

  

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Servicer), in each case on which the Certification Parties can reasonably rely; provided that so long as the Servicer is an Affiliate of the Depositor, the Servicer may, but is not required to deliver the Performance Certificate.

 

(b) The Depositor will not request delivery of a certification under this clause unless the Depositor is required under the Exchange Act to file an annual report on Form 10-K with respect to the Issuer.  In the event that prior to the filing date of the Form 10-K in March of each year, the Servicer has actual knowledge of information material to the Sarbanes-Oxley Certification, the Servicer shall promptly notify the Depositor.

 

Section 9.07. Representations and Warranties.  The Indenture Trustee represents that:

 

(i) there are no affiliations relating to the Indenture Trustee with respect to any Item 1119 Party;

 

(ii) there are no relationships or transactions with respect to any Item 1119 Party and the Indenture Trustee that are outside the ordinary course of business or on terms other than would be obtained in an arm’s-length transaction with an unrelated third party, apart from the transactions contemplated under the Basic Documents, and that are material to the investors’ understanding of the Notes; and

 

(iii) there are no legal Proceedings pending, or known to be contemplated by Governmental Authorities, against the Indenture Trustee, or of which the property of the Indenture Trustee is subject, that is material to the Noteholders.

 

Section 9.08. Indemnification.

 

(a) Each of the Indenture Trustee and the Servicer (if the Servicer is not MBFS USA) shall indemnify the Depositor, the Servicer with respect to its duties as Certifying Person or each Person who controls any of such parties (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and the respective present and former directors, officers, employees and agents of each of the foregoing, and shall hold each of them harmless from and against any losses, damages, penalties, fines, forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and expenses that any of them may sustain arising out of or based upon:

 

(i) (A) any untrue statement of a material fact contained or alleged to be contained in the Provided Information or (B) the omission or alleged omission to state in the Provided Information a material fact required to be stated in the Provided Information, or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, by way of clarification, that clause (B) shall be construed solely by reference to the related Provided Information and not to any other information communicated in connection with a sale or purchase of securities, without regard to whether the Provided Information or any portion thereof is presented together with or separately from such other information; or

 

(ii) with respect to the Indenture Trustee, any failure by the Indenture Trustee to deliver any Servicing Criteria Assessment when and as required under this Article and

 

 

 

  

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with respect to the Servicer, any failure by the Servicer to deliver any information, report, certification, accountant’s letter or other material when and as required under Section 3.11 or 3.12 or this Article, as applicable.

 

(b) In the case of any failure of performance described in Section 9.08(a)(ii), each of the Indenture Trustee and the Servicer shall promptly reimburse the Depositor for all costs reasonably incurred by each such party in order to obtain the information, report, certification, accountants’ letter or other material not delivered as required by the Indenture Trustee or the Servicer, as applicable.

 

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

 

 

 

  

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ARTICLE TEN

 

MISCELLANEOUS

 

Section 10.01. Amendment.

 

(a) This Agreement may be amended from time to time by the parties hereto without the consent of any of the Noteholders to cure any ambiguity, to correct or supplement any provision in this Agreement that may be inconsistent with any other provisions in this Agreement or any offering document used in connection with the initial offer and sale of the Notes, to add, change or eliminate any other provisions with respect to matters or questions arising under this Agreement that are not inconsistent with the provisions of this Agreement; provided, however, that no such amendment (i) may materially adversely affect the interests of any Noteholder, as evidenced by either an Opinion of Counsel to the Servicer delivered to the Indenture Trustee [or by a letter from each Rating Agency to the effect that the amendment would not result in a qualification, downgrading or withdrawal of its then-current rating of any Class of Notes] and (ii) will be permitted unless an Opinion of Counsel is delivered to the Depositor and the Trustees to the effect that such amendment will not cause the Issuer to be characterized for federal income tax purposes as an association taxable as a corporation or otherwise have any material adverse impact on the federal income taxation of any Notes Outstanding. Any amendment which affects the Owner Trustee, however, shall require the Owner Trustee’s written consent.

 

(b) This Agreement may also be amended from time to time by the parties hereto, with the consent of the Indenture Trustee and the Holders of Notes evidencing at least 662⁄3% of the Note Balance of the Controlling Class (or if the Notes are no longer Outstanding, Holders of Certificates evidencing not less than 51% of the aggregate 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; provided, however, that no such amendment (i) will be permitted unless an Opinion of Counsel is delivered to the Depositor and the Trustees to the effect that such amendment will not cause the Issuer to be characterized for federal income tax purposes as an association or publicly traded partnership taxable as a corporation or otherwise have any material adverse impact on the federal income taxation of any Notes Outstanding or any Noteholder and (ii) may (A) increase or reduce in any manner the amount of, or accelerate or delay the timing of, or change the allocation or priority of, collections of payments on or in respect of the Receivables or distributions that are required to be made for the benefit of the Noteholders or change any Interest Rate or the Reserve Fund Required Amount without the consent of 100% of the Noteholders of Notes then Outstanding or (B) reduce the percentage of the Note Balance of the Controlling Class, the consent of the Noteholders of which is required for any amendment to this Agreement without the consent of 100% of the Noteholders of Notes then Outstanding.  Any amendment which affects the Owner Trustee, however, shall require the Owner Trustee’s written consent.

 

(c) An amendment to this Agreement shall be deemed not to materially adversely affect the interests of any Noteholder if the Person requesting such amendment obtains and delivers to the Trustees (i) an Opinion of Counsel to that effect or (ii) a letter from each Rating Agency to the effect that the amendment would not result in a qualification, downgrading or withdrawal of its then-current rating of any Class of the Notes.

 

 

 

  

41

  

(d) Prior to the execution of any amendment or consent pursuant to this Section, the Servicer shall provide written notification of the substance of such amendment or consent to each Rating Agency.

 

(e) Promptly after the execution of any amendment or consent pursuant to Section 10.01(b), the Owner Trustee shall furnish (i) written notification of the substance of such amendment or consent to each Certificateholder.  It shall not be necessary for the consent of the Noteholders pursuant to Section 10.01(b) to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents (and any other consents of the Noteholders provided for in this Agreement) and of evidencing the authorization of the execution thereof by the Noteholders shall be subject to such reasonable requirements as the Trustees may prescribe.

 

(f) Prior to the execution of any amendment pursuant to this Section, the Depositor and the Trustees shall be entitled to receive and rely upon (i) an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and (ii) an Officer’s Certificate of the Servicer that all conditions precedent provided for in this Agreement to the execution of such amendment have been complied with.  The Owner Trustee or the Indenture Trustee may, but shall not be obligated to, enter into any such amendment which affects such Owner Trustee’s or Indenture Trustee’s own rights, duties or immunities under this Agreement or otherwise.

 

(g) Notwithstanding the foregoing provisions of this Section, in the event the parties to this Agreement desire to further clarify or amend any provision of Article Nine, or subject to Section 9.05(a), the information contained in Schedule C, this Agreement shall be amended to reflect the new agreement between the parties covering matters in Article Nine, pursuant to Section 9.01, or Schedule C; provided, however, that (i) such amendment will not require any Opinion of Counsel or any letter from a Rating Agency to the effect that the amendment would not result in a qualification, downgrading or withdrawal of its then-current rating of any Class of Notes or the consent of any Securityholder and (ii) the Servicer shall have given written notice to the Rating Agencies not fewer than ten days prior to the effectiveness of any such amendment.

 

Section 10.02. Protection of Title to Issuer.

 

(a) The Depositor or the Servicer, or both, shall authorize and file such financing statements and cause to be authorized and 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 interest of the Issuer and of the Indenture Trustee for the benefit of the Noteholders in the Receivables and in the proceeds thereof.  The Depositor or the Servicer, or both, shall deliver (or cause to be delivered) to the Trustees file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing.

 

(b) Neither the Depositor nor the Servicer shall change its name, identity or organizational structure in any manner that would make any financing statement or continuation statement filed in accordance with Section 10.02(a) seriously misleading within the meaning of Section 9-506 of the UCC, unless it shall have given the Trustees at least 30 days’ prior written notice thereof and shall have promptly filed such amendments to previously filed financing

 

 

 

  

42

  

statements or continuation statements or such new financing statements as may be necessary to continue the perfection of the interest of the Issuer and the Indenture Trustee for the benefit of the Noteholders in the Receivables and the proceeds thereof.

 

(c) Each of the Seller, the Depositor and the Servicer shall give the Trustees at least 30 days’ prior written notice of any change in its name, identity, organizational structure or jurisdiction of organization or any relocation of its principal place of business or chief executive office if, as a result of such change or relocation, the applicable provisions of the UCC would require the filing of any amendment to any previously filed financing statement or continuation statement or of any new financing statement and shall promptly file any such amendment, continuation statement or new financing statement.  The Depositor shall at all times maintain its jurisdiction of organization, its principal place of business and its chief executive office within the United States.  The Servicer shall at all times maintain each office from which it shall service Receivables, and each office at which the Receivable Files are located, within the United States.

 

(d) The Servicer shall 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.

 

(e) The Servicer shall maintain its computer systems so that, from and after the time of transfer of the Receivables to the Issuer pursuant to this Agreement, the Servicer’s master computer records (including any back-up archives) that refer to a Receivable shall indicate clearly and unambiguously the interest of the Issuer and the Indenture Trustee in such Receivable and that such Receivable is owned by the Issuer and has been pledged to the Indenture Trustee pursuant to the Indenture.  Indication of the Issuer’s and the Indenture Trustee’s interest in a Receivable shall be deleted from or modified on the Servicer’s computer systems when, and only when, such Receivable shall have been paid in full or repurchased by the Seller or purchased by the Servicer.

 

(f) If at any time the Depositor or the Servicer shall propose to sell, grant a security interest in, or otherwise transfer any interest in any motor vehicle installment sales or installment loans contract to any prospective purchaser, lender or other transferee, the Servicer shall give to such prospective purchaser, lender or other transferee computer tapes, CDs, records or printouts (including any restored from back-up archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly and unambiguously that such Receivable has been sold and is owned by the Issuer and has been pledged to the Indenture Trustee (unless such Receivable has been paid in full or repurchased by the Seller or purchased by the Servicer).

 

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

 

(h) If the Seller has repurchased one or more Receivables from the Issuer pursuant to Section 2.05 or the Servicer has purchased one or more Receivables from the Issuer pursuant to

 

 

 

  

43

  

Section 3.08, the Servicer shall, upon request, furnish to the Owner Trustee or to the Indenture Trustee, within ten Business Days, a list of all Receivables (by contract number) then held as part of the Issuer, together with a reconciliation of such list to the Schedule of Receivables (as amended or supplemented to date) and to each of the Investor Reports furnished before such request indicating removal of Receivables from the Issuer.

 

(i) The Servicer shall deliver to the Depositor and the Trustees, promptly after the authorization and delivery of each amendment to any financing statement delivered pursuant to this Agreement, an Opinion of Counsel stating that, in the opinion of such counsel, either (A) all financing statements and continuation statements have been authorized and filed that are necessary fully to preserve and protect the interest of the Depositor (in the case of an opinion delivered by the Servicer) or the Issuer and the Indenture Trustee (in the case of an opinion delivered by the Depositor) in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) no such action shall be necessary to preserve and protect such interest.

 

(j) The Depositor shall, to the extent required by Applicable Law, cause the Notes to be registered with the Commission pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time periods specified in such sections.

 

Section 10.03. Notices.  Unless otherwise specified in this Agreement, all notices, requests, demands, consents, waivers or other communications to or from the parties to this Agreement will be in writing.  Notices, requests, demands, consents and other communications will be deemed to have been given and made, (i) upon delivery or, in the case of a letter mailed via registered first class mail, postage prepaid, three days after deposit in the mail and (ii) in the case of (a) a facsimile, when receipt is confirmed by telephone or by reply e-mail or reply facsimile from the recipient, (b) an e-mail, when receipt is confirmed by telephone or by reply e-mail from the recipient and (c) an electronic posting to a password-protected website, upon printed confirmation of the recipient’s access to such password-protected website, or when notification of such electronic posting is confirmed in accordance with clauses (ii)(b) through (ii)(c) above.  Unless otherwise specified in this Agreement, any such notice, request, demand, consent or other communication will be delivered or addressed, in the case of (i) the Depositor, at 36455 Corporate Drive, Farmington Hills, Michigan  48331, Attention: [__________] [_________], telecopier: [__________], (ii) the Seller, at 36455 Corporate Drive, Farmington Hills, Michigan  48331, Attention: [__________] [________], telecopier: [__________], (iii) the Servicer, at 36455 Corporate Drive, Farmington Hills, Michigan  48331, Attention: [__________] [__________], telecopier: [__________], (iv) the Issuer or the Owner Trustee, at the Corporate Trust Office, Attention: [__________________________], (v) the Indenture Trustee, at the Corporate Trust Office, Attention: [_________________], and (vi) as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

 

Section 10.04. Assignment.

 

(a) Notwithstanding anything to the contrary contained herein, except as provided in the remainder of this Section or as provided in Sections 6.03 and 7.02, this Agreement may not

 

 

 

  

44

  

be assigned by the Depositor or the Servicer without the prior written consent of the Trustees and the Holders of Notes evidencing at least 662⁄3% of the Note Balance of the Controlling Class.

 

(b) The Depositor hereby acknowledges and consents to the mortgage, pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of all right, title and interest of the Issuer in, to and under the Trust Property and the assignment of any or all of the Issuer’s rights and obligations hereunder to the Indenture Trustee.

 

Section 10.05. Severability.  If any one or more of the covenants, agreements, provisions or terms of this Agreement is held invalid, illegal or unenforceable, then such covenants, agreements, provisions or terms will be deemed severable from the remaining covenants, agreements, provisions and terms of this Agreement and will in no way affect the validity, legality or enforceability of the other covenants, agreements, provisions and terms of this Agreement.

 

Section 10.06. Further Assurances.  The Servicer agrees to do and perform any and all acts and to execute any and all further instruments required or reasonably requested by the other parties hereto to more fully effect the purposes of this Agreement, including the execution of any financing statements or continuation statements relating to the Trust Estate for filing under the provisions of the UCC of any applicable jurisdiction.

 

Section 10.07. No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Depositor, either 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 provided in this Agreement are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.

 

Section 10.08. Successors and Assigns; Third-Party Beneficiaries.  This Agreement will inure to the benefit of and be binding upon the parties to this Agreement, the Owner Trustee and their assigns.  Except as otherwise provided in this Agreement, no other Person will have any right or obligation under this Agreement.

 

Section 10.09. Actions by Securityholders.

 

(a) Wherever in this Agreement a provision is made that an action may be taken or a notice, demand or instruction given by the Noteholders or the Certificateholders, such action, notice or instruction may be taken or given by any Noteholder or any Certificateholder, as applicable, unless such provision requires a specific percentage of the Noteholders or the Certificateholders.

 

(b) Any request, demand, authorization, direction, notice, consent, waiver or other act by a Noteholder or a Certificateholder shall bind such Noteholder or Certificateholder and every subsequent Holder of the related Note or Certificate issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or omitted to be done by the Owner Trustee, the Indenture Trustee or the Servicer in reliance thereon, whether or not notation of such action is made upon such Note or Certificate.

 

 

 

  

45

  

Section 10.10. Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be an original, and all of which will together constitute one and the same instrument.

 

Section 10.11. Table of Contents and Headings.  The Table of Contents and the various headings in this Agreement are included for convenience only and will not affect the meaning or interpretation of any provision of this Agreement.

 

Section 10.12. GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 10.13. No Petition.  Each of the Seller, the Servicer and the Trustees covenants and agrees that it will not at any time institute against, or join any Person in instituting against, the Issuer or the Depositor any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings, or other Proceedings under any Insolvency Law in connection with any obligations relating to any of the Basic Documents and agrees that it will not cooperate with or encourage others to file a bankruptcy petition against the Issuer during the same period.

 

Section 10.14. No Recourse.  It is expressly understood and agreed by the parties hereto that (i) this Agreement is executed and delivered by the Owner Trustee, not individually or personally but solely as Owner Trustee, in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by the Owner Trustee but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein contained shall be construed as creating any liability on the Owner Trustee, individually or personally, to perform any covenant 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 the parties hereto and (iv) under no circumstances shall the Owner Trustee be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Agreement or any other related documents.

 

Section 10.15. Servicer Payment Obligation.  The Servicer shall be responsible for the payment of all fees and expenses of the Issuer and the Trustees paid by any of them in connection with any of their obligations under the Basic Documents to obtain or maintain or cause to be obtained or maintained any required license under the (i) Maryland Vehicle Sales Finance Act or (ii) Pennsylvania Motor Vehicle Sales Finance Act.

 

 

 

  

46

  

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

 

 

 

	 	
MERCEDES-BENZ AUTO RECEIVABLES 

        TRUST 200[_]-[_]

	 

 

	
  

	 By:	
[_________________], not in its individual 

capacity but solely as Owner Trustee in behalf

of the Issuer

 

	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 
	 	 	Title:   	 
	 	 	 	 

 

	 	
DAIMLER RETAIL RECEIVABLES LLC, 

        as Depositor

	 

 

	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: [______________]	 
	 	 	Title:   	 
	 	 	 	 

 

	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: [_______________]	 
	 	 	Title: [_______________]  	 
	 	 	 	 

 

	
  

	

MERCEDES-BENZ FINANCIAL SERVICES 

        USA LLC, as Servicer

 

	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: [_______________]	 
	 	 	Title: [_______________]  	 
	 	 	 	 

 

 

	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: [_______________]	 
	 	 	Title: [_______________]  	 
	 	 	 	 

 

 

Sale and Servicing Agreement

  

  

 

 

	
  

	

MERCEDES-BENZ FINANCIAL SERVICES 

        USA LLC, as Servicer

 

	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: [_______________]	 
	 	 	Title: [_______________]  	 
	 	 	 	 

 

 

	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: [_______________]	 
	 	 	Title: [_______________]  	 
	 	 	 	 

 

Agreed and Accepted:

 

[_________________]

 

	 	 	 
	
By:

	
 

	 
	
 

	
Name:

	 
	
 

	
Title:

	 

 

 

Sale and Servicing Agreement

 

  

  

  

SCHEDULE A

 

LOCATION OF RECEIVABLE FILES

 

 

  

  

SA-1

  

SCHEDULE B

 

ITEM 1119 PARTIES

 

 

 

 

 

  

SB-1

  

  

SCHEDULE C

 

SERVICING AND DISCLOSURE ITEMS

 

Schedule C

 

Part I – Servicing Criteria (To Be Addressed in the Report on Assessment of Compliance)

 

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

 

	
Reg AB Reference

	
Servicing Criteria

	
Applicable Servicing 

Criteria

	
Responsible Party

	  	
General Servicing Considerations

	  	  
	
1122(d)(1)(i)

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

	  	
Servicer

 

	
1122(d)(1)(ii)

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

	  	
Servicer

 

	
1122(d)(1)(iii)

	
Any requirements in the transaction agreements to maintain a back-up Servicer for the Pool Assets are maintained.

	
N/A

 

	  
	
1122(d)(1)(iv)

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

	
N/A

	  
	  	
Cash Collection and Administration

	  	  
	
1122(d)(2)(i)

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

	  	
Servicer

 

	
1122(d)(2)(ii)

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

	
N/A for Obligor 

disbursements.

	
Servicer

	
1122(d)(2)(iii)

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

	  	
Servicer

 

	
1122(d)(2)(iv)

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

	  	
Servicer

Indenture Trustee

 

 

 

  

SC-1

  

 

 

	
Reg AB Reference

	
Servicing Criteria

	
Applicable Servicing 

Criteria

	
Responsible Party

	
1122(d)(2)(v)

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

	  	
Indenture Trustee

 

	
1122(d)(2)(vi)

	
Unissued checks are safeguarded so as to prevent unauthorized access.

	
N/A

	  
	
1122(d)(2)(vii)

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

	  	
Servicer

Indenture Trustee

	  	
Investor Remittances and Reporting

	  	  
	
1122(d)(3)(i)

	
Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements.  Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of Pool Assets serviced by the Servicer.

	  	
Servicer

 

	
1122(d)(3)(ii)

	
Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.

	  	
Indenture Trustee

	
1122(d)(3)(iii)

	
Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.

	  	
Indenture Trustee

 

	
1122(d)(3)(iv)

	
Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.

	  	
Indenture Trustee

 

 

  

SC-2

  

 

 

	
Reg AB Reference

	
Servicing Criteria

	
Applicable Servicing 

Criteria

	
Responsible Party

	  	
Pool Asset Administration

	  	  
	
1122(d)(4)(i)

	
Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.

	  	
Servicer

	
1122(d)(4)(ii)

	
Pool assets  and related documents are safeguarded as required by the transaction agreements

	  	
Servicer

	
1122(d)(4)(iii)

	
Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.

	  	
Servicer

 

	
1122(d)(4)(iv)

	
Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt and identification, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.

	  	
Servicer

	
1122(d)(4)(v)

	
The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.

	  	
Servicer

	
1122(d)(4)(vi)

	
Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.

	  	
Servicer

 

	
1122(d)(4)(vii)

	
Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.

	  	
Servicer

 

	
1122(d)(4)(viii)

	
Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements.  Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).

	  	
Servicer

	
1122(d)(4)(ix)

	
Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.

	
N/A

	  

 

 

  

SC-3

  

 

 

	
Reg AB Reference

	
Servicing Criteria

	
Applicable Servicing 

Criteria

	
Responsible Party

	
1122(d)(4)(x)

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

	
N/A

	  
	
1122(d)(4)(xi)

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

	
N/A

	  
	
1122(d)(4)(xii)

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

	
N/A

	  
	
1122(d)(4)(xiii)

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

	
N/A

	  
	
1122(d)(4)(xiv)

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

	  	
Servicer

	
1122(d)(4)(xv)

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

	
N/A

	  

 

 

SC-4  

  

  

Schedule C

 

Part II - Form 10-D Disclosure Items

 

	
FORM 10-D DISCLOSURE ITEMS

 

	
Item on Form 10-D

	
Responsible Party

	
Item 1: Distribution and Pool Performance Information

 

	  
	
Information included in the Monthly Investor Report

	
Servicer

Administrator

 

	
Any information required by 1121 which is NOT included on the Monthly Investor Report

 

	
Depositor

	
Item 2: Legal Proceedings

 

· Any legal Proceeding pending against the following entities or their respective property, that is material to Certificateholders, including any Proceeding known to be contemplated by governmental authorities:

	  
	
· Issuing Entity (Trust Fund)

	
Depositor

	
· Sponsor (Seller)

	
Seller (if a party to the Sales and Servicing Agreement) or Depositor

	
· Depositor

	
Depositor

	
· Indenture Trustee

	
Indenture Trustee

	
· Administrator

	
Administrator

	
· Servicer

	
Servicer

	
· Owner Trustee

	
Owner Trustee

	
· 1110(b) Originator

	
Depositor

	
· Any 1108(a)(2) Servicer (other than the Servicer or Administrator)

	
Depositor

	
· Any other party contemplated by 1100(d)(1)

 

	
Depositor

	
Item 3: Sale of Securities and Use of Proceeds

 

Information from Item 2(a) of Part II of Form 10-Q

 

With respect to any sale of securities by the sponsor, depositor or issuing entity, that are backed by the same asset pool or are otherwise issued by the issuing entity, whether or not registered, provide the sales and use of proceeds information in Item 701 of Regulation S-K.  Pricing information can be omitted if securities were not registered.

 

	
Depositor

	
Item 4: Defaults Upon Senior Securities

 

Information from Item 3 of Part II of Form 10-Q

 

Report the occurrence of any Event of Default (after expiration of any grace period and provision of any required notice)

 

	
Administrator

 

	
Item 5: Submission of Matters to a Vote of Security Holders

 

Information from Item 4 of Part II of Form 10-Q

 

	
Administrator

Indenture Trustee

 

 

  

SC-5

  

 

 

	
FORM 10-D DISCLOSURE ITEMS

 

	
Item on Form 10-D

	
Responsible Party

	
Item 6: Significant Obligors of Pool Assets

 

Item 1112(b) – Significant Obligor Financial Information*

 

	
Depositor

	
*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Item.

 

	  
	
Item 7: Significant Enhancement Provider Information

 

Item 1114(b)(2) – Credit Enhancement Provider Financial Information*

 

	  
	
· Determining applicable disclosure threshold

	
Depositor

	
· Requesting required financial information (including any required accountants’ consent to the use thereof) or effecting incorporation by reference

 

	
Depositor

 

	
Item 1115(b) – Derivative Counterparty Financial Information*

 

	  
	
· Determining current maximum probable exposure

	
Depositor

	
· Determining current significance percentage

	
Depositor

	
· Requesting required financial information (including any required accountants’ consent to the use thereof) or effecting incorporation by reference

 

	
Depositor

 

	
*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Items.

 

	  
	
Item 8: Other Information

 

Disclose any information required to be reported on Form 8-K during the period covered by the Form 10-D but not reported

 

	
Any party responsible for the applicable Form 8-K 

Disclosure item

	
Item 9: Exhibits

	  
	
 

Monthly Statement to Certificateholders

 

	
Administrator

	
Exhibits required by Item 601 of Regulation S-K, such as material agreements

 

	
Depositor

 

  

SC-6  

  

Schedule C

 

Part III - Form 10-K Disclosure Items

 

	
FORM 10-K DISCLOSURE ITEMS

	
Item on Form 10-K

	
Responsible Party

	
Item 1B: Unresolved Staff Comments

 

	
Depositor

	
Item 9B: Other Information

	
Any party responsible for disclosure items on Form 8-K

	
Item 15: Exhibits, Financial Statement Schedules

	
Depositor

	
Additional Item:

Disclosure per Item 1117 of Reg AB

	
(i) All parties to the Sale and Servicing Agreement (as to themselves), (ii) the Depositor as to the issuing entity, (iii) the Depositor as to the sponsor, any 1106(b) originator, any 1100(d)(1) party

	
Additional Item:

Disclosure per Item 1119 of Reg AB

	
(i) All parties to the Sale and Servicing Agreement (as to themselves), (ii) the Depositor as to he sponsor, originator, significant obligor, enhancement or support provider

	
Additional Item:

Disclosure per Item 1112(b) of Reg AB

	
Depositor/ Servicer

	
Additional Item:

Disclosure per Items 1114(b) and 1115(b) of Reg AB

 

	
Depositor

 

  

SC-7  

  

Schedule C

 

Part IV - Form 8-K Disclosure (Reportable Events)

 

	
FORM 8-K DISCLOSURE (REPORTABLE EVENTS)

 

	
Item on Form 8-K

	
Responsible Party

 

	
Item 1.01- Entry into a Material Definitive Agreement

 

Disclosure is required regarding entry into or amendment of any definitive agreement that is material to the securitization, even if depositor is not a party.

 

Examples: servicing agreement, custodial agreement.

 

Note: disclosure not required as to definitive agreements that are fully disclosed in the prospectus.

 

	
All parties as to themselves

	
Item 1.02- Termination of a Material Definitive Agreement

 

Disclosure is required regarding termination of any definitive agreement that is material to the securitization (other than expiration in accordance with its terms), even if depositor is not a party.

 

Examples: servicing agreement, custodial agreement.

 

	
All parties as to themselves

	
Item 1.03- Bankruptcy or Receivership

 

Disclosure is required regarding the bankruptcy or receivership, with respect to any of the following:

 

	
Depositor

	
· Sponsor (Seller)

	
Depositor/Sponsor (Seller)

	
· Depositor

	
Depositor

	
· Servicer

	
Servicer

	
· Affiliated Servicer

	
Servicer

	
· Other Servicer servicing 20% or more of the pool assets at the time of the report

	
Servicer

	
· Other material servicers

	
Servicer

	
· Indenture Trustee

	
Indenture Trustee

	
· Administrator

	
Administrator

	
· Significant Obligor

	
Depositor

	
· Credit Enhancer (10% or more)

	
Depositor

	
· Derivative Counterparty

	
Depositor

	
· Owner Trustee

 

	
Owner Trustee

	
Item 2.04- Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

 

Includes an early amortization, performance trigger or other event, including event of default, that would materially alter the payment priority/distribution of cash flows/amortization schedule.

 

Disclosure will be made of events other than waterfall triggers which are disclosed in the monthly statements to the certificateholders.

 

	
Depositor

Servicer

Administrator

 

 

  

SC-8

  

 

 

	
FORM 8-K DISCLOSURE (REPORTABLE EVENTS)

 

	
Item on Form 8-K

	
Responsible Party

 

	
Item 3.03- Material Modification to Rights of Security Holders

 

Disclosure is required of any material modification to documents defining the rights of Certificateholders, including the Pooling and Servicing Agreement.

 

	
Administrator

Indenture Trustee

Depositor

	
Item 5.03- Amendments of Articles of Incorporation or Bylaws; Change of Fiscal Year

 

Disclosure is required of any amendment “to the governing documents of the issuing entity”.

 

	
Depositor

	
Item 6.01- ABS Informational and Computational Material

	
Depositor

	
Item 6.02- Change of Servicer or Administrator

 

Requires disclosure of any removal, replacement, substitution or addition of any Servicer, affiliated servicer, and other servicer servicing 10% or more of pool assets at time of report, other material servicers or Indenture Trustee.

 

	
A change of both – Depositor

 

A change of Servicer or Administrator - 

Servicer/Administrator/Depositor/

 

	
Reg AB disclosure about any new servicer or Servicer is also required.

 

	
Servicer/Depositor

	
Reg AB disclosure about any new Indenture Trustee is also required.

 

	
New Indenture Trustee

	
Item 6.03- Change in Credit Enhancement or External Support

 

Covers termination of any enhancement in manner other than by its terms, the addition of an enhancement, or a material change in the enhancement provided.  Applies to external credit enhancements as well as derivatives.

 

	
N/A

	
Reg AB disclosure about any new enhancement provider is also required.

 

	
Depositor

	
Item 6.04- Failure to Make a Required Distribution

 

	
Servicer

Indenture Trustee

	
Item 6.05- Securities Act Updating Disclosure

 

If any material pool characteristic differs by 5% or more at the time of issuance of the securities from the description in the final prospectus, provide updated Reg AB disclosure about the actual asset pool.

 

	
Depositor

	
If there are any new servicers or originators required to be disclosed under Regulation AB as a result of the foregoing, provide the information called for in Items 1108 and 1110 respectively.

 

	
Depositor

	
Item 7.01- Reg FD Disclosure

 

	
Depositor

 

 

  

SC-9

  

 

 

	
FORM 8-K DISCLOSURE (REPORTABLE EVENTS)

 

	
Item on Form 8-K

	
Responsible Party

 

	
Item 8.01- Other Events

 

Any event, with respect to which information is not otherwise called for in Form 8-K, that the registrant deems of importance to certificateholders.

 

	
Depositor

	
Item 9.01- Financial Statements and Exhibits

	
Responsible party, as applicable, for reporting/disclosing the financial statement or exhibit

 

  

SC-10  

  

SCHEDULE D

 

PERFORMANCE CERTIFICATION

(SERVICER)

 

Re:           Mercedes-Benz Auto Receivables Trust 200[_]-[_]

 

The undersigned Servicer hereby certifies to _______ and its officers, directors and Affiliates (collectively, the “Certification Parties”) as follows, with the knowledge and intent that the Certification Parties will rely on this Certification in connection with the certification concerning the Issuer to be signed by an officer of the Servicer and submitted to the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002:

 

1. I have reviewed:

 

(i) the servicer compliance statement of the Servicer provided in accordance with Item 1123 of Regulation AB (the “Compliance Statement”);

 

(ii) the report on assessment of the Servicer’s compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Item 1122 of Regulation AB (the “Servicing Assessment”);

 

(iii) the registered public accounting firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation Report”); and

 

(iv) all servicing reports, officer’s certificates and other information relating to the servicing of the Receivables by the Servicer during 201__ that were delivered by the Servicer to the Indenture Trustee pursuant to the Agreement (collectively, the “Servicing Information”).

 

2. Based on my knowledge, the Servicing Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which such statements were made, not misleading with respect to the period of time covered by the Servicing Information.

 

3. Based on my knowledge, all of the Servicing Information required to be provided by the Servicer under the Agreement has been provided to the Indenture Trustee.

 

4. I am responsible for reviewing the activities performed by Mercedes-Benz Financial Services USA LLC, as Servicer (the “Servicer”) under the Sale and Servicing Agreement, dated as of [_____], 201[_] (the “Agreement”), among Mercedes-Benz Auto Receivables Trust 200[_]-[_], as issuer (the “Issuer”), Daimler Retail Receivables LLC, as Depositor, Mercedes-Benz Financial Services USA LLC, as Servicer and as Seller and based on

 

 

  

SD-1  

  

my knowledge and the compliance review conducted in preparing the Compliance Statement and except as disclosed in the Compliance Statement, the Servicing Assessment or the Attestation Report, the Servicer has fulfilled its obligations under the Agreement in all material respects.

 

5. The Compliance Statement required to be delivered by the Servicer pursuant to the Agreement, and the Servicing Assessment and Attestation Report required to be provided by the Servicer pursuant to the Agreement, have been provided to the Indenture Trustee.  Any material instances of noncompliance described in such reports have been disclosed to the Depositor.  Any material instance of noncompliance with the Servicing Criteria has been disclosed in such reports.

 

Capitalized terms not otherwise defined herein have the meanings ascribed thereto in the Agreement.

 

Date: ____________________

 

	
  

	

MERCEDES-BENZ FINANCIAL SERVICES 

        USA LLC

 

	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 
	 	 	Title: 	 
	 	 	 	 

 

 

 

  

SD-2  

  

EXHIBIT A

 

REPRESENTATIONS AND WARRANTIES AS TO THE RECEIVABLES

 

 The following representations and warranties shall be made in respect of the Receivables being transferred to the Issuer on the Closing Date as of the Cutoff Date.

 

(i) Characteristics of Receivables.  Each Receivable (a) was originated in the United States by the Seller or a Dealer located in the United States for the retail sale of a Financed Vehicle in the ordinary course of the Seller’s or the applicable Dealer’s business in accordance with the Seller’s credit policies as of the date of origination or acquisition of the related Receivable, is payable in United States dollars, has been fully and properly executed by the parties thereto, if not originated by the Seller, has been purchased by the Seller from such Dealer under an existing Dealer Agreement (or approved form of assignment) and has been validly assigned by such Dealer to the Seller, (b) has created a valid, subsisting and enforceable first priority security interest in favor of the Seller in the Financed Vehicle, which security interest shall be perfected and prior to any other interest in such Financed Vehicle, and which security interest is assignable by the Seller and reassignable by the assignee, (c) contains customary and enforceable provisions such that the rights and remedies of the holder thereof are adequate for realization against the collateral of the benefits of the security, (d) shall, except as otherwise provided in the Sale and Servicing Agreement, provide for level Monthly Payments (provided that the payment in the first or last month in the life of the Receivable may be minimally different from the level payment) that fully amortize the Amount Financed over its original term and shall provide for a finance charge or shall yield interest at its APR, (e) shall provide for, in the event that such Receivable is prepaid, a prepayment that fully pays the Principal Balance and includes accrued but unpaid interest at least through the date prior to the date of prepayment in an amount calculated by using an interest rate at least equal to its APR, (f) is a Simple Interest Receivable, (g) is due from an Obligor with a mailing address within the United States or its territories, and (h)  to the best of the Seller’s knowledge, is not assumable by another Person in a manner which would release the Obligor thereof from such Obligor’s obligations to the Seller with respect to such Receivable.

 

(ii) Schedule of Receivables.  The information set forth in the Schedule of Receivables shall be true and correct in all material respects as of the close of business on the Cutoff Date, and the Receivables were selected (a) from those motor vehicle receivables of the Seller which met the selection criteria set forth in this Agreement and (b) using selection procedures, believed by the Seller, not to be adverse to the Noteholders.

 

(iii) Compliance with Law.  Each Receivable complied at the time it was originated or made, and at the Closing Date complies, in all material respects with all requirements of applicable federal, State and, to the best knowledge of the Seller, local laws, rulings and regulations thereunder (including usury laws).

 

(iv) Binding Obligation.  Each Receivable represents the genuine, legal, valid and binding payment obligation in writing of the related Obligor, enforceable by the holder thereof in accordance with its terms, except as (a) enforceability thereof may be limited by bankruptcy,

 

 

  

A-1  

  

insolvency, reorganization or similar laws affecting the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a Proceeding in equity or at law and (b) such Receivable may be modified by the application after the Cutoff Date of the Servicemembers Civil Relief Act or by any similar applicable State law.

 

(v) No Government Obligor.  No Receivable is due from the United States or any State or any agency, department, subdivision or instrumentality thereof.

 

(vi) Obligor Bankruptcy.  To the best of the Seller’s knowledge, at the Cutoff Date, no Obligor is the subject of a bankruptcy Proceeding.

 

(vii) Security Interest in Financed Vehicles.  Immediately prior to the transfer of the Receivables by the Seller to the Depositor, each Receivable was secured by a valid, binding and enforceable first priority perfected security interest in favor of the Seller in the related Financed Vehicle, which security interest has been validly assigned by the Seller to the Depositor.  The Servicer has received, or will receive within 180 days after the Closing Date, the original certificate of title for each Financed Vehicle or notice from the applicable State entity issuing such certificate of title, that such certificate of title is being processed (other than any Financed Vehicle that is subject to a certificate of title statute or motor vehicle registration law that does not require that the original certificate of title for such Financed Vehicle be delivered to the Seller).

 

(viii) Receivables in Force.  No Receivable shall have been satisfied, subordinated or rescinded, nor shall any Financed Vehicle have been released in whole or in part from the Lien granted by the related Receivable.

 

(ix) No Waivers.  No provision of a Receivable shall have been waived in such a manner that such Receivable fails to meet all of the other representations and warranties made by the Seller herein with respect thereto.

 

(x) No Amendments.  No Receivable shall have been amended or modified in such a manner that the total number of Monthly Payments has been increased or decreased or that the related Amount Financed has been increased or decreased or that such Receivable fails to meet all of the other representations and warranties made by the Seller herein with respect thereto.

 

(xi) No Defenses.  No Receivable is subject to any right of rescission, setoff, counterclaim or defense, including the defense of usury, and the operation of any of the terms of any Receivable, or the exercise of any right thereunder, will not render such Receivable unenforceable in whole or in part or subject to any right of rescission, setoff, counterclaim or defense, including the defense of usury, and the Seller has not received written notice of the assertion with respect to any Receivable of any such right of rescission, setoff, counterclaim or defense.

 

(xii) No Liens.  No Liens or claims shall have been filed, including Liens for work, labor or materials or for unpaid local, State or federal taxes relating to any Financed Vehicle that shall be prior to, or equal or coordinate with, the security interest in such Financed Vehicle granted by the related Receivable.

 

 

  

A-2  

  

(xiii) No Defaults; Repossessions.  Except for payment defaults that, as of the Cutoff Date, have been continuing for a period of not more than 30 days, no default, breach or violation under the terms of any Receivable, permitting acceleration, shall have occurred as of the Cutoff Date and no continuing condition that with notice or the lapse of time or both would constitute a default, breach or violation under the terms of any Receivable, permitting acceleration, shall have arisen; and the Seller shall not have waived any of the foregoing except as otherwise permitted hereunder.  On or prior to the Cutoff Date, no Financed Vehicle has been repossessed.

 

(xiv) Insurance.  Each Receivable requires the related Obligor to obtain physical damage insurance covering the related Financed Vehicle and to maintain such insurance.

 

(xv) Title.  It is the intention of the Seller that the transfers and assignments contemplated by the Receivables Purchase Agreement constitute a sale of the Receivables from the Seller to the Purchaser and that the beneficial interest in and title to the Receivables not be part of the debtor’s estate in the event of the appointment of a receiver or conservator for the Seller under any receivership, bankruptcy law, insolvency or banking law; no Receivable has been sold, transferred, assigned or pledged by the Seller to any Person other than the Purchaser; immediately prior to the transfer and assignment contemplated by the Receivables Purchase Agreement, the Seller had good and marketable title to each Receivable free and clear of all Liens and rights of others, except for Liens that shall be released on or before the Closing Date; immediately upon the transfer and assignment thereof, the Purchaser shall have good and marketable title to each Receivable, free and clear of all Liens and rights of others; and the transfer and assignment herein contemplated has been perfected under the UCC.

 

(xvi) Lawful Assignment.  No Receivable has been originated in, or is subject to the laws of, any jurisdiction under which the sale, transfer, assignment and conveyance of such Receivable under the Receivables Purchase Agreement or the Sale and Servicing Agreement or the pledge of such Receivables hereunder, thereunder or under the Indenture is unlawful, void or voidable or under which such Receivable would be rendered void or voidable as a result of any such sale, transfer, assignment, conveyance or pledge.  The Seller has not entered into any agreement with any account debtor that prohibits, restricts or conditions the assignment of the Receivables.

 

(xvii) All Filings Made.  All filings (including UCC filings) necessary in any jurisdiction to give the Purchaser, the Issuer and the Indenture Trustee a first priority security interest in the Receivables shall have been made or will be made on the Closing Date.

 

(xviii) One Original.  There shall be only one original executed copy of each Receivable.

 

(xix) Location of Receivable Files.  Each Receivable File shall be kept at one of the locations listed in Schedule A.

 

(xx) Custodial Agreements.  Immediately prior to the transfer of the Receivables by the Seller to the Purchaser, the Purchaser, an Affiliate of the Purchaser or an agent on behalf of the Purchaser had possession of the Receivable Files and there were no, and there will not be, any custodial agreements in effect affecting the right or ability of the Purchaser to make, or cause to be made, any delivery required under this Agreement.

 

 

  

A-3  

  

(xxi) Bulk Transfer Laws.  The transfer of the Receivables and the Receivable Files by the Seller to the Purchaser pursuant to this Agreement is not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction.

 

(xxii) Principal Balance.  As of the Cutoff Date, each Receivable had a remaining Principal Balance of not more than $[__________]and not less than $[__________].

 

(xxiii) New and Pre-Owned Vehicles.  Based on Cutoff Date Pool Balance, approximately [__]% of the Receivables were secured by new Financed Vehicles and approximately [__]% of the Receivables were secured by pre-owned Financed Vehicles.

 

(xxiv) Original Term to Maturity.  Each Receivable had an original term to maturity of not more than [__] months and not less than [__] months and, based on the number of remaining Monthly Payments, a remaining term to maturity as of the Cutoff Date, of not more than [__] months and not less than [__] months.

 

(xxv) Weighted Average Remaining Term to Maturity.  As of the Cutoff Date, based on the number of remaining Monthly Payments, the weighted average remaining term to maturity of the Receivables was approximately [__] months.

 

(xxvi) Annual Percentage Rate.  Each Receivable has an APR of at least [__]% and not more than [__]% and the weighted average APR of the Receivables as of the Cutoff Date was approximately [__]%.

 

(xxvii) Simple Interest Method.  All payments with respect to the Receivables have been allocated consistently in accordance with the Simple Interest Method.

 

(xxviii) Marking Records.  As of the Closing Date, the Seller will have caused its computer and accounting records relating to each Receivable to be marked to show that the Receivables have been sold to the Purchaser by the Seller and transferred and assigned by the Purchaser to the Issuer in accordance with the terms of the Sale and Servicing Agreement and pledged by the Issuer to the Indenture Trustee in accordance with the terms of the Indenture.

 

(xxix) Chattel Paper.  Each Receivable constitutes “tangible chattel paper” within the meaning of the UCC as in effect in the State of origination.

 

(xxx) Final Scheduled Distribution Date.  No Receivable has a final scheduled payment date later than six months prior to the Class [__] Final Scheduled Distribution Date.

 

(xxxi) No Fleet Sales.  None of the Receivables have been included in a “fleet” sale (i.e., a sale to any single Obligor of more than seven Financed Vehicles).

 

(xxxii) No Fraud or Misrepresentation.  Each Receivable that was originated by a Dealer and was sold by the Dealer to the Seller, to the best of the Seller’s knowledge, was so originated and sold without fraud or misrepresentation on the part of such Dealer in either case.

 

 

  

A-4  

  

(xxxiii) No Impairment.  The Seller has not done anything to convey any right to any Person that would result in such Person having a right to payments due under a Receivable or otherwise to impair the rights of the Depositor in any Receivable or the proceeds thereof.

 

(xxxiv) Servicing.  Each Receivable has been serviced in conformity with all Applicable Laws, rules and regulation and in conformity with the Seller’s policies and procedures which are consistent with customary, prudent industry standards.

 

(xxxv) No Consent.  To the best of the Seller’s knowledge, no notice to or consent from any Obligor is necessary to effect the acquisition of the Receivables by the Purchaser or the Issuer or the pledge of the Receivables by the Issuer to the Indenture Trustee.

 

(xxxvi) FICO Score.  The weighted average FICO score of the Receivables as of the Cutoff Date (based on the FICO score recorded at the respective dates of origination of such Receivables) was approximately [__].  The FICO score with respect to any Receivable with co-obligors is the higher of each obligor’s FICO score at the time of application.

 

 

  

A-5  

  

EXHIBIT B

 

FORM OF INVESTOR REPORT

 

	
Mercedes-Benz Auto Receivables Trust 

200[_]-[_]

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Investor Report

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Collection Period ended

	  	  	  	  	  	Page 1 of 6
	  	  	  	  	  	  	
Amounts in USD

	
Dates

	  	  	  	  	  	  
	
Collection Period No.

	  	  	  	  	  	  
	
Collection Period (from...to)

	  	  	  	  	  	
 

	
Determination Date

	  	  	  	  	  	  
	
Record Date

	  	  	  	  	  	  
	
Distribution Date

	  	  	  	  	  	  
	
Interest Period of the Class A-1 Note (from...to)

	  	  	  	  	
Actual/360 Days

	  
	
Interest Period of the A-2, A-3, A-4 Notes and Class B Notes(from...to)

	  	  	  	  	
30/360 Days

	  
	  	  	  	  	  	  	  
	
Summary

	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	
Initial Balance

	
Beginning Balance

	
Ending Balance

	
Principal Payment

	
Principal per $1000

Face Amount

	
Note Factor

	
Class A-1 Notes

	
$

	
$

	
$

	
$

	
$

	  
	
Class A-2 Notes

	
$

	
$

	
$

	
$

	
$

	  
	
Class A-3 Notes

	
$

	
$

	
$

	
$

	
$

	  
	
Class A-4 Notes

	
$

	
$

	
$

	
$

	
$

	  
	Class B Notes	 	 	 	 	 	 
	
Total Note Balance

	
$

	
$

	
$

	
$

	  	  
	  	  	  	  	  	  	  
	
Overcollateralization

	
$

	
$

	
$

	  	  	  
	
Adjusted Pool Balance

	
$

	
$

	
$

	  	  	  
	
Yield Supplement Overcollateralization Amount

	
$

	
$

	
$

	  	  	  
	
Pool Balance

	
$

	
$

	
$

	  	  	  
	  	  	  	  	  	  	  
	  	
Amount

	
Percentage

	  	  	  	  
	
Initial Overcollateralization Amount

	
$

	
%

	  	  	  	  
	
Target Overcollateralization Amount

	
$

	
%

	  	  	  	  
	
Current Overcollateralization Amount

	
$

	
%

	  	  	  	  

 

  

B-1

  

 

	
Mercedes-Benz Auto Receivables Trust 

200[_]-[_]

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Investor Report

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Collection Period ended

	  	  	  	  	  	 

	  	  	  	  	  	  	 Page 2 of 6
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	  	
Interest Rate

	
Interest Payment

	
Interest per $1000 Face Amount

	
Interest & Principal Payment

	
Interest & Principal Payment per $1000 Face Amount

	
 

	
Class A-1 Notes

	
%

	
$

	
$

	
$

	
$

	  
	
Class A-2 Notes

	
%

	
$

	
$

	
$

	
$

	  
	
Class A-3 Notes

	
%

	
$

	
$

	
$

	
$

	  
	
Class A-4 Notes

	
%

	
$

	
$

	
$

	
$

	  
	Class B Notes	 	 	 	 	 	 
	
Total

	  	
$

	  	
$

	  	  
	  	  	  	  	  	  	  
	
Available Funds

	  	  	  	  	  	  
	
Principal Collections

	
$

	  	  	  	  	  
	
Interest Collections

	
$

	  	  	  	  	  
	
Net Liquidation Proceeds

	
$

	  	  	  	  	  
	
Recoveries

	
$

	  	  	  	  	  
	
Purchase Amounts

	
$

	  	  	  	  	  
	
Advances made by the Servicer

	
$

	  	  	  	  	  
	
Investment Earnings

	
$

	  	  	  	  	  
	
Available Collections

	
$

	  	  	  	  	  
	
Reserve Fund Draw Amount

	
$

	  	  	  	  	  
	
Available Funds

	
$

	  	  	  	  	  
	  	  	  	  	  	  	  
	
Distribution

	  	  	  	  	  	  
	
(1) Total Servicing Fee

	
$

	  	  	  	  	  
	
     Nonrecoverable Advances to the Servicer

	
$

	  	  	  	  	  
	
(2) Total Trustee Fees (max. $100,000 p.a.)

	
$

	  	  	  	  	  
	
(3) Interest Distributable Amount to Class A Notes

	
$

	  	  	  	  	  
	
(4) Priority Principal Distributable Amount

	
$

	  	  	  	  	  
	(5) Interest Distributable Amount to Class B Notes	 	 	 	 	 	 
	
(6) To Reserve Fund to reach the Reserve Fund Required Amount

	
$

	  	  	  	  	  
	
(7) Regular Principal Distributable Amount

	
$

	  	  	  	  	  
	
(8) Additional Servicing Fee and Transition Costs

	
$

	  	  	  	  	  
	
(9) Total Trustee Fees [not previously paid under (2)]

	
$

	  	  	  	  	  

 

  

B-2

  

 

 

	
Mercedes-Benz Auto Receivables Trust 

200[_]-[_]

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Investor Report

	  	  	  	  	  	  
	 	 	 	 	 	 	 

	Collection Period ended	 	 	 	 	 	 Page 3 of 6
	
(9) Excess Collections to Certificateholders

	
$

	  	  	  	  	
 

 

	
Total Distribution

	
$

	  	  	  	  	  
	  	  	  	  	  	  	  
	
Mercedes-Benz Auto Receivables Trust 

200[_]-[_]

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Investor Report

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Collection Period ended

	  	  	  	  	  	  
	  	  	  	  	  	  	
Amounts in USD

	
Distribution Detail

	  	  	  	  	  	  
	  	
Due

	
Paid

	
Shortfall

	  	  	  
	
Total Servicing Fee

	
$

	
$

	
$

	  	  	  
	
Total Trustee Fees

	
$

	
$

	
$

	  	  	  
	  	  	  	  	  	  	  
	
Monthly Interest Distributable Amount

	
$

	
$

	
$

	  	  	  
	
thereof on Class A-1 Notes

	
$

	
$

	
$

	  	  	  
	
thereof on Class A-2 Notes

	
$

	
$

	
$

	  	  	  
	
thereof on Class A-3 Notes

	
$

	
$

	
$

	  	  	  
	
thereof on Class A-4 Notes

	
$

	
$

	
$

	  	  	  
	
Interest Carryover Shortfall Amount

	
$

	
$

	
$

	  	  	  
	
thereof on Class A-1 Notes

	
$

	
$

	
$

	  	  	  
	
thereof on Class A-2 Notes

	
$

	
$

	
$

	  	  	  
	
thereof on Class A-3 Notes

	
$

	
$

	
$

	  	  	  
	
thereof on Class A-4 Notes

	
$

	
$

	
$

	  	  	  
	
Interest Distributable Amount Class A Notes

	
$

	
$

	
$

	  	  	  
	
Monthly Interest DistributableAmount

on the Class B Notes

	$	$	$	  	  	  
	 
Interest Carryover Shortfall Amount

 
on the Class B Notes

	$	$	$	 	 	 
	Interest Distributable Amount Class B Notes	$	$	$	 	 	 
	
Priority Principal Distributable Amount

	
$

	
$

	
$

	  	  	  
	
Regular Principal Distributable Amount

	
$

	
$

	
$

	  	  	  
	
Aggregate Principal Distributable Amount

	
$

	
$

	
$

	  	  	  
	  	  	  	  	  	  	  
	
Reserve Fund and Investment Earnings

	  	  	  	  	  	  
	  	  	  	  	  	  	  
	
Reserve Fund

	  	  	  	  	  	  
	  	  	  	  	  	  	  
	
Reserve Fund Required Amount

	
$

	  	  	  	  	  

 

  

B-3

  

 

	
Mercedes-Benz Auto Receivables Trust 

200[_]-[_]

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Investor Report

	  	  	  	  	  	  
	 	 	 	 	 	 	 

	Collection Period ended	 	 	 	 	 	Page 4 of 6

	Reserve Fund Amount - Beginning Balance	$	 	 	 	 	 
	
  plus top up Reserve Fund up to the Required Amount

	
$

	  	  	  	  	  
	
  plus Net Investment Earnings for the Collection Period

	
$

	  	  	  	  	  
	
  minus Net Investment Earnings

	
$

	  	  	  	  	  
	
  minus Reserve Fund Draw Amount

	
$

	  	  	  	  	  
	
Reserve Fund Amount - Ending Balance

	
$

	  	  	  	  	  
	  	  	  	  	  	  	  
	
Reserve Fund Amount Deficiency

	
$

	  	  	  	  	  
	  	  	  	  	  	  	  
	
Investment Earnings

	  	  	  	  	  	  
	  	  	  	  	  	  	  
	
Net Investment Earnings on the Reserve Fund

	
$

	  	  	  	  	  
	
Net Investment Earnings on the Collection 

Account

	
$

	  	  	  	  	  
	
Investment Earnings for the Collection Period

	
$

	  	  	  	  	  
	  	  	  	  	  	  	  
	
Mercedes-Benz Auto Receivables Trust 200[_]-[_]

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Investor Report

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Collection Period ended

	  	  	  	  	  	  
	  	  	  	  	  	  	
Amounts in USD

	 	 	 	 	 	 	 
	
Notices to Investors

	 	 	 	 	 	 

 

  

B-4

  

 

	
Mercedes-Benz Auto Receivables Trust 

200[_]-[_]

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Investor Report

	  	  	  	  	  	  
	 	 	 	 	 	 	 

	Collection Period ended	 	 	 	 	 	Page 5 of 6

	
Pool Statistics

	 	 	 	 	 	 
	  	  	  	  	  	  	  
	
Pool Data

	  	  	  	  	  	  
	  	
Amount

	
Number of Receivables

	  	  	  	  
	
Cutoff Date Pool Balance

	
$________________

	
______

	  	  	  	  
	  	  	  	  	  	  	  
	
Pool Balance beginning of Collection Period

	
$

	  	  	  	  	  
	
Principal Collections

	
$

	  	  	  	  	  
	
Principal Collections attributable to Full Pay-offs

	
$

	  	  	  	  	  
	
Principal Purchase Amounts

	
$

	  	  	  	  	  
	
Principal Gross Losses

	
$

	  	  	  	  	  
	
Pool Balance end of Collection Period

	
$

	  	  	  	  	  
	
Pool Factor   %

	
$

	  	  	  	  	  
	  	  	  	  	  	  	  
	  	
As of Cutoff Date

	
Current

	  	  	  	  
	
Weighted Average APR

	
%

	
%

	  	  	  	  
	
Weighted Average Number of Remaining Payments

	  	  	  	  	  	  
	
Weighted Average Seasoning (months)

	  	  	  	  	  	  
	  	  	  	  	  	  	  
	
Delinquency Profile *

	  	  	  	  	  	  
	  	
Amount

	
Number of Receivables

	
Percentage

	  	  	  
	
Current

	
$

	  	
%

	  	  	  
	
31-60 Days Delinquent

	
$

	  	
%

	  	  	  
	
61-90 Days Delinquent

	
$

	  	
%

	  	  	  
	
91-120 Days Delinquent

	
$

	  	
%

	  	  	  
	
Total

	
$

	  	
100%

	  	  	  
	
* A receivable is not considered delinquent if the amount past due is less than 10% of the payment due under 

such receivable

	  	  	  	  
	  	  	  	  	  	  	  
	
Losses

	  	  	  	  	  	  
	  	
Current

	  	  	  	  	  
	
Principal Gross Losses

	
$

	  	  	  	  	  
	
Principal Net Liquidation Proceeds

	
$

	  	  	  	  	  
	
Principal Recoveries

	
$

	  	  	  	  	  

 

  

B-5

  

 

 

	
Mercedes-Benz Auto Receivables Trust 

200[_]-[_]

	  	  	  	  	  	  
	 	 	 	 	 	 	 
	
Investor Report

	  	  	  	  	  	  
	 	 	 	 	 	 	 

	Collection Period ended	 	 	 	 	 	Page 6 of  6

	
Principal Net Losses

	
$

	 	 	 	 	 
	
Cumulative Principal Net Losses

	
$

	  	  	  	  	  
	
Cumulative Principal Net Loss as % of Cutoff Date Pool 

Balance

	
%

	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  

 

  

B-6

  

APPENDIX A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

AA-1

  

 

 

APPENDIX A

 

USAGE AND DEFINITIONS

 

USAGE

 

The following rules of construction and usage are applicable to this Appendix and to any agreement that incorporates this Appendix and any certificate or other document made or delivered pursuant to any such agreement:

 

(a)           All terms defined in this Appendix, unless otherwise defined in any agreement that incorporates this Appendix or any certificate or other document made or delivered pursuant to any such agreement, have the meanings assigned in this Appendix.

 

(b)           Accounting terms not defined in this Appendix or in any such agreement, certificate or other document, and accounting terms partly defined in this Appendix or in any such agreement, certificate or other document, to the extent not defined, have the respective meanings given to them under International Financial Reporting Standards as in effect on the date of such agreement, certificate or other document.  To the extent that the definitions of accounting terms in this Appendix or in any such agreement, certificate or other document are inconsistent with the meanings of such terms under International Financial Reporting Standards, the definitions contained in this Appendix or in any such agreement, certificate or other document will control.

 

(c)           References to words such as “this Agreement”, “herein”, “hereof” and the like shall refer to an agreement that incorporates this Appendix as a whole and not to any particular part, Article or Section within such agreement.  References in an agreement to “Article”, “Section”, “Exhibit”, “Schedule”, “subsection” or another subdivision or to an attachment are, unless otherwise specified, to an article, section, exhibit, schedule, subsection or other subdivision of or an attachment to such agreement.  The term “or” means “and/or” and the term “including” means “including without limitation”.

 

(d)           The definitions contained in this Appendix are equally applicable to both the singular and plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

 

(e)           Any agreement or statute defined or referred to in this Appendix or in any agreement that incorporates this Appendix means such agreement or statute as from time to time amended, modified, supplemented or replaced, including (in the case of agreements) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and includes (in the case of agreements) references to all attachments thereto and instruments incorporated therein and (in the case of statutes) any rules and regulations promulgated thereunder and any judicial and administrative interpretations thereof.

 

(f)           References to a Person are also to its permitted successors and assigns.

 

  

AA-1

  

(g)           References to deposits, transfers and payments of any amounts refer to deposits, transfers or payments of such amounts in immediately available funds; and the term “proceeds” has the meaning ascribed to such term in the UCC.

 

(h)           Except where “not less than zero” or similar language is indicated, amounts determined by reference to a mathematical formula may be positive or negative.

 

DEFINITIONS

 

“Account Collateral” means, with respect to each Account, such Account, together with all cash, securities, Financial Assets and investments and other property from time to time deposited or credited to such Account and all proceeds thereof, including, with respect to the Reserve Fund, the Reserve Fund Deposit and the Reserve Fund Amount.

 

“Accountants” means a firm of independent public accountants.

 

“Accounts” means the Collection Account, the Note Payment Account and the Reserve Fund.

 

“Act” has the meaning specified in Section 11.03(a) of the Indenture.

 

“Additional Servicing Fee” means, for any Collection Period, if a Successor Servicer is appointed pursuant to Section 7.02 of the Sale and Servicing Agreement, the amount, if any, by which (i) the compensation payable to such Successor Servicer for such Collection Period exceeds (ii) the Monthly Servicing Fee for such Collection Period.

 

“Adjusted Pool Balance” means, as of any day, the Pool Balance minus the Yield Supplement Overcollateralization Amount for such day.

 

“Administration Agreement” means the Administration Agreement, dated as of [____], 201[_], among the Administrator, the Issuer, the Depositor and the Indenture Trustee.

 

“Administrator” means MBFS USA, in its capacity as administrator under the Administration Agreement, and its successors in such capacity.

 

“Advance” has the meaning specified in Section 4.06(a) of the Sale and Servicing Agreement.

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such Person.  For purposes of this definition, “control”, when used with respect to any 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.

 

“Aggregate Principal Distributable Amount” means, with respect to any Distribution Date, the Priority Principal Distributable Amount and the Regular Principal Distributable Amount.

 

  

AA-2

  

“Amount Financed” means, with respect to any Receivable, the aggregate amount advanced under such Receivable toward the purchase price of the related Financed Vehicle and any related costs, including accessories, insurance premiums, service and warranty contracts and other items customarily financed as part of a motor vehicle retail installment sale contract or installment loan.

 

“Applicable Law” means all applicable laws, ordinances, judgments, decrees, injunctions, writs and orders of any Governmental Authority and rules, regulations, orders, interpretations, licenses and permits of any Governmental Authority.

 

“Applicants” has the meaning specified in Section 3.07 of the Trust Agreement.

 

“APR” means, with respect to any Receivable, the annual percentage rate of interest stated in such Receivable.

 

“Authenticating Agent” means each Person appointed as an authenticating agent pursuant to Section 2.15 of the Indenture.

 

“Authorized Newspaper” means a newspaper of general circulation in The City of New York, printed in the English language and customarily published on each Business Day, whether or not published on Saturdays, Sundays and holidays.

 

“Authorized Officer” means, with respect to (i) the Issuer, any officer of the Owner Trustee who is authorized to act for or on behalf of the Owner Trustee in matters relating to the Issuer and who is identified on the list of authorized officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter), as well as the president, any Vice President, the treasurer, any assistant treasurer, the secretary or any assistant secretary of the Depositor and, for so long as the Administration Agreement is in effect, any Vice President or more senior officer of the Administrator who is authorized to act for the Administrator in matters relating to the Issuer and to be acted upon by the Administrator pursuant to the Administration Agreement and who is identified on the list of authorized officers delivered by the Administrator to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and (ii) any other Person, any president, Vice President, treasurer, assistant treasurer, secretary, assistant secretary or any other officer of such Person who customarily performs functions similar to those performed by any of the foregoing having direct responsibility for the administration of the Basic Documents and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“Available Collections” means, for any Distribution Date and the related Collection Period, the sum of (i) all Obligor payments relating to interest and principal received by the Servicer with respect to the Receivables during the related Collection Period after the Cutoff Date (other than amounts comprising the Supplemental Servicing Fee), (ii) all Net Liquidation Proceeds, Insurance Proceeds (with respect to Receivables that are not Defaulted Receivables), Recoveries and Dealer Recourse payments received with respect to the Receivables during such Collection Period, (iii) interest and other income (net of losses and investment expenses) on 

 

  

AA-3

  

 

amounts on deposit in the Reserve Fund and, in the event that collections on or in respect of the Receivables are required to be deposited by the Servicer into the Collection Account on a daily basis pursuant to Section 4.03 of the Sale and Servicing Agreement, the Collection Account, (iv) the aggregate Purchase Amounts deposited in the Collection Account on the related Deposit Date, (v) all prepayments received with respect to the Receivables attributable to any refunded item included in the Amount Financed of any Receivable, including amounts received as a result of rebates of extended warranty contract costs and proceeds received under physical damage, theft, credit life and credit disability insurance policies and (vi) all Advances deposited into the Collection Account by the Servicer on the related Deposit Date; provided, however, that Available Collections shall not include any payments or other amounts (including Net Liquidation Proceeds and Recoveries) received with respect to any (a) Purchased Receivable, the Purchase Amount for which was included in Available Collections for a previous Distribution Date and (b) Receivable to the extent that the Servicer has made an unreimbursed Advance with respect to such Receivable and is entitled to reimbursement from payments in respect of such Receivables or other Receivables or other amounts pursuant to Section 4.07 of the Sale and Servicing Agreement.

 

“Available Funds” means, with respect to any Distribution Date, the sum of (i) Available Collections and (ii) the Reserve Fund Draw Amount, if any.

 

“Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. § 101 et seq.

 

“Basic Documents” means the Sale and Servicing Agreement, the Administration Agreement, the Indenture, the Note Depository Agreement, the Receivables Purchase Agreement and the Trust Agreement.

 

“Benefit Plan” means (i) employee benefit plans (as defined in Section 3(3) of ERISA) that are subject to Title I of ERISA, (ii) plans described in Section 4975(e)(1) of the Code, including individual retirement accounts or Keogh Plans, that are not exempt under Section 4975(g) of the Code and (iii) any entities whose underlying assets include plan assets by reason of a plan’s investment in such entities.

 

“Book-Entry Notes” 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 any day other than a Saturday, a Sunday or a day on which banking institutions or trust companies in New York, New York, Wilmington, Delaware, Detroit, Michigan or [__________] are authorized by law, regulation or executive order to be closed.

 

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

 

“Certificate of Trust” means the Certificate of Trust substantially in the form of Exhibit B to the Trust Agreement filed for the Issuer pursuant to Section 3810(a) of the Statutory Trust Statute.

 

  

AA-4

  

“Certificate Percentage Interest” means, with respect to a Certificate, the percentage specified on such Certificate as the Certificate Percentage Interest, which percentage represents the beneficial interest of the holder of such Certificate in the Issuer.  The initial Certificate Percentage Interest held by the Depositor shall be [100%].

 

“Certificate Register” and “Certificate Registrar” shall have the respective meanings specified in Section 3.04(a) of the Trust Agreement.

 

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

 

“Certification Parties” means, collectively, the Certifying Person and the entity for which the Certifying Person acts as an officer, and such entity’s officers, directors and Affiliates.

 

“Certifying Person” means an individual who signs the Sarbanes-Oxley Certification.

 

“Class” means 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 Notes, as the context may require.

 

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

 

“Class A Notes” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.

 

“Class A-1 Final Scheduled Distribution Date” means [______], 201[_].

 

“Class A-1 Interest Rate” means [______]% per annum (computed on the basis of the [actual number of days in the related Interest Period] divided by 360).

 

“Class A-1 Notes” means $[______] aggregate principal amount of the Issuer’s [______]% Class A-1 Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.

 

“Class A-2 Final Scheduled Distribution Date” means the [________], 201[_] Distribution Date.

 

“Class A-2 Interest Rate” means, for each Interest Period, One-Month LIBOR for such Interest Period plus [__]% per annum (computed on the basis of the actual number of days in the related Interest Period divided by 360).

 

“Class A-2 Notes” means $[_____] aggregate principal amount of the Issuer’s Floating Rate Class A-2 Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.

 

“Class A-3 Final Scheduled Distribution Date” means the [____], 201[_] Distribution Date.

 

  

AA-5

  

“Class A-3 Interest Rate” means [__]% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).

 

“Class A-3 Notes” means $[__________] aggregate principal amount of the Issuer’s [__]% Class A-3 Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.

 

“Class A-4 Final Scheduled Distribution Date” means the [____], 201[_] Distribution Date.

 

“Class A-4 Interest Rate” means [___]% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).

 

“Class A-4 Notes” means $[_________] aggregate principal amount of the Issuer’s [__]% Class A-4 Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.

 

“Class B Final Scheduled Distribution Date” means the [____], 201[_] Distribution Date.

 

“Class B Interest Rate” means [___]% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).

 

“Class B Notes” means $[_________] aggregate principal amount of the Issuer’s [__]% Class B Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.

 

“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act, which initially shall be The Depository Trust Company.

 

“Clearing Agency Custodian” means the Indenture Trustee, as custodian for the Clearing Agency.

 

“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 [____], 201[_].

 

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

 

“Collateral” has the meaning specified in the Granting Clause of the Indenture.

 

“Collection Account” means the account designated as such, and established and maintained pursuant to Section 4.01(a) of the Sale and Servicing Agreement.

 

“Collection Period” means, with respect to any Distribution Date, the immediately preceding calendar month (or, in the case of the first Collection Period, the period from but excluding the Cutoff Date to and including the last day of the calendar month immediately preceding the calendar month in which the first Distribution Date occurs).

 

“Commission” means the United States Securities and Exchange Commission.

 

  

AA-6

  

“Control” has the meaning specified in Section 8-106 of the UCC.

 

“Controlling Class” means the Class A Notes for so long as the Class A Notes are Outstanding and thereafter the Class B Notes.

 

“Corporate Trust Office” means, with respect to (i) the Indenture Trustee, the office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of execution of the Indenture is located at [___________________________], Attention: Structured Finance – Mercedes-Benz Auto Receivables Trust 201[_]-[_], or at such other address as the Indenture Trustee may designate from time to time by written notice to the Noteholders and the Issuer, or the principal corporate trust office of any successor Indenture Trustee at the address designated by such successor Indenture Trustee by written notice to the Noteholders and the Issuer or (ii) the Owner Trustee, the principal corporate trust office of the Owner Trustee located at [___________________________________________], Attention: Corporate Trust Administration, or at such other address as the Owner Trustee may designate from time to time by notice to the Certificateholders, the Indenture Trustee, the Servicer and the Depositor, or the principal corporate trust office of any successor Owner Trustee at the address designated by such successor Owner Trustee by notice to the Certificateholders, the Indenture Trustee, the Servicer and the Depositor.

 

“Cutoff Date” means the close of business on [____], 201[_], the date after which the Issuer will be entitled to receive all amounts related to the Receivables.

 

“Cutoff Date Adjusted Pool Balance” means the Adjusted Pool Balance as of the Cutoff Date (i.e., $[_______________]).

 

“Cutoff Date Pool Balance” means the aggregate Principal Balance of the Receivables as of the Cutoff Date, which is $[______________].

 

“Daimler AG” means Daimler AG, a company organized under the laws of Germany.

 

“Daimler Retail Receivables” means Daimler Retail Receivables LLC, a Delaware limited liability company.

 

“Dealer” means the dealer of motor vehicles who sold a Financed Vehicle and who originated and assigned the Receivable relating to such Financed Vehicle to the Seller under an existing agreement between such dealer and the Seller.

 

“Dealer Agreement” means an agreement between the Seller and a Dealer, entered into by the Seller in the ordinary course of its business, providing for the sale of Receivables by the Dealer to the Seller.

 

“Dealer Recourse” means, with respect to a Receivable, all recourse rights against the Dealer which originated the Receivable, and any successor to such Dealer.

 

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

 

  

AA-7

  

“Defaulted Receivable” means a Receivable as to which (i) at least 10% of any payment, or any part of any payment, due under such Receivable has become 120 days or more delinquent (whether or not the Servicer has repossessed the related Financed Vehicle) or (ii) the Servicer has charged off any portion of the Principal Balance of the Receivable or has determined in accordance with its customary practices that such Receivable is uncollectible; provided, however, that (a) a Receivable will not become a Defaulted Receivable until the last day of the Collection Period during which one of the foregoing events first occurs and (b) a Purchased Receivable will not be deemed to be a Defaulted Receivable.

 

“Definitive Notes” means definitive, fully registered Notes issued pursuant to Section 2.12 of the Indenture.

 

“Delaware Statutory Trust Act” means 12 Del C. § 3801 et seq.

 

“Deposit Date” means, with respect to any Distribution Date and the related Collection Period, the Business Day immediately preceding such Distribution Date.

 

“Depositor” means Daimler Retail Receivables, in its capacity as depositor, and its successors in such capacity.

 

“Depositor Basic Documents” means the Basic Documents to which the Depositor is a party.

 

“Depositor Limited Liability Company Agreement” means the Amended and Restated Limited Liability Company Agreement of the Depositor, dated as of September 30, 2009, by MBFS USA, as member.

 

“Determination Date” means, with respect to any Distribution Date, the second Business Day preceding such Distribution Date, commencing on [____], 201[_].

 

“Discount Rate” means, with respect to any Receivable, the greater of (i) the related APR and (ii) the Required Rate.

 

“Distribution Date” means the date on which the Issuer will pay interest and principal on the Notes, which will be the [15th ]day of each month or, if any such day is not a Business Day, the next Business Day, commencing [____], 201[_].

 

“EDGAR” means the Commission’s Electronic Data Gathering, Analysis and Retrieval system.

 

“Eligible Deposit Account” means either (i) a segregated deposit account over which the Indenture Trustee or the Owner Trustee, as the case may be, has sole signature authority, maintained with an Eligible Institution meeting the requirements of clause (i) of the definition of the term “Eligible Institution” or (ii) a segregated trust account maintained with the trust department of an Eligible Institution meeting the requirements of clause (ii) of the definition of the term “Eligible Institution”, in each case bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Securityholders, the Noteholders or the Certificateholders, as the case may be.

 

  

AA-8

  

“Eligible Institution” means (i) the corporate trust department of either Trustee or (ii) the corporate trust department of any other depository institution organized under the laws of the United States or any State or incorporated under the laws of a foreign jurisdiction with a branch or agency located in the United States or any State qualified to take deposits and subject to supervision and examination by federal or state banking authorities (a) which at all times has either (1) a long-term unsecured debt rating of at least “[___]” from [___] and “[___]” from [____] or (2) a long-term unsecured debt rating, short-term unsecured debt rating or a certificate of deposit rating otherwise acceptable to the Rating Agencies and (b) whose deposits are insured by the Federal Deposit Insurance Corporation.

 

“Eligible Investments” means, at any time, any one or more of the following obligations, instruments, investments and securities:

 

(i)           direct obligations of, and obligations fully guaranteed by, the United States or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States;

 

(ii)          demand deposits, time deposits, bankers’ acceptances or certificates of deposit of any depository institution or trust company (a) incorporated under the laws of the United States, any State or any United States branch of a foreign bank, (b) subject to supervision and examination by federal or State banking or depository institution authorities and (c) at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) of which have the Required Rating;

 

(iii)         repurchase obligations, having maturities of not more than 365 days, with respect to any security that is a direct obligation of, or fully guaranteed by, the United States or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States, in either case entered into with a depository institution or trust company (acting as principal) described in clause (ii) above;

 

(iv)         short-term corporate securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States or any State thereof; provided, however, that (a) such investment shall not have an ‘r’ highlighter affixed to its rating and its terms shall have a predetermined fixed dollar amount of principal due at maturity that cannot vary or change and (b) at the time of the investment, the short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such corporation) of such corporation shall have the highest rating from [____] and [____];

 

(v)          commercial paper having maturities of not more than 365 days, at the time of the investment, with the highest rating from [____] and [____]; provided, however, that such investment shall not have an ‘r’ highlighter affixed to its rating and its terms shall have a predetermined fixed dollar amount of principal due at maturity that cannot vary or change;

 

  

AA-9

  

(vi)         guaranteed investment contracts issued by an insurance company or other corporation as to which the Rating Agency Condition shall have been satisfied;

 

(vii)        investments in money market funds having a rating from [____] of at least “[__________]” and from [____] of at least “[___]” (including funds for which either Trustee, the Servicer or any of their respective Affiliates is investment manager or advisor); and

 

(viii)       any other investment as to which the Rating Agency Condition shall have been satisfied; provided, however, that in no event shall any such investment have a long-term rating of less than “[__]” from [____] and “[____]” from [____] or a short-term rating of less than “[__]” from [____] and “[____]” from [____];

 

provided, that each of the foregoing investments shall mature no later than the Deposit Date immediately following the Collection Period in which such investment was made, and shall be required to be held to such maturity.

 

Notwithstanding anything to the contrary contained in this definition, (a) no Eligible Investment may be purchased at a premium, (b) no obligation or security shall be a “Eligible Investment” unless (i) the Indenture Trustee has Control over such obligation or security and (ii) at the time the Indenture Trustee first obtained Control or the Indenture Trustee became the Entitlement Holder with respect to such obligation or security, the Indenture Trustee did not have notice of any adverse claim with respect thereto within the meaning of Section 8-102 of the UCC and (c) with respect to investments above that require a rating of “[___]” from [____], such investments in certain short-term debt of issuers or deposits in institutions rated “[__]” by [____] will be permitted so long as (1) the total amount of investments in “[_]” issuers or deposits in “[_]” institutions must be limited to investments of the amount on deposit in the Collection Account and (2) the total amount of “[_]” investments shall not represent more than 20% of the Note Balance as of any date.

 

For purposes of this definition, any reference to the highest available credit rating of an obligation means the highest available credit rating for such obligation, or such lower credit rating (as approved in writing by each Rating Agency) as will not result in the qualification, downgrading or withdrawal of the rating then assigned to any Securities by such Rating Agency.

 

“Eligible Servicer” means a Person which, at the time of its appointment as Servicer, (i) has a net worth of not less than $50,000,000, (ii) is servicing a portfolio of motor vehicle retail installment sale contracts or motor vehicle loans, (iii) is legally qualified, and has the capacity, to service the Receivables, (iv) has demonstrated the ability to service a portfolio of motor vehicle installment sales contracts and installment loans similar to the Receivables professionally and competently in accordance with standards of skill and care that are consistent with prudent industry standards and (v) is qualified and entitled to use pursuant to a license or other written agreement, and agrees to maintain the confidentiality of, the software which the Servicer uses in connection with performing its duties and responsibilities under the Sale and Servicing Agreement or obtains rights to use, or develops at its own expense, software which is adequate to perform its duties and responsibilities under the Sale and Servicing Agreement.

 

  

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“Entitlement Holder” has the meaning specified in Section 8-102 of the UCC.

 

“Entitlement Order” has the meaning specified in Section 8-102 of the UCC.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“Event of Default” has the meaning specified in Section 5.01 of the Indenture.

 

“Excess Collections” means, with respect to any Distribution Date, any Available Funds remaining after the distributions have been made pursuant to Section 2.08(a)(i) through (a)(viii) or Section 2.08(f)(i) through (f)(vi) of the Indenture.

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Exchange Act Reports” means any reports on Form 10-D, Form 8-K or Form 10-K required to be filed by the Depositor with respect to the Issuer under the Exchange Act.

 

“Executive Officer” means, with respect to any (i) corporation, limited liability company or depository institution, the chief executive officer, the chief operating officer, the chief financial officer, the president, any Vice President, the secretary or the treasurer of such entity and (ii) partnership, any general partner thereof.

 

“Expenses” means any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever.

 

“Final Scheduled Distribution Date” means the Class A-1 Final Scheduled Distribution Date, the Class A-2 Final Scheduled Distribution Date, the Class A-3 Final Scheduled Distribution Date, the Class A-4 Final Scheduled Distribution Date or the Class B Final Scheduled Distribution Date, as the context may require.

 

“Financed Vehicle” means, with respect to any Receivable, the related new or pre-owned Mercedes-Benz [passenger car, crossover or sport utility vehicle or smart fortwo microcar,] together with all accessions thereto, securing the related Obligor’s indebtedness under such Receivable.

 

“Financial Asset” has the meaning specified in Section 8-102(a)(9) of the UCC.

 

“First-Tier Assignment” means the first-tier assignment in substantially the form attached as Exhibit B to the Receivables Purchase Agreement.

 

 “Form 10-D Disclosure Item” means, with respect to any Person, any event specified in Part II of Schedule C for which such Person is the responsible party, if such Person or in the case of the Owner Trustee or Indenture Trustee, a Responsible Officer of such Person, has actual knowledge of such event.

 

“Form 10-K Disclosure Item” means, with respect to any Person, (i) any Form 10-D Disclosure Item and (ii) any additional items specified in Part III of Schedule C for which such 

 

  

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Person is the responsible party, or if such Person is the Indenture Trustee or the Owner Trustee, a Responsible Officer of such Person has actual knowledge of such event.

 

“Governmental Authority” means the United States, any State or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Grant” means to mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create and grant a lien upon and a security interest in and a 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 monies 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.

 

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

 

“Indemnified Parties” means the Owner Trustee and its officers, directors, successors, agents and servants.

 

“Indenture” means the Indenture, dated as of [____], 201[_], between the Issuer and the Indenture Trustee.

 

“Indenture Trustee” means [____], in its capacity as Indenture Trustee under the Indenture, and its successors in such capacity.

 

“Independent” means, with respect to any Person, that such Person (i) is in fact independent of the Issuer, any other obligor on the Notes, the Depositor, the Seller, the Servicer and any of their respective Affiliates, (ii) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Depositor, the Seller, the Servicer or any of their respective Affiliates and (iii) is not connected with the Issuer, any such other obligor, the Depositor, the Seller, the Servicer or any of their respective Affiliates 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 the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01 of the Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and acceptable to the Indenture Trustee 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 Note Balance” means, as the context may require, with respect to (i) all of the Notes, $[____________] or (ii) any Note, an amount equal to the initial denomination of such Note.

 

  

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“Insolvency Event” means, with respect to any Person, (i) the making of a general assignment for the benefit of creditors; (ii) the filing of a voluntary petition in bankruptcy; (iii) being adjudged as bankrupt or insolvent, or having had entered against such Person an order for relief in any bankruptcy or insolvency Proceeding; (iv) the filing by such Person of a petition or answer seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any Insolvency Laws; (v) the filing by such Person of an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Person in any proceeding specified in clause (viii) below; (vi) the seeking, consenting to or acquiescing in the appointment of a trustee, receiver, liquidator or similar official of such Person or of all or any substantial part of the assets of such Person; (vii) the failure by such Person generally to pay its debts as such debts become due; (viii) the failure to obtain dismissal within 60 days of the commencement of any Proceeding against such Person seeking (a) reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, or (b) the appointment of a trustee, liquidator, receiver or similar official, in each case of such Person or of such Person’s assets or any substantial portion thereof; and (ix) the taking of action by such Person in furtherance of any of the foregoing.

 

“Insolvency Laws” means the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

 

“Insurance Proceeds” means proceeds paid by any insurer under a comprehensive and collision or limited dual interest insurance relating to a Receivable, other than funds used for the repair of the related Financed Vehicle or otherwise released to the related Obligor in accordance with normal servicing procedures, after reimbursement to the Servicer for expenses recoverable under the related insurance policy.

 

“Interest Carryover Shortfall Amount” means, with respect to any Distribution Date and a Class of Notes, the excess, if any, of the Interest Distributable Amount for that Class of Notes on the immediately preceding Distribution Date over the amount in respect of interest that is actually deposited in the Note Payment Account with respect to that Class of Notes on that preceding Distribution Date, plus, to the extent permitted by Applicable Law, interest on the amount of interest due but not paid to such Noteholders on that preceding Distribution Date at the applicable Interest Rate for the related Interest Period.

 

“Interest Distributable Amount” means, with respect to any Distribution Date and a Class of Notes, the sum of the Monthly Interest Distributable Amount and the Interest Carryover Shortfall Amount for that Class of Notes for that Distribution Date.

 

“Interest Period” means, with respect to any Distribution Date and the (i) Class A-1 Notes and the Class A-2 Notes, the period from, and including, the prior Distribution Date (or from, and including, the Closing Date with respect to the first Distribution Date) to, but excluding, the current Distribution Date and (ii) the Class A-3 Notes, the Class A-4 Notes and the Class B Notes, the period from, and including, the [15th ] day of the prior calendar month (or 

 

  

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from, and including, the Closing Date with respect to the first Distribution Date) to, but excluding, the 15th day of the current calendar month (assuming each month has 30 days).

 

“Interest Rate” means the Class A-1 Interest Rate, the Class A-2 Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate and the Class B Interest Rate, as applicable.

 

“Investor Report” means a report of the Servicer, delivered pursuant to Section 3.10 of the Sale and Servicing Agreement, substantially in the form of Exhibit B thereto.

 

“IRS” means the Internal Revenue Service.

 

“Issuer” means Mercedes-Benz Auto Receivables Trust 201[_]-[_] until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained in the Indenture and required by the TIA, each other obligor on the Notes.

 

“Issuer Basic Documents” means the Basic Documents to which the Issuer is a party.

 

“Issuer Order” or “Issuer Request” means a written order or request signed in the name of the Issuer by any Authorized Officer of the Issuer and delivered to the Indenture Trustee by the Administrator, if signed by an officer of the Administrator, or at the written direction of the Depositor, if signed by an officer of the Owner Trustee.

 

“Item 1119 Party” means the Depositor, the Seller, the Servicer, the Indenture Trustee, the Owner Trustee and any other material transaction party, as identified in Schedule B hereto.

 

“LIBOR Business Day” means any day other than a Saturday, Sunday or any other day on which banks in London are required or authorized to be closed.

 

“Lien” means any security interest, lien, claim, charge, pledge, equity or encumbrance of any kind other than tax liens, mechanics’ or materialmen’s liens, judicial liens and any other liens that may attach to a Financed Vehicle by operation of law.

 

“Maryland Vehicle Sales Finance Act” means Maryland Code Annotated, Financial Institutions §11-401 et seq.

 

“MBFS USA” means Mercedes-Benz Financial Services USA LLC, formerly known as DCFS USA LLC, a Delaware limited liability company.

 

“Monthly Interest Distributable Amount” means, with respect to any Distribution Date and any Class of Notes, the interest due on that Class of Notes for the related Interest Period calculated based on the Interest Rate for that Class of Notes for the related Interest Period and the principal amount of that Class of Notes on the preceding Distribution Date, after giving effect to all payments of principal on such Class of Notes on or prior to that Distribution Date, or, in the case of the first Distribution Date, on the original principal amount of that Class of Notes as of the Closing Date.

 

“Monthly Payment” means, with respect to any Receivable, the amount of each fixed monthly payment payable to the obligee under such Receivable in accordance with the terms 

 

  

AA-14

  

 

 

thereof, net of any portion of such monthly payment that represents late payment charges, extension fees or similar items.

 

“Monthly Remittance Condition” means that (i) MBFS USA, or its successor, is the Servicer and is a direct or indirect wholly owned subsidiary of Daimler AG, (ii) there exists no Servicer Termination Event and (iii) with respect to (a) [____], Daimler AG’s short-term unsecured debt is rated at least “[_]” by [____] and (b) [____] has agreed that the deposit of collections on or in respect of the Receivables into the Collection Account may be made by the Servicer on a monthly, rather than a daily, basis without such monthly deposits adversely impacting the ratings of any Outstanding Notes.

 

“Monthly Servicing Fee” means, for any Collection Period, the fee payable to the Servicer on the related Distribution Date for services rendered during such Collection Period, which is equal to the product of 1/12 of [___]% and the Pool Balance as of the first day of that Collection Period (or as of the Cutoff Date in the case of the first Distribution Date).

 

“Monthly Trustee Fees” means the monthly fees, expenses and indemnification amounts payable in accordance with the Basic Documents to each of the Trustees on each Distribution Date for the related Collection Period for performing their respective obligations under the Basic Documents.

 

“Net Liquidation Proceeds” means all amounts received by the Servicer, from whatever source (including Insurance Proceeds), with respect to any Defaulted Receivable during the Collection Period in which such Receivable became a Defaulted Receivable, minus the sum of:

 

(i)           expenses incurred by the Servicer in connection with the repossession and disposition of the related Financed Vehicle (to the extent not previously reimbursed to the Servicer); and

 

(ii)           all payments required by law to be remitted to the Obligor.

 

“Net Losses” means, with respect to any Collection Period, the difference (which may be positive or negative) of (i) the aggregate Principal Balance of all Receivables that became Defaulted Receivables during such Collection Period and (ii) the aggregate Net Liquidation Proceeds and Recoveries received by the Servicer during such Collection Period.

 

“Nonrecoverable Advance” means an Advance which the Servicer determines in its sole discretion is non-recoverable from payments made on or in respect of the related Receivable.

 

“Note Balance” means, at any time, the aggregate principal amount of all Notes that are Outstanding at such time or the aggregate principal amount of all Notes of the Controlling Class or a particular Class that are Outstanding at such time, as the context requires.

 

“Note Depository Agreement” means the agreement, dated the Closing Date, between the Issuer and The Depository Trust Company, as the initial Clearing Agency, relating to the Notes.

 

“Note Factor” means, with respect to each Class of Notes as of any Distribution Date, a four or more digit decimal figure equal to the product of (i) the Note Balance of such Class of 

 

  

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Notes as of such Distribution Date (after giving effect to any reductions thereof to be made on such Distribution Date) and (ii) 1.000000, divided by (iii) the original principal amount of such Class of Notes.

 

“Note Owner” means, with respect to any Book-Entry Note, the Person who is the beneficial 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).

 

“Note Payment Account” means the account designated as such, and established and maintained pursuant to Section 4.01(a) of the Sale and Servicing Agreement.

 

“Note Register” and “Note Registrar” have the respective meanings specified in Section 2.05(a) of the Indenture.

 

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

 

“Notes” means the Class A Notes and the Class B Notes.

 

“Obligor” means, with respect to any Receivable, the purchaser or co-purchasers of the related Financed Vehicle purchased in part or in whole by the execution and delivery of a Receivable or any other Person who owes or may be liable for payments under a Receivable.

 

“Officer’s Certificate” means, with respect to the Depositor, the Servicer or any other entity, a certificate signed by an Authorized Officer of the Depositor, the Servicer or such other entity, as the case may be.

 

[“One-Month LIBOR” means, for each Interest Period, the rate for deposits in U.S. Dollars for a period of one month which appears on the Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on the day that is two LIBOR Business Days prior to the preceding Distribution Date or, in the case of the initial Distribution Date, on the day that is two LIBOR Business Days prior to the Closing Date. If that rate does not appear on the Reuters Screen LIBOR01 Page (or any other page as may replace that page on that service, or if that service is no longer offered, any other service for displaying One-Month LIBOR or comparable rates as may be selected by the Indenture Trustee after consultation with the Depositor) then One-Month LIBOR for such Interest Period will be the Reference Bank Rate; provided, that, if, in accordance with the last sentence of the definition of Reference Bank Rate, the Reference Bank Rate will not be determined for such Interest Period, then One-Month LIBOR for such Interest Period will be One-Month LIBOR for the preceding Interest Period.]

 

“Opinion of Counsel” means a written opinion of counsel who may, except as otherwise provided in a Basic Document, be employees of or counsel to MBFS USA, the Depositor or any of their respective Affiliates and, in the case of an opinion of counsel to be delivered to a party to the Basic Documents or another entity, (i) is delivered by counsel reasonably acceptable to the related recipient and (ii) is addressed to such recipient.

 

  

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“Optional Purchase” means the exercise by the Servicer of its option to purchase all remaining Receivables from the Issuer on any Distribution Date following the last day of a Collection Period as of which the Pool Balance is [10%] or less of the Cutoff Date Pool Balance.

 

“Original Trust Agreement” means the Trust Agreement, dated as of [____], 201[_], between the Depositor and the Owner Trustee, pursuant to which the Issuer was created, as amended and restated by the Amended and Restated Trust Agreement, dated as of [____], 201[_], between the Depositor and the Owner Trustee.

 

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

 

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

 

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

 

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

 

provided, however, that in determining whether the Noteholders of the requisite principal amount of the Notes Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under the Indenture or under any other Basic Document, Notes owned by the Issuer, any other obligor upon the Notes, the Depositor, the Seller, the Servicer or any of their respective Affiliates shall be disregarded and deemed not to be Outstanding unless all of the Notes of the related Class or Classes are owned by the Issuer, any other obligor upon the Notes, the Depositor, the Seller, the Servicer or any of their respective Affiliates, except that, in determining whether the Indenture Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee knows to be so owned 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 the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the Depositor, the Seller, the Servicer or any of their respective Affiliates.

 

“Owner Trust Estate” means the $1 capital contribution from the Depositor and the Trust Property.

 

“Owner Trustee” means [_____________], not in its individual capacity but solely as Owner Trustee under the Trust Agreement, and any successor in such capacity.

 

  

AA-17

  

“Paying Agent” means the Indenture Trustee or any other Person that meets the eligibility standards specified in Section 6.11 of the Indenture and is authorized by the Issuer to make or cause to be made payments to and distributions from the Collection Account, the Note Payment Account and the Reserve Fund, including payments of principal or interest on the Notes or the Certificates on behalf of the Issuer.  The Indenture Trustee shall be the initial Paying Agent.

 

“Pennsylvania Motor Vehicle Sales Finance Act” means 69 P.S. § 601 et seq.

 

“Permitted Lien” means, with respect to any Receivable or Financed Vehicle, any tax lien, mechanics’ lien or lien that attaches to a Receivable or Financed Vehicle by operation of law and arises solely as a result of an action or omission of the related Obligor.

 

“Performance Certification” means each certification delivered to the Certifying Person pursuant to Section 9.06 of the Sale and Servicing Agreement.

 

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

 

“Plan Asset Regulation” means 29 C.F.R. Section 2510.3-101 issued by the United States Department of Labor, as modified by Section 3(42) of ERISA.

 

“Pool Balance” means, as of any date, the aggregate Principal Balance of the Receivables as of such date; provided, however, that if the Receivables are purchased by the Servicer pursuant to Section 8.01(a) of the Sale and Servicing Agreement or are sold or otherwise liquidated by the Indenture Trustee following an Event of Default pursuant to Section 5.04 of the Indenture, the Pool Balance shall be deemed to be zero as of the last day of the Collection Period during which such purchase, sale or other liquidation occurs.

 

“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 2.06 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.

 

“Prepayment” means any prepayment, whether in part or in full, in respect of a Receivable.

 

“Principal Balance” means, with respect to any Receivable as of any date, the Amount Financed under such Receivable minus the sum of (i) that portion of all Monthly Payments actually received on or prior to such date allocable to principal using the Simple Interest Method and (ii) any Prepayment applied to reduce the unpaid principal balance of such Receivable; provided, however, that the Principal Balance of a (a) Defaulted Receivable shall be zero as of the last day of the Collection Period during which it became a Defaulted Receivable and (b) Purchased Receivable shall be zero as of the last day of the Collection Period during which it became a Purchased Receivable.

 

  

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“Priority Principal Distributable Amount” means, with respect to any Distribution Date, the excess, if any, of the Note Balance of the Class A Notes as of such Distribution Date (before giving effect to any payments made to Noteholders on that Distribution Date) over the Adjusted Pool Balance as of the last day of the preceding Collection Period; provided, however, that the Priority Principal Distributable Amount for each Distribution Date on and after the Final Scheduled Distribution Date for any Class of Class A Notes will not be less than the amount that is necessary to reduce the outstanding principal balance of such Class of Class A Notes to zero.

 

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

 

“Protected Purchaser” has the meaning specified in Section 8-303 of the UCC.

 

“Provided Information” means, with respect to (i) the Indenture Trustee, the Servicing Criteria Assessment provided under Section 9.05 of the Sale and Servicing Agreement by or on behalf of the Indenture Trustee and (ii) the Servicer, the information provided pursuant to Sections 3.11 and 3.12 of the Sale and Servicing Agreement, by or on behalf of the Servicer.

 

“PTCE” means Prohibited Transaction Class Exemption.

 

“PTCE 95-60” means Prohibited Transaction Class Exemption 95-60.

 

“Purchase Amount” means the price at which the Seller must repurchase or the Servicer must purchase a Receivable in an amount equal to the sum of (i) the Principal Balance of such Receivable plus (ii) the amount of accrued but unpaid interest on such Principal Balance at the related APR to the last day of the Collection Period of repurchase.

 

“Purchased Receivable” means a Receivable purchased or repurchased, as applicable, as of the last day of a Collection Period as to which payment of the Purchase Amount has been made by the Servicer pursuant to Section 3.03, 3.08 or 8.01 of the Sale and Servicing Agreement or by the Seller pursuant to Section 2.05 of the Sale and Servicing Agreement or Section 3.03(c) of the Receivables Purchase Agreement.

 

“Purchaser” means Daimler Retail Receivables, in its capacity as purchaser of the Receivables under the Receivables Purchase Agreement, and its successors in such capacity.

 

“Purchaser Basic Documents” means the Basic Documents to which the Purchaser is a party.

 

“Rating Agency” means [____] or [____]; provided, however, that if either of [____] and [____] cease to exist, Rating Agency shall mean any nationally recognized statistical rating organization or other comparable Person designated by the Issuer to replace such Person, written notice of which designation shall have been given to the Depositor, the Servicer and the Trustees.

 

“Rating Agency Condition” means, with respect to any action, a written notice shall have been given to [____] and [____] at least ten days (or such shorter period as is acceptable to [____] and [____]) prior to such action.

 

  

AA-19

  

“Receivable” means each motor vehicle retail installment sale contract or installment loan identified on the Schedule of Receivables.

 

“Receivable Files” has the meaning specified in Section 2.06 of the Sale and Servicing Agreement.

 

“Receivables Purchase Agreement” means the Receivables Purchase Agreement, dated as of [____], 201[_], between the Seller and the Purchaser.

 

“Receivables Purchase Price” means $[__________________].

 

“Record Date” means, with respect to (i) the Certificates and any Distribution Date, the close of business on the Business Day immediately preceding such Distribution Date and (ii) the Notes and any Distribution Date or Redemption Date, the close of business on the Business Day preceding such Distribution Date or Redemption Date; provided, however, that if Definitive Notes have been issued pursuant to Section 2.12 of the Indenture, Record Date shall mean, with respect to any Distribution Date or Redemption Date, the last day of the preceding Collection Period.

 

“Recoveries” means, with respect to any Collection Period following the Collection Period in which a Receivable became a Defaulted Receivable, all amounts received by the Servicer from whatever source (including Insurance Proceeds) with respect to such Defaulted Receivable during such Collection Period, minus the sum of:

 

(i)           expenses incurred by the Servicer in connection with the repossession and disposition of the related Financed Vehicle (to the extent not previously reimbursed to the Servicer); and

 

(ii)          all payments required by law to be remitted to the related Obligor.

 

“Redemption Date” means, in the case of a redemption of the Notes pursuant to Section 10.01 of the Indenture, the Distribution Date specified by the Servicer pursuant to such Section.

 

“Redemption Price” means, in the case of a redemption of the Notes pursuant to Section 10.01 of the Indenture, an amount equal to the unpaid principal amount of the Notes redeemed plus accrued and unpaid interest thereon through the related Interest Period at the related Interest Rates.

 

“Reference Bank Rate” means, for any Distribution Date and the related Interest Period, a rate determined on the basis of the rates at which deposits in U.S. dollars are offered by Reference Banks as of 11:00 a.m., London time, on the day that is two LIBOR Business Days prior to the immediately preceding Distribution Date to prime banks in the London interbank market for a period of one month, in amounts approximately equal to the then outstanding principal amount of the Class A-2 Notes.  In the event that the Reference Bank Rate is to be determined for any Distribution Date, the Indenture Trustee will request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two quotations are provided, the Reference Bank Rate will be the arithmetic mean of the quotations, rounded upwards to the nearest one-sixteenth of one percent. If on that date fewer than two quotations are provided as requested, the Reference Bank Rate will be the arithmetic mean, rounded 

 

  

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upwards to the nearest one-sixteenth of one percent, of the rates quoted by one or more major banks in New York City, selected by the Indenture Trustee after consultation with the Depositor, as of 11:00 a.m., New York City time, on that date to leading European banks for U.S. dollar deposits for a period of one month in amounts approximately equal to the then outstanding principal amount of the Class A-2 Notes.  If no quotation can be obtained, then the Reference Bank Rate will not be determined for such Distribution Date and the related Interest Period.

 

“Reference Banks” means, for any determination of the Reference Bank Rate, four major banks that are engaged in transactions in the London interbank market, selected by the Indenture Trustee after consultation with the Depositor.

 

“Regular Principal Distributable Amount” means, with respect to any Distribution Date, an amount equal to the lesser of (i) the Note Balance of the Notes on that Distribution Date (before giving effect to any payments of principal made to Noteholders on that Distribution Date) and (ii) an amount equal to the amount, if any, by which the Note Balance of the Notes on that Distribution Date (before giving effect to any payments of principal made to Noteholders on that Distribution Date) exceeds the excess, if any, of the Adjusted Pool Balance as of the last day of the related Collection Period minus the Target Overcollateralization Amount, less the amount of any Priority Principal Distributable Amount.

 

“Regulation AB” means subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, subject to such clarification and interpretation as has been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

 

“Reportable Event” means any event required to be reported on Form 8-K, including each event specified on Part IV of Schedule C (i) for which such Person is the responsible party and (ii) of which such Person (or in the case of the Indenture Trustee, as Responsible Officer of such Person) has actual knowledge.

 

“Representatives” means [__________________________], each in its capacity as representative of the underwriters named in the Underwriting Agreement.

 

“Required Payment Amount” has, with respect to each Distribution Date, the meaning specified in Section 4.08(a)(vii) of the Sale and Servicing Agreement.

 

“Required Rate” means [__]% per annum.

 

“Required Rating” means, with respect to any entity, the short-term credit rating of the related entity is at least equal to “[_]-1” by [____] and “[_]” by [____].

 

“Reserve Fund” means the account designated as such, and established and maintained pursuant to Section 4.01(a) of the Sale and Servicing Agreement.

 

  

AA-21

  

“Reserve Fund Amount” means, with respect to any Distribution Date, the amount on deposit in and available for withdrawal from the Reserve Fund on such Distribution Date (after giving effect to all deposits to and withdrawals from the Reserve Fund on the preceding Distribution Date (or, in the case of the first Distribution Date, the Closing Date), including all interest and other investment earnings (net of losses and investment expenses) earned on such amount on deposit therein during the related Collection Period.

 

“Reserve Fund Deficiency” means, as of any date, the excess of the Reserve Fund Required Amount over the Reserve Fund Amount.

 

“Reserve Fund Deposit” means an amount equal to $[_____________].

 

“Reserve Fund Draw Amount” means, with respect to any Distribution Date and the related Collection Period, the lesser of (i) the amount, if any, by which the Required Payment Amount exceeds Available Collections and (ii) the Reserve Fund Amount (before giving effect to any deposits to or withdrawals from the Reserve Fund on such Distribution Date); provided, however, that the Reserve Fund Draw Amount shall equal the Reserve Fund Amount if (a) the sum of Available Collections and the Reserve Fund Amount equals or exceeds the Note Balance, accrued and unpaid interest thereon and all amounts required to be paid to the Servicer and the Trustees on such Distribution Date or (b) on the last day of such Collection Period the Pool Balance is zero.

 

“Reserve Fund Property” means the Reserve Fund and all amounts, securities, investments, Financial Assets and other property deposited in or credited to the Reserve Fund.

 

“Reserve Fund Required Amount” means, for (i) any Distribution Date on which the Note Balance is greater than $0, [___]% of the Cutoff Date Adjusted Pool Balance and (ii) if the Notes have been paid in full, $0; provided, however, that the Reserve Fund Required Amount may not exceed the Note Balance.

 

“Responsible Officer” means, in the case of (i) the Indenture Trustee, any officer within the Corporate Trust Office of the Indenture Trustee with direct responsibility for the administration of the Indenture, including any principal, managing director, president, Vice President, assistant treasurer, assistant secretary or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above-designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject and (ii) the Owner Trustee, any officer in the Corporate Trust Administration department of the Owner Trustee with direct responsibility for the administration of the Issuer and, with respect to a particular corporate trust matter, any other officer of the Owner Trustee 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, dated as of [____], 201[_], among the Issuer, the Depositor, the Seller and the Servicer.

 

“Sarbanes-Oxley Certification” means the certification concerning the Issuer, to be signed by an officer of the Servicer or the Depositor and submitted to the Commission pursuant to the Sarbanes-Oxley Act of 2002.

 

  

AA-22

  

“Schedule of Receivables” means the schedule of Receivables attached as Schedule A to the Receivables Purchase Agreement.

 

“Secretary of State” means the Secretary of State of the State of Delaware.

 

“Securities” means the Notes and the Certificates.

 

“Securities Act” means the Securities Act of 1933.

 

“Securitization Transaction” means any transaction involving a sale or other transfer of receivables directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated asset-backed securities.

 

“Security Entitlement” has the meaning specified in Section 8-102(a)(17) of the UCC.

 

“Securityholders” means the Noteholders and the Certificateholders.

 

“Seller” means MBFS USA, in its capacity as seller of the Receivables under the Receivables Purchase Agreement or the Sale and Servicing Agreement, as the case may be, and its successors in such capacity.

 

“Seller Basic Documents” means the Basic Documents to which the Seller is a party.

 

“Servicer” means MBFS USA, in its capacity as Servicer under the Sale and Servicing Agreement, and its successors in such capacity.

 

“Servicer Basic Documents” means the Basic Documents to which the Servicer is a party.

 

“Servicer Termination Event” has the meaning specified in Section 7.01 of the Sale and Servicing Agreement.

 

“Servicer Termination Notice” means a notice given to the Servicer pursuant to Section 7.01 of the Sale and Servicing Agreement terminating all rights and obligations of the Servicer under the Sale and Servicing Agreement, other than the indemnification obligations of the Servicer under Section 6.02 of the Sale and Servicing Agreement, which shall survive such termination.

 

“Servicing Criteria” means the “servicing criteria” set forth in Item 1122(d) of Regulation AB.

 

“Servicing Criteria Assessment” means a report of the Indenture Trustee’s assessment of compliance with the Servicing Criteria (as identified substantially in the form of Part I of Schedule C of the Indenture, with the Indenture Trustee being shown as the “Responsible Party”) during the immediately preceding calendar year, as set forth under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.

 

“Servicing Officer” means any officer of the Servicer involved in, or responsible for, the administration and servicing of the Receivables whose name appears on a list of servicing 

 

  

AA-23

  

 

officers attached to an Officer’s Certificate furnished on the Closing Date to the Trustees by the Servicer, as such list may be amended from time to time by the Servicer in writing.

 

“Simple Interest Method” means the method of allocating a fixed level payment between principal and interest, pursuant to which a portion of such payment is allocated to interest in an amount equal to the product of the APR of the related Receivable multiplied by the unpaid Principal Balance of such Receivable multiplied by the period of time (expressed as a fraction of a year, based on either the actual number of days in the applicable calendar month and a 365-day year or a 30-day month and a 360-day year, as applicable) elapsed since the preceding payment was made and the remainder of such payment is allocated to principal.

 

“Simple Interest Receivable” means any Receivable under which each payment is allocated between principal and interest in accordance with the Simple Interest Method.

 

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

 

“Statutory Exemption” means the prohibited transaction exemption provided by Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code.

 

“Statutory Trust Statute” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code § 3801 et seq.

 

“Successor Servicer” means any entity appointed as a successor to the Servicer pursuant to Section 7.02 of the Sale and Servicing Agreement.

 

“Supplemental Servicing Fee” means the sum of (i) all extension fees charged in connection with extensions of Receivables and (ii) any administration fees and charges and all late payment fees and Prepayment fees actually collected (from whatever source) on the Receivables.

 

“Target Overcollateralization Amount” means, with respect to any Distribution Date, [___]% of the Cutoff Date Adjusted Pool Balance.

 

“Total Servicing Fee” means, for any Collection Period and the related Distribution Date, the sum of (i) the Monthly Servicing Fee for such Collection Period and (ii) all accrued but unpaid Monthly Servicing Fees for one or more prior Collection Periods.

 

“Total Trustee Fees” means, for any Collection Period and the related Distribution Date, with respect to each of the Trustees, the sum of (i) the Monthly Trustee Fees for such Collection Period and (ii) all accrued but unpaid Monthly Trustee Fees for the previous Collection Period.

 

“Transfer” means a sale, transfer, assignment, participation, pledge or other disposition of a Certificate.

 

“Transition Costs” means the reasonable costs and expenses (including reasonable attorneys’ fees but excluding overhead) incurred or payable by the Successor Servicer in connection with the transfer of servicing (whether due to termination, resignation or otherwise), including allowable compensation of employees and overhead costs incurred or payable in 

 

  

AA-24

  

 

connection with the transfer of the Receivable Files or any amendment to the Sale and Servicing Agreement required in connection with the transfer of servicing.

 

“Treasury Regulations” means regulations, including proposed or temporary regulations, promulgated under the Code.  References herein to specific provisions of proposed or temporary Treasury Regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

 

“Trust Agreement” means the Amended and Restated Trust Agreement, dated as of [____], 201[_], between the Depositor and the Owner Trustee.

 

“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 the Indenture Trustee), including all proceeds thereof.

 

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939 as in force on the Closing Date, unless otherwise specifically provided in the Indenture.

 

“Trust Property” means, as of any date, the Receivables and other property related thereto sold, transferred, assigned and conveyed to the Issuer pursuant to Section 2.01(a) of the Sale and Servicing Agreement.

 

“Trustee” means either the Owner Trustee or the Indenture Trustee, as the context requires.

 

“Trustees” means the Owner Trustee and the Indenture Trustee.

 

“UCC” means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction.

 

“Underwriting Agreement” means the Underwriting Agreement, dated [____], 201[_], among the Depositor, MBFS USA and the Representatives.

 

“United States” or “U.S.” means the United States of America.

 

 “Vice President” of any Person means any vice president of such Person, whether or not designated by a number or words before or after the title “Vice President”, who is a duly elected officer of such Person.

 

“Yield Supplement Overcollateralization Amount” means, with respect to any Distribution Date and the related Collection Period (or any day in such Collection Period), the aggregate amount by which the Principal Balance of each Receivable (other than a Defaulted Receivable or a Purchased Receivable) as of the last day of such Collection Period, exceeds the present value of all remaining Monthly Payments, calculated using the Discount Rate and assuming that all such Monthly Payments are made on the last day of each month and that each month has 30 days.  The Yield Supplement Overcollateralization Amount for each Distribution Date shall equal the amount set forth below:

 

  

AA-25

  

 

 

	

Distribution Date

	 	

Yield Supplement 

Overcollateralization Amount

	
Closing Date                          

	 	
$

	
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AA-26

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