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As Of Filer Filing For·On·As Docs:Size 2/24/17 KAR Auction Services, Inc. 10-K 12/31/16 102:19M |
Document/Exhibit Description Pages Size 1: 10-K 10-K for the Year Ended December 31, 2016 HTML 1.47M 4: EX-10.13 Exhibit 10.13 - Kar Aip Summary of Terms 2017 HTML 45K 5: EX-10.15 Exhibit 10.15 - 7th A&R Rpa HTML 1.07M 6: EX-10.16 Exhibit 10.16 - 4th Canadian A&R Rpa HTML 983K 7: EX-10.33 Exhibit 10.33 - Form of 2017 Rsu Award - Section HTML 50K 16 8: EX-10.38 Exhibit 10.38 - Form of 2017 Prsu Award Agreement HTML 55K 2: EX-10.9A Exhibit 10.9A - Employment Agreement - Kelly HTML 63K 3: EX-10.9B Exhibit 10.9B - Employment Agreement Amendment - HTML 31K Kelly 9: EX-21.1 Exhibit 21.1 - List of Subsidiaries HTML 58K 10: EX-23.1 Exhibit 23.1 - Consent of Independent Registered HTML 28K Public Accounting Firm 11: EX-31.1 Exhibit 31.1 - CEO Sox 302 Certification HTML 33K 12: EX-31.2 Exhibit 31.2 - CFO Sox 302 Certification HTML 33K 13: EX-32.1 Exhibit 32.1 - CEO Sox 906 Certification HTML 27K 14: EX-32.2 Exhibit 32.2 - CFO Sox 906 Certification HTML 27K 21: R1 Document and Entity Information HTML 54K 22: R2 Consolidated Statements of Income HTML 83K 23: R3 Consolidated Statements of Comprehensive Income HTML 43K 24: R4 Consolidated Balance Sheets HTML 130K 25: R5 Consolidated Balance Sheets (Parenthetical) HTML 52K 26: R6 Consolidated Statements of Stockholders' Equity HTML 81K 27: R7 Consolidated Statements of Stockholders' Equity HTML 26K (Parenthetical) 28: R8 Consolidated Statements of Cash Flows HTML 132K 29: R9 Organization and Other Matters HTML 45K 30: R10 Summary of Significant Accounting Policies HTML 99K 31: R11 Acquisitions and Equity Method Investments HTML 45K 32: R12 Stock and Stock-Based Compensation Plans HTML 150K 33: R13 Net Income Per Share HTML 52K 34: R14 Allowance for Credit Losses and Doubtful Accounts HTML 58K 35: R15 Finance Receivables and Obligations Collateralized HTML 71K by Finance Receivables 36: R16 Goodwill and Other Intangible Assets HTML 101K 37: R17 Property and Equipment HTML 59K 38: R18 Self Insurance and Retained Loss Reserves HTML 44K 39: R19 Long-Term Debt HTML 86K 40: R20 Financial Instruments HTML 58K 41: R21 Leasing Agreements HTML 47K 42: R22 Income Taxes HTML 132K 43: R23 Employee Benefit Plans HTML 31K 44: R24 Commitments and Contingencies HTML 40K 45: R25 Accumulated Other Comprehensive Income (Loss) HTML 38K 46: R26 Segment Information HTML 235K 47: R27 Quarterly Financial Data (Unaudited) HTML 126K 48: R28 Summary of Significant Accounting Policies HTML 173K (Policies) 49: R29 Summary of Significant Accounting Policies HTML 57K (Tables) 50: R30 Stock and Stock-Based Compensation Plans (Tables) HTML 126K 51: R31 Net Income Per Share (Tables) HTML 46K 52: R32 Allowance for Credit Losses and Doubtful Accounts HTML 61K (Tables) 53: R33 Finance Receivables and Obligations Collateralized HTML 61K by Finance Receivables (Tables) 54: R34 Goodwill and Other Intangible Assets (Tables) HTML 98K 55: R35 Property and Equipment (Tables) HTML 63K 56: R36 Self Insurance and Retained Loss Reserves (Tables) HTML 40K 57: R37 Long-Term Debt (Tables) HTML 72K 58: R38 Financial Instruments (Tables) HTML 50K 59: R39 Leasing Agreements (Tables) HTML 42K 60: R40 Income Taxes (Tables) HTML 132K 61: R41 Accumulated Other Comprehensive Income (Loss) HTML 35K (Tables) 62: R42 Segment Information (Tables) HTML 230K 63: R43 Quarterly Financial Data (Unaudited) (Tables) HTML 125K 64: R44 Organization and Other Matters (Details) HTML 63K 65: R45 Summary of Significant Accounting Policies HTML 124K (Details) 66: R46 Equity Method Investments (Details) HTML 53K 67: R47 Acquisitions (Details) HTML 77K 68: R48 Stock and Stock-Based Compensation Plan Summary HTML 41K (Details) 69: R49 KAR Auction Services, Inc. Stock-Based HTML 168K Compensation Plans (Details) 70: R50 Service and Exit Options (Details) HTML 116K 71: R51 Assumptions (Details) HTML 43K 72: R52 Employee Stock Purchase Plan (Details) HTML 38K 73: R53 Share Repurchase Plan (Details) HTML 54K 74: R54 Net Income Per Share (Details) HTML 63K 75: R55 Allowance for Credit Losses and Doubtful Accounts HTML 37K (Details) 76: R56 Allowance for Credit Losses and Doubtful Accounts HTML 35K (Details 2) 77: R57 Finance Receivables and Obligations Collateralized HTML 103K by Finance Receivables (Details) 78: R58 Goodwill and Other Intangible Assets (Details) HTML 42K 79: R59 Goodwill and Other Intangible Assets (Details 2) HTML 41K 80: R60 Goodwill and Other Intangible Assets (Details 3) HTML 49K 81: R61 Goodwill and Other Intangible Assets (Details 4) HTML 43K 82: R62 Property and Equipment (Details) HTML 69K 83: R63 Property and Equipment (Details 2) HTML 34K 84: R64 Self Insurance and Retained Loss Reserves HTML 48K (Details) 85: R65 Long-Term Debt Summary and Future Principle HTML 87K Payments (Details) 86: R66 Credit Facilities (Details) HTML 136K 87: R67 Other Debt (Details) HTML 42K 88: R68 Financial Instruments (Details) HTML 63K 89: R69 Financial Instruments (Details 2) HTML 37K 90: R70 Leasing Agreements (Details) HTML 70K 91: R71 Income Taxes (Details) HTML 174K 92: R72 Income Taxes (Details 2) HTML 32K 93: R73 Income Taxes (Details 3) HTML 53K 94: R74 Employee Benefit Plans (Details) HTML 34K 95: R75 Commitments and Contingencies (Details) HTML 54K 96: R76 Accumulated Other Comprehensive Income (Loss) HTML 38K (Details) 97: R77 Segment Information (Details) HTML 140K 98: R78 Segment Information (Details 2) HTML 44K 99: R79 Quarterly Financial Data (Unaudited) (Details) HTML 77K 101: XML IDEA XML File -- Filing Summary XML 172K 100: EXCEL IDEA Workbook of Financial Reports XLSX 127K 15: EX-101.INS XBRL Instance -- kar-20161231 XML 3.60M 17: EX-101.CAL XBRL Calculations -- kar-20161231_cal XML 285K 18: EX-101.DEF XBRL Definitions -- kar-20161231_def XML 922K 19: EX-101.LAB XBRL Labels -- kar-20161231_lab XML 2.22M 20: EX-101.PRE XBRL Presentations -- kar-20161231_pre XML 1.41M 16: EX-101.SCH XBRL Schema -- kar-20161231 XSD 231K 102: ZIP XBRL Zipped Folder -- 0001395942-17-000034-xbrl Zip 342K
Exhibit |
ARTICLE 1 INTERPRETATION | 2 | |
1.1 | Definitions | 2 |
1.2 | Headings | 20 |
1.3 | Number,
Gender, Etc | 20 |
1.4 | Non-Business Days | 20 |
1.5 | Governing Law | 21 |
1.6 | References to Statutes | 21 |
1.7 | Severability | 21 |
1.8 | Currency | 21 |
1.9 | Schedules | 21 |
ARTICLE
2 PURCHASES AND INCREASES | 22 | |
2.1 | Purchase Request and Increase | 22 |
2.2 | Purchase and Sale | 23 |
2.3 | Ownership Interests | 23 |
2.4 | Transfer
From Deposit Accounts to Collection Account | 24 |
2.5 | Allocations of Seller's Share of Collections Before the Termination Date | 24 |
2.6 | Allocation of Trust's Share of Collections Before the Termination Date | 24 |
2.7 | Payments from Collection Account | 25 |
2.8 | Allocation
and Payment of Seller's Share of Collections After a Termination Date | 26 |
2.9 | Allocation of Trust's Share of Collections After a Termination Date | 26 |
2.10 | Payments from Collection Account After a Termination Date | 27 |
2.11 | Purchases Limited by Program Limit | 27 |
2.12 | Program
Limit | 28 |
2.13 | Voluntary Paydown of Investment | 28 |
2.14 | Cash Reserve Account | 28 |
2.15 | Calculations | 29 |
2.16 | Specified Ineligible Receivables | 29 |
2.17 | Collection
Account | 29 |
ARTICLE 3 CONDITIONS PRECEDENT | 30 | |
3.1 | Conditions Precedent for the Initial Purchase | 30 |
3.2 | Conditions Precedent in Favour of the Trust for Purchase/All Increases | 31 |
ARTICLE 4
REPRESENTATIONS AND WARRANTIES | 32 | |
4.1 | General Representations and Warranties of the Seller | 32 |
4.2 | Survival | 35 |
4.3 | Representations and Warranties of the Trust | 35 |
4.4 | Survival | 36 |
ARTICLE 5
ADMINISTRATION | 36 | |
5.1 | Designation of the Servicer | 36 |
5.2 | Standard of Care | 36 |
5.3 | Authorization
of Servicer | 36 |
5.4 | Enforcement of Contracts | 37 |
5.5 | Assignment for Purpose of Enforcement | 37 |
5.6 | Deposit of Collections | 37 |
5.7 | Description
of Services | 37 |
5.8 | Affirmative Covenants of the Servicer | 39 |
5.9 | Reporting Requirements of the Servicer | 42 |
5.10 | Negative Covenants of the Servicer | 43 |
5.11 | Servicer Termination Events | 44 |
5.12 | Effecting
a Servicer Transfer | 46 |
5.13 | Appointment of Replacement Servicer | 46 |
5.14 | Additional Servicer Covenants Following a Servicer Transfer | 46 |
5.15 | Trust Rights Following a Servicer Transfer | 47 |
5.16 | Power
of Attorney; Further Assurances | 47 |
5.17 | Deemed Collections | 48 |
ARTICLE 6 TRIGGER EVENTS | 49 | |
6.1 | Meaning of Trigger Event | 49 |
6.2 | Action Upon
Occurrence of a Trigger Event | 53 |
6.3 | Optional Repurchase of Pool Receivables | 53 |
53 | ||
7.1 | Affirmative Covenants of the Seller | 53 |
7.2 | Reporting
Requirements of the Seller | 55 |
7.3 | Negative Covenants of the Seller | 56 |
7.4 | Covenants of the Trust | 57 |
ARTICLE 8 PERFORMANCE GUARANTEE | 57 | |
8.1 | Performance
Guarantee | 57 |
8.2 | Guarantee Unconditional | 58 |
8.3 | Recourse against Servicer | 59 |
8.4 | Authorization by the Performance Guarantor | 59 |
8.5 | No Subrogation | 59 |
8.6 | Stay
of Acceleration | 59 |
8.7 | Representations and Warranties | 60 |
8.8 | Payments | 61 |
ARTICLE 9 INDEMNIFICATION | 62 | |
9.1 | Indemnification by the Seller | 62 |
9.2 | Notification
of Potential Liability | 64 |
9.3 | Litigation | 64 |
9.4 | Tax Indemnity | 64 |
9.5 | Tax Credit | 65 |
ARTICLE 10 MISCELLANEOUS | 66 | |
10.1 | Liability
of the Trust and the Securitization Agent | 66 |
10.2 | Delegation in Favour of Securitization Agent | 66 |
10.3 | Change
in Circumstances | 66 |
10.4 | Amendments, Waivers, Etc. | 68 |
10.5 | Notices, Etc. | 68 |
10.6 | No Waiver; Remedies | 68 |
10.7 | Binding Effect; Assignability | 68 |
10.8 | Costs
and Expenses | 68 |
10.9 | Confidentiality | 69 |
10.10 | Effect of Agreement | 69 |
10.11 | Agreement Non-Exclusive | 69 |
10.12 | No Set-off | 69 |
10.13 | Termination | 69 |
10.14 | Discharge
of Certain Registrations in the Province of Quebec | 70 |
10.15 | Execution in Counterparts | 70 |
10.16 | Amendment and Restatement | 70 |
(a) | as to which any payment, or part thereof, remains unpaid for more than 90 days after the due date for such payment; |
(b) | which, consistent with the Credit and Collection Polices, would be written off the Seller's books as uncollectible; or |
(c) | which
is converted to a long term payment plan in the form of a note or other similar document; |
(a) | direct
obligations of, or obligations fully guaranteed as to the timely payment of principal and interest by, the Government of Canada or the government of British Columbia, Alberta or Ontario, provided any such government is rated not less than R-1 (middle) by DBRS; |
(b) | any security having a rating of at least R-1 (middle) from DBRS, or, in the case of asset backed commercial paper, a rating of a least R-1 (high) from DBRS, but for greater certainty, excluding commercial paper that is extendable by its terms; |
(c) | any
other class of investments approved in writing by the Trust (other than those set out in (a) and (b) above); and |
(d) | without limiting the generality of the foregoing, if qualified under (b) or (c) above, securities of the Bank of Montreal and any Affiliate thereof may be considered Eligible Investments for the purposes of this definition; |
(a) | the Obligor of which (i) is a Person
that is a resident of Canada and located in a province or territory of Canada, or is a co-signer or guarantor of the such Receivable and is resident in the United States, (ii) is not the Government of Canada or any agency or instrumentality thereof or any federal crown corporation, and (iii) is not any provincial or territorial government or agency thereof; |
(b) | that is not a Defaulted Receivable or Delinquent Receivable; |
(c) | which is denominated and payable to the Seller only in Canadian dollars in Canada; |
(d) | which,
together with the related Contract and Related Security, has been originated or acquired in Canada by the Seller in the ordinary course of business; |
(e) | which arises under a Contract which, together with such Receivable and the Related Security in respect thereof, is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor thereof, enforceable by the Seller and its assigns against such Obligor in accordance with its terms subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and to equitable principles of general application; |
(f) | which is secured by the Related Security which contains customary and enforceable provisions such that the rights and remedies of the Seller and its assigns are adequate for realization against the collateral of the benefits of the security, including the Related Security of such Receivable, subject to the limitations on enforceability in (e) above; |
(g) | in respect of which the Related Vehicle and Proceeds Security, as against creditors of the applicable
Obligor, is a perfected, valid, subsisting and enforceable Security Interest in the Financed Vehicle in favour of the Seller, perfected by all necessary or appropriate filings, registrations, recordings or other actions in each jurisdiction necessary to ensure the perfection of such Security Interest for the term thereof and which, in respect of the Related Vehicle Security, is subject only to Security Interests in favour of other Persons which are subordinate in priority to the Related Vehicle Security, Operation of Law Claims and Government and Employee Claims, and provided that, to the knowledge of the Seller at such time, no enforcement or collection proceedings have been |
(h) | for which the interest of the Seller in the Receivable and the Related Security related thereto and the Contract giving rise thereto, as against creditors of the Seller, is free and clear of all Security Interests and rights of others, other than Government and Employee Claims, Operation of Law Claims, Blocked Account Claims and those created pursuant to this Agreement; |
(i) | upon
the purchase of an interest in such Receivable and the Related Security in respect thereof by the Trust, the Trust will obtain good and marketable title to the Trust's Co-Ownership Interest therein free and clear of any Security Interest created by, or arising through, the Seller (as opposed to a Security Interest created by, or arising through an Obligor) other than Blocked Account Claims; |
(j) | the sale of which pursuant to the terms hereof does not contravene or conflict with any law, rules or regulations applicable thereto, or require the consent of the Obligor or any other Person; |
(k) | in
respect of which, to the knowledge of the Seller, no enforcement action, whether by repossession or otherwise, has been taken by any Person in respect of the related Financed Vehicle; |
(l) | there is no federal, provincial or local law or ordinance under which such Receivable or the Related Security is subject to any Taxes, nor will any payment or remittance to be made by or on behalf of the Seller on its own behalf or on behalf of any Obligor under this Agreement be subject to any Taxes; provided, however, that this statement shall not extend to any Taxes payable by, or required to be withheld by the Seller on account of Taxes payable on the income or capital of the Trust or Taxes payable in respect of GST or PST payable by Obligors; |
(m) | (i)
which satisfies all applicable requirements of the Credit and Collection Policies, (ii) other than with respect to a Rental Receivable, whose terms require a minimum principal payment of not less than [*] plus accrued interest and, if applicable, payment of the applicable floorplan fees or curtailment fees, on each Curtailment Date, provided that, subject to a Special Concentration Percentage, such minimum principal payment for a Receivable may be less than [*] so long as it is at least [*], (iii) for which all payments required to be made pursuant to the related Contract in connection with any Curtailment Date extension have not been waived and have been made within [*] of each such extension, (iv) whose terms, including the due date thereof have not otherwise been amended or modified in any material respect, and [*]; |
(n) | which
is payable on demand and which the related Contract requires repayment on the earlier of (i) [*] following the sale of the related Financed Vehicle, and (ii) the Curtailment Date for such Receivable; |
(o) | which arises from the making of a loan to finance the purchase of (i) an automobile or light duty truck,
driven or drawn by mechanical power, manufactured primarily for use on the public streets, roads or highways, with two axles or (ii) a Specialty Vehicle; |
(p) | where not more than [*] of the aggregate Principal Balance of all Receivables of the Obligor of such Receivable and its Affiliates are Defaulted Receivables; |
(q) | the Obligor of which is not an Affiliate of the Seller or the Performance Guarantor, an Excluded Obligor or a father, mother, son or daughter (or any Affiliate thereof) of any officer or director of the Seller
or its Affiliates; |
(r) | the Obligor of which is not, to the knowledge of the Seller, subject to any proceedings of the type described in Sections 5.11(g) or 5.11(h); |
(s) | which is guaranteed by the related Obligor's parent, general partner or owners, provided that, in the Servicer's discretion, guarantees shall not be required from (i) public companies, (ii) private equity firms or other similar entities, or (iii) passive partners or minority partners when an operating partner has provided a guarantee; |
(t) | which
is not a Specified Ineligible Receivable or an Excluded Receivable; |
(u) | with respect to which the Trust has not given Seller at least five (5) Business Days notice that such Receivable will not be an Eligible Receivable hereunder, provided that such designation is in good faith and based on a reasonable business judgement by the Trust that such Receivable should not be considered an Eligible Receivable; |
(v) | for which the Obligor has not "short-paid" the Receivables or paid with non-sufficient funds; |
(w) | if
the Receivable is an Auction Credit, then (i) the wholesale auction is not fronting for a government or a governmental subdivision or agency, (ii) the Servicer has received a bill of sale evidencing the transaction between the wholesale auction and purchasing dealer, (iii) the wholesale auction has been underwritten in accordance with the Credit and Collection Policies’ requirements for platinum dealers, (iv) a PPSA financing statement or equivalent has been filed against the wholesale auction, and (v) clauses (e) and (s) above shall be deemed to be satisfied if the wholesale auction, rather than the applicable dealer, signs the applicable Contract; and |
(x) | (i)
except for any Contract which has been executed electronically, there is only one original, executed copy of such Contract held by the Seller and (ii) for any Contract which has been executed electronically, such Contact has been executed in compliance with all applicable e-sign laws and the Seller has access to an electronic copy of such Contract executed by all parties thereto which can be printed and used to enforce such Contract; |
TA x TR |
365 |
(a) | indebtedness for borrowed money (including, without limitation, amounts payable to Affiliates); |
(b) | obligations
evidenced by bonds, debentures, notes or other similar instruments; |
(c) | the redemption price of any redeemable preference shares; |
(d) | obligations in respect of letters of credit or similar instruments issued or accepted by any bank or other institution; and |
(e) | obligations under direct or indirect
guarantees in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (a) through (d) above; |
(a) | the Servicer has failed to deliver a Servicer Report or a Portfolio
Certificate in accordance with the terms hereof; |
(b) | any of the statements contained in Section 3.2(b) are not satisfied and have not been waived by the Trust; or |
(c) | the Trust's Share is greater than 100%; |
(a) | the Related Vehicle and Proceeds Security; |
(b) | all of the Seller's interest in all warranties, indemnities, service obligations and other contract
rights issued or granted by, or otherwise existing under applicable |
(c) | all guarantees and Security Interests (other than the Related Vehicle and Proceeds Security) from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract
related to such Receivable, or otherwise, together with all financing statements or other instruments describing any collateral securing such Receivable, and including all Security Interests (other than the Related Vehicle and Proceeds Security) granted by any Person (whether or not the primary Obligor on such Receivable) under or in connection therewith and purporting to secure payment of such Receivable; |
(d) | all Records relating to such Receivable, including all original Contracts; |
(e) |
(f) | all proceeds of or relating to any of the foregoing, including proceeds of or relating to the Receivable; |
(i) | [*]; |
(ii) | [*]; |
(iii) | [*]; |
(iv) | [*]; |
(v) | [*];
|
(vi) | [*]; |
(vii) | [*]; |
(viii) | [*]; |
(ix) | [*];
and |
(x) | [*]; |
(a) | the
Trigger Date; |
(b) | January 31, 2020, which date may be extended by notice from the Trust to the Seller upon agreement to such extension by the Seller and the Trust; and |
(c) | the date the Seller designates as the Termination Date upon 30 days' notice to the Trust; |
I + DP + LR |
NRPB |
I | = | the
Investment at the time of computation, reduced by the aggregate amount deposited in the Collection Account on (i) with respect to any Servicer Report, the last Business Day of the immediately prior Collection Period, or (ii) with respect to any Portfolio Certificate, the last Business Day of the prior calendar week, provided that in the case of each of (i) and (ii) above, an equal amount is wired to the Trust on the immediately following Remittance Date to pay down the Investment, |
DP | = | the aggregate unfulfilled purchase amounts of the Trust at such time, |
LR | = | the Loss Reserve
at the time of computation, |
NRPB | = | the Net Receivables Pool Balance at the time of computation, |
1.2 | Headings |
1.3 | Number,
Gender, Etc. |
1.4 | Non-Business Days |
1.5 | Governing
Law |
1.6 | References to Statutes |
1.7 | Severability |
1.8 | Currency |
1.9 | Schedules |
Schedule "A" | - | Form of Purchase Request |
Schedule "B" | - | Location of Records |
Schedule "C" | - | Form
of Servicer Report |
Schedule "D" | - | Form of Portfolio Certificate |
Schedule "E" | - | Deposit Accounts |
Schedule "F" | - | Form of Increase Request |
Schedule "G" | - | Form
of Quebec Assignment |
Schedule "H" | - | Net Receivables Pool Balance Calculation |
2.1 | Purchase
Request and Increase |
(a) | At any time on or after February 8, 2010 and on or prior to February 15, 2010, the Seller may, by delivery of an appropriately completed Purchase Request to the Trust, request the Trust to purchase an undivided co-ownership interest in the Receivables Pool from the Seller. The Purchase Request shall specify (i) the amount of the Cash Payments to be paid to the Seller (which shall not be less than $30,000,000 and shall be an integral multiple of $100,000) and the Net Cash Payment to be paid to the Seller, and (ii) the date of such Purchase. |
(b) | From
time to time after the Purchase hereunder up to the Termination Date, the Seller may, by delivery of an appropriately completed Increase Request delivered to the Trust at least one Business Day prior to the date of the proposed Increase, request the Trust to increase the Investment and the amount of its undivided co-ownership interest in the Receivables Pool. The Increase Request shall specify, (i) the amount of the Cash Payment and the Net Cash Payment to be paid to the Seller, (ii) the date of such Increase (which shall be a Remittance Date), and (iii) the account number of the Seller into which the Net Cash Payment should be deposited. |
(c) | Notwithstanding the foregoing, the Trust may, in its sole discretion by written notice to the Seller
and the Servicer by 5:00 p.m. on the date of receipt of an Increase Request, elect to fund any requested Increase no later than the [*] day following the Seller's delivery of an Increase Request (the "Deferred Increase Date"), rather than on the requested Increase date. In the event that the Trust so elects to defer funding an Increase, subject to the adjustment of the Investment for certain purposes as described in Section 2.1(d), the Trust shall be obligated to fund such Increase no later than such Deferred Increase Date so long as all applicable conditions precedent to such Increase pursuant to Section 3.2 were satisfied on the related requested Increase date (regardless of whether such conditions precedent to funding are not satisfied thereafter or on the Deferred Increase Date). The Trust may (in its sole discretion) fund such Increase on any Business Day prior to such Deferred Increase Date. Subject to any adjustment
of the Cash Payment payable as described in Section 2.1(d), the Seller shall be obligated to accept the proceeds of any such Increase on the date funded by the Trust. |
(d) | Future Increase Requests and reports shall be calculated on a pro forma basis including any unfulfilled Increases in the calculation of the Investment (e.g., the calculation of the Trust's Share shall include such unfulfilled Increases). For the avoidance of doubt, any payments required by clause (c) of the definition of Paydown Date shall be satisfied first by reducing the current balance of any unfulfilled Increases to zero before allocating the Trust's Share of Collections to |
2.2 | Purchase and Sale |
(a) | If the conditions precedent in Section 3.1 (in the case of the Purchase hereunder) and Section 3.2 are satisfied or have not been satisfied but have been waived by the Trust, on the date specified in the Purchase Request, the Seller shall sell, assign and transfer to the Trust, and the Trust shall purchase, an undivided co-ownership interest in the Receivables Pool, having the
terms and attributes and conferring upon the Trust the entitlements and property rights set out in Section 2.3, for the Purchase Price applicable to the Purchase, and the Trust shall deposit the applicable Cash Deposit Amount into the Cash Reserve Account and pay to the Seller the Net Cash Payment in respect thereof on the date of such Purchase. Upon the making of such payment and deposit, all of the Seller's right, title and interest in and to an undivided co-ownership interest in the Receivables Pool shall be sold, assigned and transferred to the Trust on a fully serviced basis without recourse (except as provided by this Agreement), without the need of any formality or other instrument of assignment. |
(b) | If the conditions precedent in Section
3.2 are satisfied or have not been satisfied but have been waived by the Trust, on the date specified in an Increase Request, the Seller shall sell, assign and transfer to the Trust, and the Trust shall purchase, an additional undivided co-ownership interest in the Receivables Pool, having the terms and attributes and conferring upon the Trust the entitlements and property rights set out in Section 2.3, for the additional Purchase Price applicable to the Increase, and the Trust shall deposit the applicable Cash Deposit Amount into the Cash Reserve Account and pay to the Seller the Net Cash Payment in respect thereof on the date of such Increase and thereafter the Investment shall be increased by the amount of the Cash Payment and the Trust's Share shall be calculated based on such increased Investment. Upon the making of such payment and deposit pursuant to the Increase Request, an additional interest in the Receivables Pool shall be sold, assigned and transferred to
the Trust on a fully serviced basis without recourse (except as provided by this Agreement), without the need of any formality or other instrument of assignment, such that the Trust's Share shall be calculated based on such increased Investment. |
(c) | In addition to Sections 2.2(a) and 2.2(b), but subject to the last sentence of this Section 2.2(c), the Seller shall, on the date hereof, execute and deliver to the Trust the Quebec Assignment. For greater certainty, to the extent there is any conflict or inconsistency between this Agreement and the Quebec Assignment, the Quebec Assignment shall govern. |
2.3 | Ownership
Interests |
2.4 | Transfer From Deposit Accounts to Collection Account |
2.5 | Allocations of Seller's Share of Collections Before the Termination Date |
(a) | to the Replacement Servicer, an amount equal to the Seller's Share of the sum of any Replacement Servicer Fee and any Collection Costs, and any arrears thereof, and to the Backup Servicer, the Seller's Share of any Backup Servicing Fees and Transition Expenses, and any arrears thereof; |
(b) | in respect of the Cash
Reserve Account, the amount, if any, by which the balance on deposit in the Cash Reserve Account is less than the Cash Reserve Required Amount; and |
(c) | to the Seller, any remaining balance on account of the Seller's Retained Interest. |
2.6 | Allocation of Trust's Share of Collections Before the Termination Date |
(a) | to the Replacement Servicer, an amount equal to the Trust's Share of the sum of any Replacement Servicer Fee and any Collection Costs, and any arrears thereof, |
(b) | to the Trust, an amount equal to the sum of the Funding Discount and the Standby Fees accrued through such day; |
(c) | to the Trust, subject to Section 2.1(d), if such Business Day is a Paydown Date, an amount up to the amount of the Investment for application in reduction of the Investment; provided that if a Paydown Date has occurred pursuant to clause (c) of the definition of Paydown Date, the amount to be applied in reduction
of the Investment shall only be the amount (subject to such amounts being in integral multiples of $100,000) necessary to cause the Trust's Share to be reduced to an amount equal to or less than 100%; |
(d) | into the Cash Reserve Account, the amount, if any (after giving effect to Section 2.5(b)), by which the balance on deposit in the Cash Reserve Account is less than the Cash Reserve Required Amount; |
(e) | to the Trust, if a voluntary paydown of the Investment is being made, for application in reduction of the Investment in
accordance with Section 2.13; |
(f) | to the relevant Indemnified Party, an amount equal to the aggregate amounts owed to such Indemnified Party pursuant to Sections 9.1 or 9.4 that remain unpaid; |
(g) | to the Trust, any other amounts owing to the Trust hereunder; and |
(h) | to the Seller, any remaining balance
as Deferred Purchase Price. |
2.7 | Payments from Collection Account |
(a) | amounts allocated for the benefit of the Replacement Servicer and Backup Servicer pursuant to Sections 2.5(a) and 2.6(a) shall be paid to the Replacement Servicer and Backup Servicer, as applicable, when due and payable; |
(b) | amounts
allocated pursuant to Sections 2.5(b) and 2.6(d) shall be deposited to the Cash Reserve Account; |
(c) | amounts allocated pursuant to (i) Section 2.6(b) shall be paid to the Trust on each Remittance Date and (ii) Section 2.6(g) shall be paid to the Trust on the second Remittance Date of each month; |
(d) | amounts allocated pursuant to Sections 2.6(c) and 2.6(e) shall be paid to the Trust on each Remittance Date and the Investment shall be reduced by the amounts distributed and applied pursuant to such Sections; |
(e) | amounts
allocated for the benefit of an Indemnified Party pursuant to Section 2.6(f) shall be paid when due and payable to such Indemnified Party or as such Indemnified Party may otherwise direct; and |
(f) | amounts allocated pursuant to Section 2.5(c) shall be paid to the Seller in respect of the Seller's Retained Interest on each Business Day and amounts allocated pursuant to Section 2.6(h) shall be paid to the Seller in respect of Deferred Purchase Price on each Business Day. |
2.8 | Allocation
and Payment of Seller's Share of Collections After a Termination Date |
(a) | to the Replacement Servicer, an amount equal to the Seller's Share of the sum of any Replacement Servicer Fee and any Collection Costs, and any arrears thereof, and to the Backup Servicer, the Seller's Share of any Backup Servicing Fees and Transition Expenses, and any arrears thereof; |
(b) | to
the relevant Indemnified Party, an amount equal to the aggregate amounts owed to such Indemnified Party pursuant to Sections 9.1 or 9.4 that remain unpaid; and |
(c) | to the Seller, the balance on account of the Seller's Retained Interest. |
2.9 | Allocation of Trust's Share of Collections After a Termination Date |
(a) | to the Replacement Servicer, an amount equal to the Trust's Share of the sum of any Replacement Servicer Fee and any Collection Costs, and any arrears thereof, and to the Backup Servicer, the Trust's Share of the Backup Servicing Fees and Transition Expenses, and any arrears thereof; |
(b) | to the Trust, an amount equal to the Funding Discount accrued through such day; |
(c) | to
the Trust, an amount equal to the Investment; |
(d) | to the extent the amounts payable under Section 2.8(b) have not been satisfied in full, to the relevant Indemnified Party, an amount equal to the aggregate amounts |
owed
to such Indemnified Party pursuant to Sections 9.1 or 9.4 that remain unpaid; |
(e) | to the Trust, any other amounts owing to the Trust hereunder; and |
(f) | to the Seller, the balance, as Deferred Purchase Price. |
2.10 | Payments from Collection Account After a Termination Date |
(a) | amounts held on deposit for the benefit of the Replacement Servicer pursuant to Sections 2.8(a) and 2.9(a) shall be paid to the Replacement Servicer when due and payable; |
(b) | amounts held on deposit for the benefit of the Backup Servicer pursuant to Sections 2.8(a) and 2.9(a) shall be paid to the Backup Servicer when due and payable; |
(c) | amounts
held on deposit for the benefit of an Indemnified Party pursuant to Sections 2.8(b) and 2.9(d) shall be paid to such Indemnified Party or as such Indemnified Party may otherwise direct, when due and payable; |
(d) | amounts allocated pursuant to Sections 2.9(b) and 2.9(e) shall be paid to the Trust on such dates as the Trust may determine; |
(e) | amounts allocated pursuant to Section 2.9(c) shall be paid to the Trust on each Remittance Date and the Investment shall be reduced by such amounts distributed; and |
(f) | amounts
allocated pursuant to Section 2.8(c) shall be paid to the Seller in respect of the Seller's Retained Interest on each Business Day and amounts allocated pursuant to Section 2.9(f) shall be paid to the Seller on account of Deferred Purchase Price on each Business Day. |
2.11 | Purchases Limited by Program Limit |
2.12 | Program
Limit |
2.13 | Voluntary Paydown of Investment |
(a) | unless otherwise agreed by the Trust, the amount of any such reduction shall be not less than $1,000,000 and shall be an integral multiple of $1,000,000, and the Investment after giving effect to such reduction shall be not less than $30 million, and |
(b) | the
Seller shall use reasonable efforts to choose a reduction amount, and the date of commencement thereof, so that to the extent practicable such reduction shall commence and conclude in the same Collection Period. |
2.14 | Cash Reserve Account |
2.15 | Calculations |
2.16 | Specified Ineligible Receivables |
2.17 | Collection Account |
3.1 | Conditions Precedent for the Initial Purchase |
(a) | a certificate of an officer of the Seller attaching copies of its constating documents; |
(b) | a
certificate of status for the Seller in the Province of Ontario and a certificate of compliance for the Performance Guarantor in the State of Delaware; |
(c) | resolutions of the board of directors of the Seller approving and authorizing the execution, delivery and performance of this Agreement and the other documents to be delivered by the Seller hereunder, and the Purchase and any Increase hereunder up to the Program Limit, certified by a senior officer of the Seller to be in full force and effect as of the Initial Closing Date; |
(d) | incumbency
certificates of the officers of the Seller executing this Agreement and the other documents to be delivered by the Seller hereunder showing their names, offices and specimen signatures on which certificates the Trust shall be entitled to conclusively rely until such time as the Trust receives from the Seller a replacement certificate meeting the requirements of this Section 3.1(d); |
(e) | a copy of the Credit and Collection Policies and sample copies of each of the forms of Contract and other documents used or acquired by the Seller in each of the provinces of Canada with respect to Financed Vehicles and the Related Security, including credit application forms; |
(f) | reports
showing the results of the searches conducted in the Provinces of Ontario and Quebec against the Seller and its predecessors on the Business Day immediately preceding the Initial Closing Date to determine the existence of any Security Interests in the Pool Assets; |
(g) | copies of verification statements, officially stamped or marked to indicate that copies of such documents have been filed with the appropriate Governmental Authorities in the Provinces of Ontario and Quebec or, if officially stamped copies are not available prior to the Initial Closing Date, photocopies of documents accepted for filing or registration, of all financing statements or other similar statements or other registrations, if any, filed in such province or provinces with
respect to the Purchase to ensure recognition as against third parties of the interests of the Trust in the Pool Assets; in each case showing the Seller's address as 1717 Burton Road, Vars, Ontario, K0A 3H0; |
(h) | evidence that such Persons as the Trust may have designated who have registered financing statements or similar instruments against the Seller
shall have entered into such agreements or acknowledgements or amended their registrations, filings or recordings so as to negate any Security Interest or other interest in the Pool Assets capable of encumbering or defeating the interests of the Trust therein; |
(i) | executed copies of this Agreement, the Program Fee Side Letter, the Quebec Assignment and the other agreements and instruments called for hereunder; |
(j) | an opinion of counsel to the Seller (including certain matters under Quebec Law) dated as of the Initial Closing
Date, which opinions may rely on an officer's certificate of the Seller as to certain factual matters; |
(k) | an opinion of counsel to the Performance Guarantor dated as of the Initial Closing Date; |
(l) | Blocked Account Agreements with respect to the Deposit Accounts executed by the banks or other financial institutions at which each of the Deposit Accounts are located shall have been be executed and delivered to the Trust in form satisfactory to the Trust; and |
(m) | such
other documentation as may be required by the Trust or its counsel, Bennett Jones LLP or the Seller or its counsel, Osler Hoskin & Harcourt LLP, acting reasonably. |
3.2 | Conditions Precedent in Favour of the Trust for Purchase/All Increases |
(a) | the
Trust shall have received the Purchase Request or Increase Request duly executed by the Seller; |
(b) | immediately prior to, at the time of and after giving effect to the Purchase or Increase, the following statements will be true, and the Seller, by accepting any payment pursuant to Section 2.2 in respect of the Purchase or any Increase, will be deemed to have certified that: |
(i) | the representations and warranties of the Seller contained in Section 4.1 are correct on and as of the date of purchase as though made on and as
of such date; and |
(ii) | no event has occurred and is continuing, or would result from the effecting of such Purchase or Increase, that constitutes a Trigger Event or would constitute a Trigger Event by further requirement that notice be given or time elapse or both; and |
(c) | all
other documents, instruments, opinions and agreements required by the terms hereof to be delivered to the Trust shall have been so delivered and shall be satisfactory in form and substance to the Trust, acting reasonably, and the Trust shall have received such other approvals, opinions or documents as it may reasonably request. |
4.1 | General Representations and Warranties of the Seller |
(a) | the Seller is a corporation duly incorporated and existing under its jurisdiction of incorporation, the Seller is not a "non-resident" of Canada for the purposes of the Income Tax Act (Canada) and the Seller is duly qualified, licensed or registered in each of the provinces of Canada to carry on its present business and operations, except where the failure to be so qualified, licensed or registered could not reasonably be expected to have a Material Adverse Effect; |
(b) | the
execution, delivery and performance by the Seller of this Agreement and all other instruments, agreements and documents to be delivered by it hereunder, and the transactions contemplated hereby and thereby, are within the Seller's powers, have been duly authorized by all necessary corporate action and do not contravene (i) the Seller's constating documents or by-laws, (ii) any resolution of its board of directors (or any committee thereof) or shareholders or (iii) any law or any contractual restriction binding on or affecting the Seller (including pursuant to any indentures, loan or credit agreements, leases, mortgages or security agreements), the contravention of which could reasonably be expected to have a Material Adverse Effect, and do not result in or require the creation of any Security
Interest (other than any Security Interest created pursuant to this Agreement and the Related Security, the Blocked Account Claims, or Security Interests permitted by this Agreement), upon or with respect to any of its properties, and the consummation of the transactions contemplated hereby does not require approval of shareholders or approval or consent of any Person under any contract to which the Seller is a party; |
(c) | no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required for the due execution, delivery and performance by the Seller of this Agreement or any other instrument,
agreement or document to be delivered hereunder or thereunder except (i) those that have already been given, filed or obtained, as the case may be, and (ii) financing statements filed in favour of the Trust; |
(d) | this Agreement and the other instruments, agreements and documents executed in connection herewith constitute legal, valid and binding obligations of the Seller enforceable against it in accordance
with their terms, subject to (a) applicable bankruptcy, reorganization, winding-up, insolvency, moratorium and other laws of general application limiting the enforcement of creditors' rights; (b) the fact that the granting of equitable remedies such as specific performance and injunction is within the discretion of a court of competent jurisdiction; and (c) general principles of equity; |
(e) | all filings, recordings, registrations or other actions required under this Agreement have been made or taken in Ontario (the parties acknowledge that in Quebec such filings, recordings, registrations or other actions shall be taken immediately following closing), in order to validate, preserve, perfect or protect the interests (including the co-ownership interest)
of the Trust in, and the rights of the Trust to collect, any and all of the Pool Assets, including the right to enforce the Related Security; |
(f) | as of the date hereof, the chief executive office of the Seller is located in Ontario and the books, Records and documents related to the Receivables in which the Seller has an interest and other printed information (excluding policies or certificates of insurance) evidencing or relating to the Pool Assets, the Obligors and the related Financed Vehicles are located at the offices shown in Schedule "B"; |
(g) | the
Records contain all information reasonably necessary for the enforcement and Collection by the Trust of the Pool Assets, including the name, address and phone number of each Obligor, the Principal Balance and any accrued interest and fees on each Pool Receivable, the vehicle identification number of each related Financed Vehicle and the payment history of the Obligor with respect to each Pool Receivable, as such information may change from time to time; |
(h) | each Servicer Report and Portfolio Certificate fully and accurately summarizes the information contained therein and reflects all of the Pool Receivables and the adjusted Principal Balances; |
(i) | there
is no order, judgment or decree of any court, arbitrator or similar tribunal or Governmental Authority purporting to enjoin or restrain, and there are no proceedings before any court, arbitrator or similar tribunal or Governmental Authority seeking to enjoin or restrain the Seller from effecting the Purchase or any Increase hereunder, or the Seller, its agents or the Trust from making any collection in respect thereof, which could reasonably be expected to have a Material Adverse Effect; |
(j) | there are no actions, suits or proceedings in existence or, to the knowledge of the Seller, pending or threatened, against or affecting the Seller or its Affiliates, or the property of the Seller or of any such Affiliates, in any court, or before any |
(k) | the transactions contemplated herein do not require compliance with the Bulk Sales Act (Ontario) or any similar legislation of any other jurisdiction; |
(l) | all documents, computer files, microfiche or other records and materials containing information or disclosure relating to the Seller, the Backup Servicer, the Performance Guarantor, the Obligors, the Financed Vehicles
and the Pool Assets made available to the Trust from time to time will be true and correct in all material respects; |
(m) | the computer records of the Seller which contain particulars of the Pool Assets will contain notations, marks or other designations sufficient to identify that an interest in the Pool Assets has been sold by the Seller to the Trust hereunder; |
(n) | the Records relating to the Pool Assets are current and reflect all material transactions between the Seller and the Obligors under such Pool Assets and any
other Person in respect thereof; |
(o) | each Pool Receivable included as an Eligible Receivable in the calculation of the Net Receivables Pool Balance is an Eligible Receivable as of the date of such calculation; |
(p) | the Credit and Collection Policies in their current form do not contain any amendments or new policies or practices when compared to the historical policies and practices of the Servicer that would have adversely affected the historical collection results that have been furnished to the Trust; |
(q) | since
December 31, 2015, there has been no material adverse change in the business, operations, property or financial condition of the Seller or AFC, the ability of the Seller or AFC to perform its obligations under this Agreement or the other documents delivered or to be delivered by it hereunder or the collectability of the Pool Receivables, or which affects the legality, validity, or enforceability of this Agreement or the other documents delivered or to be delivered by it hereunder; and |
(r) | the Seller is not: (i) a country, territory, organization, person or entity named on an Office of Foreign Asset Control (OFAC) list; (ii) a Person that resides or has a place of business in a country or territory
named on such lists or which is designated as a "Non-Cooperative Jurisdiction" by the Financial Action Task Force on Money Laundering, or whose subscription funds are transferred from or through such a jurisdiction; (iii) a "Foreign Shell Bank" within the meaning of the USA PATRIOT Act, i.e., a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision; or (iv) a person or entity that resides in or is organized under the laws of a jurisdictions designated by the |
4.2 | Survival |
4.3 | Representations and Warranties of the Trust |
(a) | the Trust is validly existing under the laws of the Province of Ontario; |
(b) | the execution, delivery and performance by it of this Agreement and the other documents to be delivered by it hereunder (i) are within its powers and (ii) do not contravene: (A) the documents pursuant to which it was established, (B) in any material respect, any law, rule
or regulation applicable to it, (C) any material contractual restriction binding on or affecting it or its property, or (D) any material order, writ, judgement, award, injunction or decree binding on or affecting it or its property; |
(c) | no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required for the due execution, delivery and performance by it of this Agreement or any other document to be delivered by it hereunder other than those which have been obtained or completed; |
(d) | this
Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms subject to (a) applicable bankruptcy, reorganization, winding-up, insolvency, moratorium and other laws of general application limiting the enforcement of creditors' rights; (b) the fact that the granting of equitable remedies such as specific performance and injunction is within the discretion of a court of competent jurisdiction; and (c) general principles of equity; |
(e) | there is no pending or, to its knowledge, threatened, action or proceeding affecting it or any of its assets before any court, governmental agency or arbitrator which would, if determined adversely, have a material adverse effect on the Seller's rights or interests
hereunder; and |
(f) | it is not a non-resident of Canada within the meaning of the Income Tax Act (Canada). |
4.4 | Survival |
5.1 | Designation of the Servicer |
5.2 | Standard of Care |
5.3 | Authorization of Servicer |
5.4 | Enforcement
of Contracts |
5.5 | Assignment
for Purpose of Enforcement |
5.6 | Deposit of Collections |
5.7 | Description of Services |
(a) | take or cause to be taken all such actions as may be necessary or desirable from time to time to collect the Pool Receivable in accordance with the terms and provisions of the applicable Contract and in accordance with the terms of this Agreement; |
(b) | keep an individual record with respect
to the Pool Receivable and post to it all payments received under or in respect of such Pool Receivable; |
(c) | deposit all Collections in respect of the Pool Receivable to the Deposit Accounts as required by Section 5.6, regardless of any defence, set-off right or counterclaim; |
(d) | give timely notice to the Obligor of the Pool Receivable of any payment or other default thereunder within the Servicer's knowledge; |
(e) | record
the Pool Receivable as being delinquent or defaulted in accordance with the Credit and Collection Policies; |
(f) | investigate all delinquencies and defaults under the Pool Receivable; |
(g) | respond to all reasonable enquiries of the Obligor of the Pool Receivable or other obligors under the Related Security; |
(h) | take
such steps as are reasonably necessary or appropriate to maintain the perfection and priority, as the case may be, of the Security Interests, if any, created pursuant to the Pool Receivable and the Related Security and, subject to Sections 5.7(m) and (n) to refrain from releasing or subordinating any such Security Interest in whole or in part except to the extent that the Servicer would have done so in a similar situation with respect to other Receivables administered by it on its own behalf; |
(i) | make all payments to Governmental Authorities and others where a statutory lien or deemed trust having priority over the Trust's interest in any of the Pool Assets has arisen (provided that nothing herein shall preclude the Servicer from contesting any
claim in the ordinary course of business and in good faith); |
(j) | subject to Sections 5.3 and 5.4, determine the advisability of taking action and instituting and carrying out legal proceedings with respect to the Pool Receivable and the Related Security in case of default by the Obligor under such Pool Receivable and take such action and institute and carry out such legal proceedings determined by it to be advisable; |
(k) | maintain Records with respect to the Pool Receivable and the Related Security and, subject to Section
10.9, grant representatives of the Trust reasonable access to examine and make copies of such Records and a reasonable opportunity to |
(l) | hold
as trust property for and on behalf of the Trust and the Seller, free and clear, as against creditors of the Seller, of all Security Interests and rights of others other than Government and Employee Claims, Operation of Law Claims and those created pursuant to this Agreement, all Records with respect to the Pool Receivable at any one or more of the offices identified in Schedule "B" until the Final Termination Date; |
(m) | execute and deliver all such assignments, releases and discharges of the Pool Receivable and the Related Security as are required by the terms thereof and upon receipt of all amounts due thereunder or as necessary to allow the Servicer to liquidate and sell a Financed Vehicle in accordance with the Credit and Collection
Policies; |
(n) | settle, compromise and otherwise deal with any claims under the Pool Receivable or the Related Security if necessary, advisable or otherwise permitted in accordance with the terms of the related Contract, this Agreement and the Credit and Collection Policies; and |
(o) | maintain a complete list of Excluded Receivables and shall update such list on a timely basis for all changes thereto. |
5.8 | Affirmative
Covenants of the Servicer |
(a) | comply in all respects with all applicable laws, rules, regulations and orders with respect to it, its business and properties, all Pool Assets and the performance of its obligations as Servicer, such compliance to include paying before the same become delinquent all Taxes and Security Interests imposed upon the Servicer or its property in accordance with its normal policies with respect thereto, except to the extent the same are contested in good faith and by appropriate proceedings or where failure to do so could not
reasonably be expected to have a Material Adverse Effect; |
(b) | preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified as an extra-provincial corporation or other out-of-jurisdiction corporation in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualifications could reasonably be expected to have a Material Adverse Effect; |
(c) | hold
as trust property for and on behalf of the Trust and the Seller, at any one or more of the offices designated under the heading "Location of Records" in Schedule "B" (provided that, as may be necessary, originals may be delivered to any law firm acting on behalf of the Servicer in connection with any claims or proceedings connected with a Pool Asset) with respect to each Pool Receivable, until the obligations in respect of such Pool Receivable have been satisfied, the following documents or instruments, which are hereby constructively delivered to the Trust: |
(i) | the original Contracts applicable to the Pool Receivables; |
(ii) | the
original credit application, credit analysis and credit agency report (unless no such report could be obtained in respect of the Obligor) and "credit bureau score" and "custom score" records, if any, relating to the Obligor, all in accordance with the Credit and Collection Policies; |
(iii) | all other documents that the Servicer shall keep on file, in accordance with its customary procedures, evidencing the Related Security; and |
(iv) | any and all other documents that the Servicer shall keep on file, in accordance
with its customary procedures, relating to a Receivable, an Obligor or any Financed Vehicles; |
(d) | comply with the Credit and Collections Policies in regard to the Pool Assets and otherwise, as applicable, in performing its covenants hereunder, except to the extent that non-compliance therewith would not materially adversely affect the Trust's interest in any Pool Assets with respect thereto or the collectability or enforceability thereof, it being agreed for the purposes of this Agreement that the invalidity or loss of priority of any material Security Interest in any Financed Vehicle comprising part of the Related Security related to any Pool Receivable would materially adversely affect the Trust's interest therein; |
(e) | at
its own expense, employ and provide general administrative, supervisory and accounting staff and general overhead as may from time to time be reasonably required to carry out its obligations hereunder and cause its employees to perform their responsibilities in collecting and administering the Pool Assets in the same manner as if the Pool Assets were owned by the Seller, except (i) to the extent necessary or desirable to accommodate the exercise by the Trust of its rights under this Agreement, or (ii) as otherwise required hereby; |
(f) | pay from its own funds all general administrative and out-of-pocket expenses and other costs incurred by it in carrying out its obligations hereunder and all fees and expenses of any administrator appointed or subcontractor
retained by it; |
(g) | cause the computer records of the Seller which contain particulars of the Pool Assets to contain notations, marks or other designations sufficient to identify that an interest in the Pool Assets has been sold by the Seller to the Trust hereunder; |
(h) | maintain
and implement administrative and operating procedures (including an ability to recreate Records in the event of the destruction of the originals of such Records) to keep and maintain, and keep and maintain all Records and other information reasonably necessary or advisable to enable the Servicer to produce the information required to be produced by it pursuant hereto or reasonably necessary or advisable for the enforcement of all of the Pool Receivables and Related Security (including Records adequate to permit the daily identification of all Collections under and adjustments to each Pool Receivable); |
(i) | at any time and from time to time during regular business hours, upon five Business Days' prior notice, subject to Section 10.9, (A) assemble
such of the Records or copies thereof as may reasonably be requested by the Trust and make same available to the Trust at the principal place of business of the Servicer and, if the Records cannot be provided solely at such office, at such other offices of the Servicer or its Affiliates where Records are kept, and permit the Trust, its agents or representatives, to examine and make copies, as reasonably required, of such Records and (B) permit the Trust or its agents to visit the offices and properties of the Seller for the purpose of discussing matters relating to the Pool Assets and the Servicer's performance hereunder with any of the Servicer's officers or employees having knowledge of such matters, provided that the Trust shall act reasonably to minimize any disruption to the Servicer in connection therewith; provided that prior to the occurrence of a Cash Reserve Event or a Trigger Event, the Trust shall not be reimbursed for more than two such examinations in any
year, if a Cash Reserve Event has occurred and is continuing, the Trust shall not be reimbursed for more than four such examinations in any year and, if a Trigger Event has occurred and is continuing, the Trust shall be reimbursed for all such examinations; |
(j) | to the extent the Records consist in whole or in part of computer programs which are licensed by the Servicer, the Servicer will, forthwith upon the occurrence of the first Servicer Termination Event, use its best efforts to arrange for the licence or sublicence of such programs to the Trust for the limited purpose of permitting the Trust or any Replacement Servicer to administer and collect the Pool Assets and to enforce the rights acquired by the Trust in respect of the Related Security; |
(k) | at
its expense, timely and fully perform and comply in all material respects with all material provisions, covenants and other promises required to be observed by the Seller under the Contracts in connection with the Pool Assets; |
(l) | permit the Trust at any reasonable time and from time to time to inspect the data processing systems used by the Servicer to service, administer and collect the Pool Receivables and the Related Security and, in the event that the Seller is not the Servicer, to permit the Servicer to use, through the Seller only (and not directly), any computer or computer related equipment, together with all necessary software, that had been used
by the Seller to service, administer and collect the Pool Receivables and the Related Security immediately prior to the |
(m) | give the Trust not less than 30 days' prior written notice of any change in the
address of its chief place of business and chief executive office, and written notice promptly after any change in the address of an office listed under the heading "Location of Records" in Schedule "B", and each such notice shall be deemed to amend Schedule "B" accordingly; |
(n) | provide to the Trust not less than 30 days' prior notice of any change in the name of the Servicer as stated in its constating documents; |
(o) | co-operate with, and offer such assistance as may reasonably be requested by, the
chartered accountants selected by the Trust to furnish reports in respect of the Trust, the Purchase, any Increases and the servicing of the Pool Assets under this Agreement; |
(p) | upon request of the Trust and with the Servicer's written consent, such consent not to be unreasonably withheld, request the Servicer's auditors to assist the Trust's auditors to the extent and in such manner as is reasonably required for the Trust's auditors to report on the status of the Pool Assets under this Agreement; |
(q) | make or cause to
be made all filings, recordings, registrations and take all other actions in each jurisdiction necessary to validate, preserve, perfect or protect the co-ownership interests of the Trust in the Pool Assets including, the right to enforce the Related Security; and |
(r) | following the occurrence and during the continuation of a Termination Event or a Cash Reserve Event, the Servicer shall provide to the Backup Servicer and the Trust (if requested) on a daily basis an electronic download with respect to the Pool Receivables in form and substance acceptable to the Backup Servicer (and which shall include, but not be limited to, all Records related to each Receivable required by the Backup Servicer to service and collect such Receivable) and a Portfolio
Certificate (including information with respect to all Collections received and all Receivables acquired by the Seller). Following the occurrence and during the continuation of a Cash Reserve Event, the Trust shall have the right to require the Seller or the Servicer to, and upon such request the Seller or the Servicer, as applicable, shall, assemble copies of all of the Contracts and make the same available to the Backup Servicer or other third-party custodian specified by, and at a place selected by, the Trust within 30 days. |
5.9 | Reporting Requirements of the Servicer |
(a) | on each Reporting Date, a Servicer Report relating to the Pool Assets during the related Collection Period and relating to all transactions between the Seller in its |
(b) | on the first Business Day of each week, a Portfolio Certificate relating to the Pool Assets as of the close of business of the Servicer on the last day of the prior week; |
(c) | upon the Trust's reasonable request therefor, a listing by Obligor of all Pool Receivables and current aging report for all Delinquent Receivables; |
(d) | forthwith
after the occurrence of each Servicer Termination Event and each event or the existence of any fact which, with the giving of such notice or lapse of time or both, may constitute a Servicer Termination Event, a statement of a senior financial officer or accounting officer of the Servicer setting forth details as to such Servicer Termination Event or fact or event and the action which the Servicer has taken and is proposing to take with respect thereto; and |
(e) | promptly, from time to time, such other documents, records, information or reports with respect to the Pool Assets or the conditions or operations, financial or otherwise, of the Servicer as the Trust may from time to time reasonably request. |
5.10 | Negative
Covenants of the Servicer |
(a) | except as otherwise provided herein, whether by operation of law or otherwise, purport to sell, assign or otherwise dispose of, or create or suffer to exist any Security Interest upon or with respect to the Seller's or the Trust's interest in the Pool Assets if the effect of such Security Interest would be to cause the related Pool Receivable not to be an Eligible Receivable, or assign any right to receive payment under, or to enforce the Servicer's interest in, any of the Pool Assets, provided that the
Servicer may enter into arrangements with collection agencies, private investigation firms and law firms to directly collect and hold payments of Receivables in trust for the benefit of the Trust and the Seller in accordance with the Credit and Collection Policies; |
(b) | without the prior written consent of the Trust, make any change in the Credit and Collection Policies which could reasonably be expected to have a Material Adverse Effect, or make any change to its credit, collection and administration practices and procedures with respect to Pool Receivables or Receivables which are to become Pool Receivables, provided that prior written consent shall not be required for changes to standard operating procedures (excluding any changes to credit
underwriting criteria), however, the Trust can prevent a change, or require that a change be reversed, by notifying the Servicer that the Trust reasonably believes such a change would have a material adverse impact on the Pool Receivables; |
(c) | after the occurrence and during the continuance of a Trigger Event, extend the maturity or adjust the Principal Balance or otherwise modify the terms of any
Pool Receivable in any material respect, or amend, modify or waive any term or condition of any related Contract in any material respect; |
(d) | release any security, guarantee or insurance securing any indebtedness under any of the Pool Receivables, except to the extent that granting such release is in accordance with this Agreement, the Credit and Collection Policies and the Servicer's usual practices as an obligee or such security or insurance is replaced in a form acceptable to the Trust, acting reasonably; |
(e) | take
any action that adversely affects the perfection, validity or protection of the Trust's rights to collect amounts owing in respect of the Pool Receivables and the proceeds thereof, including the right to enforce the Related Security, except to the extent that the Servicer would have done so in a similar situation with respect to other similar receivables administered by it on its own behalf; |
(f) | enter into any transaction of reorganization, amalgamation or arrangement, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution) or sell, lease or otherwise dispose of its assets as an entirety or substantially as an entirety; except that the Servicer may enter into a transaction of reorganization, amalgamation, or arrangement,
so long as (i) such transaction could not reasonably be expected to have a Material Adverse Effect, (ii) as a condition to the completion of such transaction, the continued or reorganized corporation shall have executed an agreement of assumption to perform every obligation of the Servicer hereunder and under the other agreements, instruments and documents executed and delivered by the Servicer hereunder or otherwise contemplated hereby, (iii) the Backup Servicer shall have provided its written consent and acknowledged its continuing obligations under the Backup Servicer Agreement in respect of the obligations of such continued or reorganized corporation, and (iv) the Performance Guarantor shall have provided its written consent and acknowledged its continuing obligations under this Agreement in respect of the obligations of such continued or reorganized corporation; or |
(g) | resign
as Servicer (provided, for greater certainty, that nothing herein contained shall limit the ability of the Trust to appoint a Replacement Servicer in accordance with the provisions of this Agreement). |
5.11 | Servicer Termination Events |
(a) | the
Servicer fails to make any payment or deposit to be made by it hereunder and such failure continues for two Business Days after the occurrence of such failure; |
(b) | any failure on the part of the Servicer to duly perform or observe any material term, condition, covenant or agreement of the Servicer set forth in this Agreement (other than Section 5.10(f)) or any document executed in connection herewith,
other than such as are specifically referred to in paragraph (a) above, which failure continues unremedied for a period of 30 days after the date on which the Servicer receives written notice thereof from the Trust specifying the default or breach; |
(c) | any representation or warranty made by the Servicer (or any of its officers) in or pursuant to this Agreement, the Purchase Request, any Increase Request, any Servicer Report, any Portfolio Certificate or any document executed in connection herewith or therewith proves to have been false or incorrect in any material respect when made and has not been cured within 30 days after written notice thereof has been received by the Servicer from the Trust; |
(d) | the
taking of possession by an encumbrancer (including a receiver, receiver manager or trustee) of any assets of the Servicer (other than solely to perfect a security interest therein), or the levying or enforcement or a distress or execution or any similar process against any part of the assets of the Servicer that remains unsatisfied for 30 days after the Servicer becoming aware thereof, which materially adversely affects the Servicer's ability to perform its obligations hereunder; |
(e) | the issuance or levying of a writ of execution, attachment or similar process against all or a substantial portion of the property of the Servicer, the Backup Servicer or the Performance Guarantor, in connection with any judgment against the Servicer, the Backup Servicer
or the Performance Guarantor in any amount that materially affects the property of the Servicer, the Backup Servicer or the Performance Guarantor if such writ of execution, attachment or similar process shall not have been stayed or dismissed after 45 days; |
(f) | any failure on the part of the Servicer to duly perform or observe the terms of Section 5.10(f); |
(g) | any of the Servicer, AFC or the Performance Guarantor shall generally not pay its debts as they become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or any proceedings shall be instituted by or against the Servicer or the Performance Guarantor seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief by the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, if such proceeding has been instituted against the Servicer or the Performance Guarantor, as the case may be, either such proceeding has not been stayed or dismissed within 45 days or any of the actions sought in such proceeding (including the entry of an order for relief or the |
(h) | the filing by the Servicer, AFC or the Performance Guarantor of a notice of intention to make a proposal under the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act or any other similar legislation in the applicable jurisdiction, to some or all of its creditors. |
5.12 | Effecting
a Servicer Transfer |
5.13 | Appointment
of Replacement Servicer |
5.14 | Additional Servicer Covenants Following a Servicer Transfer |
(a) | instruct
the Obligor of each Pool Receivable (and any other Persons, if applicable, in the case of the Related Security) to remit all payments due under the Pool Receivables and Related Security to the Replacement Servicer; |
(b) | remit to the Replacement Servicer all payments, if any, received by the predecessor Servicer from Obligors and from other Persons, if applicable, under the Pool Assets; |
(c) | segregate all cash, cheques and other instruments constituting Collections in a manner acceptable to the Trust and, immediately upon
receipt, deposit all such cash, cheques and instruments, duly endorsed or with duly executed instruments of transfer, to an account specified by the Replacement Servicer; |
(d) | cause the computer records of the Seller which contain particulars of the Pool Assets to contain notations, marks or other designations sufficient to identify that an interest in the Pool Assets has been sold by the Seller to the Trust hereunder; |
(e) | deliver
copies or originals of all Records (including computer diskettes or tapes containing all information necessary or reasonably desirable to enable the Trust or its agent to collect the amounts owing under the Pool Receivables and the Related Security, together with a printed copy or microfiche of all such information) to the Trust or as it may direct in writing (or retain the same in segregated storage if so directed), and provide the Trust or its agent with all reasonable assistance necessary to decipher the information contained on the computer diskettes or tapes; and |
(f) | perform any and all acts and execute and deliver any and all documents as may reasonably be requested by the Trust in order to effect the purposes of this Agreement or to enable
the Replacement Servicer to collect and enforce the Pool Receivables and any Related Security and Collections related thereto. |
5.15 | Trust Rights Following a Servicer Transfer |
(a) | perform
the services, duties and functions of the Servicer specified in Article 5 of this Agreement with respect to the Pool Assets as the Trust reasonably deems fit; |
(b) | notify any Obligor of the purchase by the Trust and the sale, transfer and assignment by the Seller of any Pool Assets under this Agreement; |
(c) | contact any Obligor for any reasonable purpose, including for the performance of audits and verification analyses, and the determination of account balances and other data maintained by the predecessor Servicer; |
(d) | direct
any Obligor to make all payments on account of any Pool Receivables or Related Security directly to the Trust at an address designated by the Trust or to such third party (including the Replacement Servicer) or bank or depositary as may be designated by the Trust; |
(e) | request any Obligor to change the instructions for any direct debit or electronic funds transfer otherwise payable to the Seller or the Servicer; and |
(f) | proceed directly against any Obligor and take any and all other actions, in the Seller's name or otherwise,
necessary or reasonably desirable to collect the Pool Receivables, enforce the Related Security or effect any related result. |
5.16 | Power of Attorney; Further Assurances |
(a) | The Seller hereby grants to the Trust an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take in the name of the Seller or
in the name of the Trust, acting reasonably, all steps necessary or advisable to |
(b) | The Trust hereby covenants and agrees that it will not exercise any of the rights conferred by Section 5.16(a) except upon the occurrence of a Trigger Event and then only in respect of the Pool Assets. |
5.17 | Deemed Collections |
(a) | If,
on any day prior to the Final Termination Date, any Pool Receivable is either (i) reduced or cancelled as a result of any breach by the Seller or the Servicer of its obligations hereunder or of the terms of the related Contract; or (ii) reduced or cancelled as a result of a set-off in respect of any claim by the applicable Obligor against the Seller or the Servicer (whether such claim arises out of the same or a related transaction or an unrelated transaction or the loss of or interference with the right of the Obligor to quiet enjoyment of, and continued possession of, the Financed Vehicle), the Servicer or the Seller and the Servicer (on a joint and several basis), so long as the Servicer is the Seller or an Affiliate thereof, as the case may be shall, for all purposes hereof, be irrebuttably deemed to have received a Collection of such Receivable in the amount of such reduction
or cancellation and shall deposit such amount to the Deposit Accounts in accordance with the terms of Section 5.6. |
(b) | If on any day prior to the Final Termination Date any Security Interest, other than a Blocked Account Claim, is validly asserted by any Person (other than the Trust) against any Pool Receivable (as determined by a court of competent jurisdiction or due to the agreement or acquiescence of the Seller or Servicer), and such Security Interest has arisen by or through the action or inaction of the Seller or the Servicer, and, with respect to any Security Interest granted by or arising through an Obligor and asserted against a Financed Vehicle, such Security Interest ranks |
(c) | If on any day prior to the Final Termination Date it is discovered or determined (i) that any Pool Receivable included as an Eligible Receivable in the calculation of the Net Receivables Pool Balance was not an Eligible Receivable on the date of such calculation, or (ii) the Servicer, so long as the Servicer is the Seller or an Affiliate thereof, has extended, amended or otherwise modified a Contract
in contravention of Section 5.10(c), the Seller shall be deemed to have received on such day a Collection of such Pool Receivable in full. |
(d) | If the Seller or Servicer has been deemed, pursuant to Section 5.17(a), (b) or (c) to have received a Collection of any Pool Receivable in full, upon deposit by the Seller or Servicer to the Collection Account of the amount thereof, the Trust will be deemed to have sold to the Seller or Servicer, as the case may be, without further instrument or formality, the related Pool Receivables together with the Related Security in respect thereof free and clear of all Security Interests arising through the Trust but otherwise on an "as is, where is" basis without recourse to, or representation or warranty
of the Trust. |
6.1 | Meaning of Trigger Event |
(a) | the Seller or the Servicer fails to make any payment or deposit to be made by it hereunder and such failure continues for two Business Days after
the occurrence of such failure; |
(b) | any failure on the part of the Seller to duly perform or observe any material term, condition, covenant or agreement of the Seller set forth in this Agreement (other than Section 7.3(c)) or any document executed in connection herewith, other than such as are specifically referred to in paragraph (a) above, which failure continues unremedied for a period of 30 days after the date on which the Seller receives written notice thereof from the Trust specifying the default or breach; |
(c) | a
Servicer Termination Event occurs; |
(d) | any representation or warranty made by the Seller (or any of its officers) in or pursuant to this Agreement, the Purchase Request, any Increase Request, any Servicer Report, any Portfolio Certificate or any document executed in connection herewith or therewith proves to have been false or incorrect in any material respect when made and has not been cured within 30 days after written notice thereof has been received by the Seller from the Trust; |
(e) | the
taking or possession by an encumbrancer (including a receiver, receiver manager or trustee) of any assets of the Seller (other than solely to perfect a security interest therein) or the levying or enforcement or a distress or execution or any similar process against any of the assets of the Seller that remains unsatisfied for 30 days after the Seller becoming aware thereof, which materially adversely affects the Seller's ability to perform its obligations hereunder; |
(f) | the issuance or levying of a writ of execution, attachment or similar process against all or a substantial portion of the property of the Seller, in connection with any judgment against the Seller in any amount that materially affects the property of the Seller if such writ of
execution, attachment or similar process shall not have been stayed or dismissed after 45 days; |
(g) | any failure on the part of the Seller to duly perform or observe the terms of Section 7.3(c); |
(h) | the filing by the Seller of a notice of intention to make a proposal under the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act or any other similar legislation in the applicable jurisdiction, to some or all of
its creditors; |
(i) | the Seller shall generally not pay its debts as they become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceedings shall be instituted by or against the Seller seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief by the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, if such proceeding has been instituted
against the Seller either such proceeding has not been stayed or dismissed within 45 days or any of the actions sought in such proceeding (including the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official) are granted, or the Seller take any corporate action to authorize any of the actions described in this Section 6.1(i); |
(j) | the Seller shall fail to transfer to any Replacement Servicer when required any rights, pursuant to the Agreement, which the Seller then has with respect to the servicing of the Pool Receivables; |
(k) | (i)
a default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any Indebtedness of the Seller, AFC or the Performance Guarantor or (ii) a default shall occur in the performance or observance of any obligation or condition with respect to such Indebtedness if the effect of such default is to accelerate the maturity of any such Indebtedness, and, in the case of either clause (i) or clause (ii), the Indebtedness with respect to which non-payment and/or non-performance shall have occurred and is |
(l) | this Agreement, the Purchase or any Increases shall for any reason (other than pursuant to the terms hereof) cease to create, or shall for any reason cease to be, a valid and enforceable perfected co-ownership interest in each Pool Receivable and the Collections with respect thereto; |
(m) | as of any Settlement Date, the arithmetic average of the Default Ratios
for the most recent [*] shall exceed [*] or the Default Ratio as of any Settlement Date shall exceed [*]; |
(n) | as of any Settlement Date, the arithmetic average of the Delinquency Ratios for the most recent [*] shall exceed [*] or the Delinquency Ratio as of any Settlement Date shall exceed [*]; |
(o) | as of any Settlement Date, the arithmetic average of the Net Spread for the most recent [*] shall be [*]; |
(p) | the
Tangible Net Worth of the Seller shall be less than [*] or the Tangible Net Worth of AFC shall be less than [*] (provided that if GAAP is adjusted such that leases that were previously treated as operating leases are treated as debt, the parties shall negotiate in good faith to adjust this provision to reflect a level which takes into consideration such change); |
(q) | any material adverse change shall occur in the reasonable business judgment of the Trust in the collectability of the Receivables or the business, operations, property or financial condition of the Seller or the Performance Guarantor; |
(r) | this
Agreement shall cease to be in full force and effect with respect to the Performance Guarantor, the Performance Guarantor shall fail to comply with or perform any provision of this Agreement, or the Performance Guarantor (or any Person by, through or on behalf of the Performance Guarantor) shall contest in any manner the validity, binding nature or enforceability of this Agreement with respect to the Performance Guarantor; |
(s) | the sum of all of the Seller's Indebtedness, net of [*], exceeds [*] (provided that if GAAP is adjusted such that leases that were previously treated as operating leases are treated as debt, the parties shall negotiate in good faith to adjust this provision to reflect a level which takes into consideration such change), |
(t) | the
Seller's Indebtedness (excluding guarantees) to equity ratio is greater than [*] (provided that if GAAP is adjusted such that leases that were previously treated as operating leases are treated as debt, the parties shall negotiate in good faith to adjust this provision to reflect a level which takes into consideration such change), |
(u) | the aggregate of the Principal Balances of all Eligible Receivables
shall be less than $30 million; |
(v) | a Blocked Account Agreement in favour of the Trust in place with respect to any Deposit Account shall have terminated other than as a result of any action by the Trust (and not been replaced) or shall be of no force and effect or otherwise unenforceable; |
(w) | AFC shall not hold, directly or indirectly, 100% of the outstanding share capital of the Seller, or the Performance Guarantor shall not hold, directly or indirectly, at least 80% of all of the outstanding share capital of AFC; provided
that, for greater certainty, the pledge as security by the Seller or the Performance Guarantor, as the case may be, of all or any of such shares shall not be a Trigger Event hereunder; |
(x) | the amount on deposit in the Cash Reserve Account shall at any time before the Termination Date fail to equal or exceed the Cash Reserve Required Amount for a period of [*]; |
(y) | (i) any of the Seller or the Servicer shall have asserted that this Agreement or any document executed herewith to which it is a party is not valid and binding
on the parties thereto; or (ii) any court, governmental authority or agency having jurisdiction over any of the parties to any of such documents or any property thereof shall find or rule that any material provisions of any of such documents is not valid and binding on the parties thereto and all appeals therefrom have been decided or the time to appeal has run; |
(z) | the Backup Servicer shall resign or be terminated and no successor Backup Servicer reasonably acceptable to the Trust shall have been appointed pursuant to a replacement Backup Servicing Agreement, within 90 days of such resignation or termination, as applicable; unless on or prior to the first day on which a Backup Servicer is required to be appointed pursuant to this paragraph (z),
the Performance Guarantor's senior unsecured debt shall be rated at least "BBB-" by Standard & Poor's and "Baa3" by Moody's; provided, that a Trigger Event shall be deemed to occur if no Backup Servicer reasonably acceptable to the Trust shall have been appointed within 90 days following any subsequent withdrawal, suspension or downgrade of such senior unsecured debt ratings of the Performance Guarantor below "BBB-" by Standard & Poor's or below "Baa3" by Moody's or, if the applicable rating is "BBB-" by Standard & Poor's or "Baa3" by Moody's, the placement of such ratings on credit watch or similar notation; |
(aa) | the occurrence of a KAR Financial Covenant Termination Event; |
(bb) | the
average Payment Rate for the [*] is less than [*]; |
(cc) | at any time the Trust Share exceeds 100%, and such condition shall continue unremedied for five days after any date, any Servicer Report or Portfolio Certificate is required to be delivered; |
(dd) | as
reported on its consolidated balance sheet, AFC shall fail to maintain (as measured as of the last Business Day of each calendar week) cash and cash equivalents (including, without limitation, any intercompany receivable payable by KAR to AFC upon demand) of at least [*], at least [*] of which must constitute unrestricted cash (i.e., cash that is neither (i) pledged to a third party unrelated to the KAR Credit Facility, nor (ii) in an account in which a third party unrelated to the KAR Credit Facility has a perfected security interest; or |
(ee) | the Termination Date shall have occurred. |
6.2 | Action
Upon Occurrence of a Trigger Event |
6.3 | Optional Repurchase of Pool Receivables |
7.1 | Affirmative Covenants of the Seller |
(a) | comply
in all respects with all applicable laws, rules, regulations and orders with respect to it, its business and properties and all Pool Assets, such compliance to include paying before the same become delinquent all Taxes and Security Interests imposed upon the Seller or its property in accordance with its normal policies with respect thereto, except to the extent the same are contested in good faith and by appropriate proceedings or where failure to do so could not reasonably be expected to have a Material Adverse Effect; |
(b) | preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified as an extra-provincial corporation or other out-of-jurisdiction corporation
in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have a Material Adverse Effect; |
(c) | at any time and from time to time during regular business hours, upon five Business Days' prior written notice, subject to Section 10.9, (A) assemble such of the Records or copies thereof in its possession or control as may reasonably be required by the Trust and make same available to the Trust at the principal place of business of the Seller and, if the Records cannot be provided solely at such office, at such other offices of the Seller or its Affiliates where Records are kept, and permit the Trust, its agents or representatives, to examine and make
copies, as reasonably requested, of such Records and (B) permit the Trust or its agents to visit the offices and properties of the Seller and its Affiliates for the purpose of discussing matters relating to the Pool Assets and the Seller's performance hereunder with any of the Seller's officers or employees having knowledge of such matters, provided that the Trust shall act reasonably to minimize any disruption to the Seller in connection therewith; provided that prior to the occurrence of a Cash Reserve Event or a Trigger Event, the Trust shall not be reimbursed for more than two such examinations in any year, if a Cash Reserve Event has occurred and is continuing, the Trust shall not be reimbursed for more than four such examinations in any year and, if a Trigger Event has occurred and is continuing, the Trust shall be reimbursed for all such examinations; |
(d) | at
its expense, timely and fully perform and comply in all material respects with all material provisions, covenants and other obligations required to be observed, complied with or performed by the Seller under the Contracts relating to the Pool Assets; |
(e) | give the Trust at least 30 days' prior written notice of any change in the address of its chief place of business and chief executive office, and written notice promptly after any change in the address of an office listed under the heading "Location of Records" in Schedule "B", and each such notice shall be deemed to amend Schedule "B" accordingly; |
(f) | provide
to the Trust not less than 30 days' prior notice of any change in the name of the Seller as stated in its constating documents; |
(g) | co-operate with, and offer such assistance as may reasonably be requested by, the chartered accountants selected by the Trust to furnish reports in respect of the Trust, the Purchase and any Increase and the servicing of the Pool Assets under this Agreement; |
(h) | upon
request of the Trust and with the Seller's written consent, such consent not to be unreasonably withheld, request the Seller's auditors to assist the Trust's auditors to the extent and in such manner as is reasonably required for the Trust's auditors to report on the status of the Pool Assets under this Agreement; |
(i) | conduct Lot Checks of each Obligor in accordance with the Seller's customary practices or on such more frequent intervals as may be reasonably requested by the Trust; |
(j) | promptly after becoming aware thereof,
but in any event no later than two Business Days thereafter, provide the Trust with notice of any Servicer Termination Event that is continuing when the Seller becomes aware thereof; and |
(k) | make or cause to be made all filings, recordings, and registrations and take all other actions in each jurisdiction necessary or appropriate to validate, preserve, perfect or protect the co-ownership interests of the Trust in the Pool Assets, including the right to enforce the Related Security. |
7.2 | Reporting Requirements of the Seller |
(a) | within five Business Days after the Seller becomes aware of a material adverse change in the business, operations, properties or condition (financial or otherwise) (other than matters of a general economic nature) of the Seller, the Backup Servicer or the Performance Guarantor, or of an occurrence of a breach of its obligations under this Agreement, notice of such change or occurrence together with a statement by a responsible officer of the Seller specifying the facts, the nature and period of existence of any such breach, condition or event and the action the Seller has taken, is taking
and proposes to take with respect thereto; |
(b) | within five Business Days of the Seller becoming aware thereof, notice of any litigation or other court or arbitration proceeding affecting the Seller which could reasonably be expected to have a Material Adverse Effect; |
(c) | within five Business Days of the Seller becoming aware thereof, notice of any litigation or other court or arbitration proceeding affecting the Backup Servicer or the Performance Guarantor which could reasonably be expected to have a Material Adverse Effect; |
(d) | as
soon as available and in any event within 45 days after the end of each fiscal quarter of the Seller, the unaudited financial statements of the Seller and, as soon |
(e) | as soon as available and in any event within
90 days after the end of the fiscal year of the Performance Guarantor, the audited consolidated balance sheet of the Performance Guarantor and its consolidated subsidiaries as of the end of such year and the related audited consolidated statements of income and of cash flows for such year; reported on by KPMG LLP or other independent certified public accountants of nationally recognized standing; |
(f) | promptly after the sending or filing thereof, copies of all reports which the Seller sent to any holders of securities which it has offered to the public; |
(g) | forthwith
after the occurrence of each Trigger Event and each event or the existence of any fact which, with the giving of notice or lapse of time or both, may constitute a Trigger Event, a statement of a senior financial officer or accounting officer of the Seller setting forth details as to such Trigger Event or fact or event and the action which the Seller has taken and is proposing to take with respect thereto; |
(h) | notice of any material change to the Credit and Collection Policies or change to the standard operating practices or procedures; |
(i) | promptly,
from time to time, such other documents, records, information or reports with respect to the Pool Assets or the conditions or operations, financial or otherwise, of the Seller as the Trust may from time to time reasonably request; and |
(j) | promptly after any changes, the current list of Excluded Receivables. |
7.3 | Negative Covenants of the Seller |
(a) | except as otherwise provided herein, and whether by operation of law or otherwise, purport to sell, assign or otherwise dispose of, or create or suffer to exist any Security Interest upon or with respect to the Seller's or the Trust's interest in the Pool Assets if the effect of such Security Interest would be to cause the related Pool Receivable not to be an Eligible Receivable, or assign any right to receive payment under, or to enforce the Seller's interest in, any of the Pool Assets, provided, that the Seller or Servicer may sell the interest of the Seller and the Trust in Defaulted Receivables including any Contracts
and Related Security with respect thereto and any judgement obtained thereon to any Person who is not an Affiliate of the Seller or Servicer (and does not own 5% or more of any equity interest in the Servicer or any Affiliate thereof and in which the Servicer does not own, directly or indirectly, 5% or more of the equity of such Person) on arm’s-length terms in order to maximize collections thereon; |
(b) | take
any action that adversely affects the perfection, validity or protection of the Trust's rights to collect amounts owing pursuant to the Pool Assets and the proceeds thereof, including the right to enforce the Related Security, except to the extent that the Seller would have done so in a similar situation with respect to other similar receivables administered by it on its own behalf; or |
(c) | enter into any transaction of reorganization, amalgamation or arrangement, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution) or, other than with respect to sales, assignments, leases, licences or transfers of computer hardware and software, or of leases and licences relating thereto or any rights or benefits thereunder, in the
ordinary course of business, sell, lease or otherwise dispose of its assets as an entirety or substantially as an entirety; except that the Seller may enter into a transaction of reorganization, amalgamation, or arrangement, so long as (i) such transaction could not reasonably be expected to have a Material Adverse Effect, (ii) as a condition to the completion of such transaction, the continued or reorganized corporation shall have executed an agreement of assumption to perform every obligation of the Seller hereunder and under the other agreements, instruments and documents executed and delivered by the Seller hereunder or otherwise contemplated hereby, (iii) the Backup Servicer shall have provided its written consent and acknowledged its continuing obligations under the Backup Servicer Agreement in respect of the obligations of such continued or reorganized corporation and (iv) the Performance Guarantor shall have provided its written consent and acknowledged its continuing
obligations under this Agreement in respect of the obligations of such continued or reorganized corporation. |
7.4 | Covenants of the Trust |
(a) | until the Final Termination Date, use commercially reasonably efforts to ensure that the fair value of the Pool Assets held by it will constitute no more than one-half of the total fair value of all assets owned by it; and |
(b) | not
use personal information relating to Obligors received from the Seller other than in connection with the collection, servicing and administration of the Pool Assets and for other reasonable purposes ancillary thereto, all in accordance with and as allowed by applicable law. |
8.1 | Performance Guarantee |
8.2 | Guarantee Unconditional |
(a) | any
extension, modification, amendment or renewal of, or indulgence with respect to, or substitutions for, the Guaranteed Obligations or any part thereof or any agreement relating thereto at any time; |
(b) | any failure or omission to enforce any right, power or remedy with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto, or any collateral securing the Guaranteed Obligations or any part thereof; |
(c) | any waiver of any right, power or remedy or of any default with respect to the Guaranteed
Obligations or any part thereof or any agreement relating thereto or with respect to any collateral securing the Guaranteed Obligations or any part thereof; |
(d) | any release, surrender, compromise, settlement, waiver, subordination or modification, with or without consideration, of any collateral securing the Guaranteed Obligations or any part thereof, any other guarantees with respect to the Guaranteed Obligations or any part thereof, or any other obligation of any person or entity with respect to the Guaranteed Obligations or any part thereof; |
(e) | the
enforceability or validity of the Guaranteed Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to any collateral securing the Guaranteed Obligations or any part thereof; |
(f) | the application of payments received from any source to the payment of indebtedness of the Seller or the Servicer other than the Guaranteed Obligations, any part thereof or amounts which are not covered by this Agreement, even though the Trust might lawfully have elected to apply such payments to any part or all of the Guaranteed Obligations; |
(g) | any
other act, or omission to act, or delay of any kind by any of the Servicer, the Seller, the Trust or any other person or any other circumstance whatsoever, whether similar or dissimilar to the foregoing, which might, but for the provisions of this Section 8.2, constitute a legal or equitable discharge, defense, limitation or |
(h) | the
existence of any claim, set-off or other rights which the Performance Guarantor may have at any time against the Seller, the Servicer or any other Person, including any Obligor, whether in connection with any transactions under this Agreement, any related document or any other transaction, |
8.3 | Recourse
against Servicer |
8.4 | Authorization by the Performance Guarantor |
8.5 | No Subrogation |
8.6 | Stay of Acceleration |
8.7 | Representations and Warranties |
(a) | it is a corporation duly incorporated, validly existing and in good standing
under the laws of Delaware; |
(b) | it has full power and authority to execute and deliver this Agreement and to perform the terms and conditions hereof and is duly qualified, licensed or registered in each relevant jurisdiction to carry on its present business and operations except where the failure to be so qualified, licensed or registered does not and will not materially adversely affect such operations or its ability to perform its obligations hereunder, as applicable; |
(c) | the execution, delivery and performance by the
Performance Guarantor of this Agreement, and the transactions contemplated hereby, are within the powers of the Performance Guarantor, have been duly authorized by all necessary corporate or other action (as applicable) and do not contravene (i) the constating documents or by-laws of the Performance Guarantor, or (ii) any law or any contractual restriction binding on or affecting the Performance Guarantor, the contravention of which could be expected to materially adversely affect the Performance Guarantor's ability to perform its obligations hereunder, does not result in or require the creation of any Security Interest upon or with respect to the Performance Guarantor's properties, and the consummation of the transactions contemplated hereby does not require approval of shareholders or partners or approval or consent of any Person under any contract
to which the Performance Guarantor is a party, except, to the extent such approvals have been granted; |
(d) | no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required for the due execution, delivery and performance by the Performance Guarantor of this Agreement, other than those that have been obtained or made, as the case may be, or any filings required after the date hereof with any securities regulators; |
(e) | this Agreement constitutes a legal,
valid and binding obligation of the Performance Guarantor, enforceable against it in accordance with its terms subject to (i) applicable bankruptcy, reorganization, winding-up, insolvency, moratorium and other laws of general application limiting the enforcement of creditors' rights; (ii) the fact that the granting of equitable remedies such as specific performance and injunction is within the discretion of a court of competent jurisdiction; and (iii) general principles of equity; |
(f) | there
has been no material adverse change in the business of the Performance Guarantor since the date of the most recent audited financial statements of the Performance Guarantor delivered to the Trust; |
(g) | there is no order, judgment or decree of any court, arbitrator or similar tribunal or Governmental Authority purporting to enjoin or restrain, and there are no proceedings before any court, arbitrator or similar tribunal or Governmental Authority which might materially adversely affect the Performance Guarantor's ability to perform its obligations hereunder; and |
(h) | there
are no actions, suits or proceedings in existence or, to the Performance Guarantor's knowledge, pending or threatened, against or affecting it or its property in any court, or before any arbitrator of any kind, or before or by any governmental body, in respect of which there is a reasonable possibility of an adverse determination that could materially adversely affect the Performance Guarantor's financial condition or materially adversely affect the ability of the Performance Guarantor to perform its obligations under this Agreement; and |
(i) | it is not: (i) a country, territory, organization, person or entity named on an Office of Foreign Asset Control (OFAC) list; (ii) a Person that resides or has a place of business in a country or territory
named on such lists or which is designated as a "Non-Cooperative Jurisdiction" by the Financial Action Task Force on Money Laundering, or whose subscription funds are transferred from or through such a jurisdiction; (iii) a "Foreign Shell Bank" within the meaning of the USA PATRIOT Act, i.e., a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision; or (iv) a person or entity that resides in or is organized under the laws of a jurisdictions designated by the United States Secretary of the Treasury under Sections 311 or 312 of the USA PATRIOT Act as warranting special measures due to money laundering concerns. |
8.8 | Payments |
9.1 | Indemnification by the Seller |
(a) | the failure of any information contained in a Servicer Report or a Portfolio Certificate to be true and correct (including the failure of a Pool Receivable included in the calculation of Net Receivables Pool Balance to be an Eligible Receivable as of the date of such calculation), or the failure of any other information provided
to the Trust or the Securitization Agent with respect to Receivables or this Agreement to be true and correct; |
(b) | the failure of any representation or warranty or statement made or deemed made by the Seller (or any of its officers) under or in connection with this Agreement to have been true and correct in all respects when made; |
(c) |
(d) | the failure to vest in the Trust a valid and enforceable perfected first ranking (as against the Seller and creditors of the Seller) co-ownership interest in the Pool Receivables and the Related Security and Collections with respect thereto; |
(e) | the failure to have filed, or any delay in filing, financing statements
or other similar instruments or documents under the PPSA of any applicable jurisdiction or other applicable laws with respect to any Pool Receivables and the Related Security and Collections in respect thereof, whether at the time of the Purchase or any Increase at any subsequent time; |
(f) | any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Pool Receivable (including, |
(g) | any failure of the Seller to perform its duties or obligations in accordance with the provisions hereof or to perform its duties
or obligations under the Contracts; |
(h) | any products liability or other claim, investigation, litigation or proceeding arising out of or in connection with goods, insurance or services that are the subject of or secure any Contract; |
(i) | the commingling of Collections of Pool Assets at any time with other funds; |
(j) | any
investigation, litigation or proceeding related to this Agreement or the use of proceeds of Purchases or in respect of any Pool Receivable, Related Security or Contract; |
(k) | any reduction in the Investment as a result of the payment of allocations of Collections pursuant to Sections 2.7(d), 2.10(e) or 2.13, in the event that all or a portion of such payments shall thereafter be rescinded or otherwise must be returned for any reason; |
(l) | any
tax or governmental fee or charge (other than any tax upon or measured by net income or gross receipts), all interest and penalties thereon or with respect thereto, and all reasonable out-of-pocket costs and expenses, including the reasonable fees and expenses of counsel in defending against the same, which may arise by reason of the purchase or ownership of the Trust's Co-Ownership Interest or other interests in the Receivables Pool or in any Related Security or Contract; |
(m) | the failure by the Seller or the Servicer to pay when due any taxes payable by it, including, without limitation, the franchise taxes and sales, excise or personal property taxes
payable in connection with the Receivables; |
(n) | the failure by the Seller or the Servicer to be duly qualified to do business, to be in good standing or to have filed appropriate registration documents in any jurisdiction; |
(o) | the failure to vest and maintain vested in the Trust a perfected ownership interest in respect of the Trust's Co-Ownership Interest free and clear of any Security Interest created by or through the Seller, whether existing at the time of the consummation of the transactions contemplated hereby or
at any time thereafter, other than Security Interests created by or arising through the Trust; |
(p) | any claim for personal injury, death, property damage or product liability which may arise by reason of, result from or be caused by, or relate to the use, operation, maintenance or ownership of, the Financed Vehicles; and |
(q) | any
material failure of the Seller to perform its duties or obligations, as Servicer or otherwise, in accordance with the provisions of this Agreement. |
9.2 | Notification of Potential Liability |
9.3 | Litigation |
9.4 | Tax
Indemnity |
(a) | the sum payable to the Trust shall be increased as may be necessary (or an amount shall be owed to the Trust) so that, after all required deductions, withholdings or payments in respect of such Taxes have been made, the Trust receives or retains an amount equal to the sum that the Trust would have received or retained had no such deductions, withholdings or payments been made; |
(b) | the Seller shall make such deductions or withholdings;
and |
(c) | the Seller shall pay forthwith the full amount deducted or withheld to the relevant taxation authority or other authority in accordance with applicable law and will provide to the Trust copies of such forms as are required to be provided to such authority evidencing the payment by the Seller. |
9.5 | Tax Credit |
10.1 | Liability of the Trust and the Securitization Agent |
10.2 | Delegation in Favour of Securitization Agent |
10.3 | Change in Circumstances |
(a) | the
introduction of, or any change in, or in the interpretation, administration application or implementation of, any applicable law or regulation by any court or Governmental Authority, in each case, adopted, issued, taking effect or occurring after the later of: (i) the date hereof; and (ii) the most recent date on which the Termination Date is extended in accordance with the terms of this Agreement; or |
(b) | the compliance by any of the Trust, the Securitization Agent, BMONB and/or any liquidity provider or credit enhancement provider to the Trust, or any of their Affiliates (each, an "Affected Person"), with any changed or introduced guideline, direction or request, or any change in the interpretation
or administration thereof made after the later of: (i) the date hereof; and (ii) the most recent date on which the Termination Date is extended in accordance with the terms of this Agreement, from or by any Governmental Authority or professional self-regulating or governing body (including, for greater certainty, the Office of the Superintendent of Financial Institutions Canada, the Board of Governors of |
(i) | (A) increasing the costs, expenses or liabilities of, or imposes, modifies or deems applicable any reserve, assessment, fee, tax, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, in each case any Affected Person (including as a result of a change in the Affected Person's capital position), as such costs, expenses or liabilities relate to the Trust making, funding or maintaining the Investment hereunder, provided that in the case of BMONB or any of its
Affiliates, such increased costs, liabilities or expenses shall be limited to those that are directly attributable to increases in regulatory capital of BMONB or such Affiliates, (B) reducing the rate of return (on capital or otherwise) to any Affected Person in connection with, or as a result of the Affected Person either having to raise additional capital or incurring a deteriorated capital position as a result of the Trust making, funding or maintaining the Investment hereunder, (C) requiring the payment of any Taxes on or calculated with reference to the capital or debt of any Affected Person or (D) requiring any Affected Person to make any payment it would not otherwise be required to make; or |
(ii) | reducing the amount received or receivable
by the Trust under this Agreement or in respect of any Pool Receivable, and provided that any such introductions or changes enumerated in clauses (a) and (b) above are of application across any applicable industry in which such Affected Person participates and are not limited in their application to one or more Affected Persons, |
10.4 | Amendments,
Waivers, Etc. |
10.5 | Notices, Etc. |
10.6 | No Waiver; Remedies |
10.7 | Binding Effect; Assignability |
10.8 | Costs and Expenses |
10.9 | Confidentiality |
10.10 | Effect of Agreement |
10.11 | Agreement
Non-Exclusive |
10.12 | No Set-off |
10.13 | Termination |
10.14 | Discharge of Certain Registrations
in the Province of Quebec |
10.15 | Execution in
Counterparts |
10.16 | Amendment and Restatement |
AUTOMOTIVE FINANCE CANADA INC. | |
Per: | /s/ Amy Wirges |
Name
Amy Wirges Title Vice President of Finance and Treasurer | |
Address: 1717 Burton Road Vars, ON K0A 3H0 | |
Attention: Vice President of Legal Telecopier No.: 613-443-3436 | |
With
a copy to: Automotive Finance Corporation 13085 Hamilton Crossing Blvd. Suite 300 | |
Attention: Vice President of Legal Telecopier No.: 866-929-3430 | |
And
to: Automotive Finance Corporation 13085 Hamilton Crossing Blvd. Suite 300 | |
Attention: Amy Wirges Telecopier No.: 317-360-3766 |
KAR AUCTION SERVICES, INC. | |
Per: | /s/
Rebecca C. Polak |
Name Rebecca C. Polak Title Executive Vice President, General Counsel and Secretary | |
Address: 13085 Hamilton Crossing Blvd. USA | |
Attention: Becca
C. Polak Executive Vice President and General Counsel and Secretary Telecopier No.: 317-249-4518 |
BNY TRUST COMPANY OF CANADA, in its capacity as trustee of PRECISION TRUST, by its Securitization Agent, BMO NESBITT BURNS INC. | |
Per: | /s/
John Vidinovski |
Name John Vidinovski Title Managing Director | |
Per: | /s/ Chris Romano |
Name Chris
Romano Title Managing Director | |
c/o BMO Nesbitt Burns Inc. 3rd Floor Podium 1 First Canadian Place Toronto, Ontario M5X 1H3 | |
Attention: Managing Director Securitization Telecopier
No.: 416-359-1910 |
TO: | PRECISION TRUST c/o BMO NESBITT BURNS INC. 3rd Floor Podium 1 First Canadian Place Toronto, Ontario M5X 1H3 Telecopier No.: (416) 359-1910 |
(i) | the representations and warranties of the Seller contained
in Section 4.1 of the Receivables Purchase Agreement are correct on and as of the date of the Purchase as though made on and as of such date; |
(ii) | no event has occurred and is continuing, or would result from the effecting of such Purchase, that constitutes a Trigger Event or would constitute a Trigger Event by further requirement that notice be given or time elapse or both; |
(iii) | the attached Portfolio Certificate (Schedule "D") fully and accurately reflects the Pool Receivables and adjusted Principal Balances;
and |
Date of Purchase: | |
Cash Payment: | |
Cash Deposit Amount [*]: | |
Net Cash Payment: | |
Transferred to [*]: | |
AUTOMOTIVE FINANCE CANADA INC. | |
Per: | |
[Name] [Title] | |
Per: | |
[Name] [Title] |
Calgary – Branch 54 |
ADESA Calgary |
1621 Veterans Boulevard NE Airdrie, AB T4A 2G6 |
Edmonton – Branch 129 |
ADESA Edmonton |
1701 9th Street |
Nisku, AB T9E 8M8 |
Halifax
– Branch 61 |
ADESA Halifax |
300 Sky Boulevard |
Enfield, NS B2T1K3 |
Kitchener – Branch 53 |
218 Boida Ave. Unit #2, RR #1 |
Ayr, ON N0B1E0 |
Montreal – Branch 21 |
ADESA
Montreal |
300 Albert Mondou |
St. Eustache, PQ J7R7A7 |
Ottawa – Branch 14 |
ADESA Ottawa |
1717 Burton Rd |
Vars, ON K0A3H0 |
Toronto – Branch 56 |
ADESA
Toronto |
55 Auction Lane |
Brampton, ON L6T 5P4 |
Toronto – Branch 182 Toronto Impact Office 535 Wentworth Street
S.W. Oshawa, ON L1J 6G5 |
Vancouver – Branch 49 |
ADESA Vancouver |
7111 No. 8 Road |
Richmond, BC V6W 1L9 |
Winnipeg – Branch 113 |
ADESA Winnipeg |
Box 19, Group 242, RR # 2 |
Winnipeg,
MB R3C 2E6 |
Saskatoon – Branch 155 |
ADESA Saskatoon |
618 – 48th Street East |
Saskatoon, Saskatchewan S7K 6K4 |
Carmel Office |
Automotive Finance Canada Inc. |
c/o Automotive Finance Corporation |
13085
Hamilton Crossing Blvd., Suite 300 |
Automotive Finance Canada Inc. | ||||||||||||
Servicer
Report | Dated: | |||||||||||
All amounts in Canadian Dollars | # of Days in Month: | |||||||||||
Fourth
Amended and Restated Receivables Purchase Agreement dated as of December 20, 2016 between Automotive Finance Canada Inc., as Seller and Servicer, KAR Auction Services, Inc., as Performance Guarantor, and Precision Trust (the "Agreement"). | ||||||||||||
Part
I | Representations & Warranties | |||||||||||
The
Servicer certifies that (i) the information provided in this Servicer Report is true and complete, (ii) no Trigger Events, including no Servicer Termination Events, have occurred, (iii) the Representations and Warranties are true and correct, and (iv) the Servicer has satisfied all of its obligations under the Agreement in all material respects, in each case as of the date hereof. In addition, the Servicer confirms that no subservicing arrangements exist. | ||||||||||||
Automotive
Finance Canada Inc. | ||||||||||||
By: | Date: | |||||||||||
Name:
Dwayne Price | ||||||||||||
Title: Assistant Treasurer | ||||||||||||
Part
II | Program Limit, Investment Amount, and Trust's Share as of: | |||||||||||
Program
Limit (Termination Date: January 31, 2020) | 125,000,000 | |||||||||||
1) | Aggregate Investment (Precision Trust) | |||||||||||
2) | Unfulfilled
Increases pending in connection with Deferred Increase Date | |||||||||||
3) | Paydown Date reduction (cash in account paid next day) | |||||||||||
4) | Adjusted Investment (1 + 2 - 3) | |||||||||||
5) | Loss
Reserve | |||||||||||
6) | Net Receivables Pool Balance |
Trust's
Share = [(4+5 /6)] | ||||||||||||
Part III | Receivables Rollforward and Aging Information | |||||||||||
See
details as of calendar month end in Section I below. | ||||||||||||
Part
IV | Net Receivables Pool Balance | |||||||||||
See
details as of calendar month end in Section II below. | ||||||||||||
Part
V | Reserves (see Section III for minimum reserves) | % | ||||||||||
A. | Loss
Reserve | Available overcollateralization | ||||||||||
Minimum level | [*] | |||||||||||
B. | Cash
Reserve | Available Cash Reserve | [*] | |||||||||
Minimum level (min % * Investment) | [*] | |||||||||||
C. | Supplement
Yield Reserve Amount | % of Investment | [*] | |||||||||
Part
VI | Trigger Events (see Section IV) | Actual | Trigger Level | |||||||||
A. | [*] | |||||||||||
B. | Eligible
Receivables < CAD 30 million | 30,000,000 | ||||||||||
C. | [*] | [*] | ||||||||||
D. | [*] | [*] | ||||||||||
E. | [*] | [*] | ||||||||||
F. | [*] | [*] | ||||||||||
G. | Net
Spread test [*] | [*] | ||||||||||
H. | [*] | [*] | ||||||||||
Part
VII | Financial Triggers & Covenants (see Section V) | Actual | Trigger Level | |||||||||
A. | Bankruptcy | |||||||||||
B. | Material
Adverse Change | |||||||||||
C. | Change in Control (AFC < 100% of Seller; KAR < 80% of AFC) | |||||||||||
D. | Cash
Reserve < Cash Reserve Required Amount | |||||||||||
E. | KAR Financial Covenant violation | |||||||||||
F. | Default
/ cross acceleration of corporate Indebtedness (Seller or AFC > $1MM; KAR > $35MM) | |||||||||||
G. | AFC consolidated cash equivalents are at least [*] (incl. [*] unrestricted cash) | |||||||||||
H. | Seller's
Indebtedness limitation [*] | [*] | ||||||||||
I. | Tangible Net Worth test (AFC) | [*] | ||||||||||
J. | Tangible
Net Worth test (AFCI) | [*] | ||||||||||
K. | Leverage ratio (Indebtedness / equity); AFCI | [*] | ||||||||||
Part
VIII | Reporting Requirements | Timing | ||||||||||
A. | Reporting
period | [*] | ||||||||||
B. | Reporting dates | [*] | ||||||||||
C. | Unaudited
quarterly financial statements - Seller & Servicer | [*] | ||||||||||
D. | Unaudited annual F/S - Seller & Servicer; audited consolidating KAR F/S | [*] | ||||||||||
E. | KAR
compliance certificate | [*] | ||||||||||
F. | Material Changes to Servicer Report | [*] | ||||||||||
G. | List
of subservicers with contact information | [*] | ||||||||||
H. | Changes to Excluded Receivables | [*] | ||||||||||
Section
I - Receivables Rollforward and Aging Information | ||||||||||||
A. | Receivables
Rollforward | Current Month | ||||||||||
1) | Beginning Principal Balance | |||||||||||
2) | Receivables
Floorplanned | |||||||||||
3) | Principal Receipts | |||||||||||
4) | Write-Offs | |||||||||||
5) | A/R
Converted to Notes | |||||||||||
Ending Principal Balance (1 + 2 - 3 - 4 - 5) | ||||||||||||
B. | Finance
Charge Collections | |||||||||||
1) | Interest | |||||||||||
2) | Floorplan
Fee | |||||||||||
3) | Other Fees | |||||||||||
Finance
Charge Collections (1 + 2 + 3) | ||||||||||||
C. | Write-Offs
| Current Month | ||||||||||
Total Write-Offs | ||||||||||||
Write-Offs
[*] | ||||||||||||
Total Converted to Notes | ||||||||||||
Converted
to Notes [*] | ||||||||||||
D. | Receivables
Aging Report | |||||||||||
1) | Current | |||||||||||
2) | [*]
days past due | |||||||||||
3) | [*] days past due | |||||||||||
4) | [*]
days past due | |||||||||||
5) | [*] days past due | |||||||||||
6) | [*]
days past due | |||||||||||
Total Receivables (1 + 2 + 3 + 4 + 5 + 6) | ||||||||||||
Average
maturity (ref purposes only) |
Difference | ||||||||||||
E. | Payment
Rate / Implied Turnover | |||||||||||
1) | [*] | |||||||||||
2) | [*] | |||||||||||
[*] | ||||||||||||
F. | Delinquent
Receivables | |||||||||||
Receivables [*] days past due | Specified Ineligible Receivables | |||||||||||
-
Assets that are not eligible for the Net Receivables Pool Balance. | ||||||||||||
G. | Defaulted Receivables | - These items are not included in the rollforward and are not aged. | ||||||||||
Receivables [*] days past due | - These items are however sold to and are assets of the Trust. | |||||||||||
H. | Obligor
Information | Affiliated Obligors | ||||||||||
Number of active dealers | Dismantlers | |||||||||||
Average
dealer size / average dealer concentration | ||||||||||||
Section
II - Net Receivables Pool Balance | ||||||||||||
Net Receivables Pool Balance Calculation | In calculating NRPB, there should be no duplication of amounts previously reduced from a different category. | |||||||||||
A. | Total
Pool Receivables | (A) | ||||||||||
B. | Specified
Ineligible Receivables | (B) | ||||||||||
C. | Total
Pool Receivables excluding Specified Ineligible Receivables | (A) - (B) | (C) | |||||||||
D. | Accounts
Payable (Title Status "T" from "Title Absent Exclusions Report") | (D) | ||||||||||
E. | Total
Pool Receivables excluding Specified Ineligible Receivables and Title Status "T" | (C) - (D) | (E) | |||||||||
F. | ineligible
Receivables | |||||||||||
Non-Canadian residents, governmental, or other ineligible obligors | f1 | |||||||||||
Delinquent
Receivables | f2 | |||||||||||
Defaulted Receivables | f3 | |||||||||||
Obligors
with [*] Defaulted Receivables | f4 | |||||||||||
Short-pays | f5 | |||||||||||
NSF | f6 | |||||||||||
Ineligible
contract terms | f7 | |||||||||||
Over [*] outstanding | f8 | |||||||||||
Rental
[*] months on books | f9 | |||||||||||
Other ineligible vehicle types | f19 | |||||||||||
Sold
out-of-trust | f11 | |||||||||||
Obligors subject to bankruptcy or insolvency proceedings | f12 | |||||||||||
Rental
Receivables ([*]) | f13 | |||||||||||
Rental Receivables ([*]) | f14 | |||||||||||
Term
[*] payoff | f15 | |||||||||||
Total ineligible Receivables | (sum f) | (F) | ||||||||||
G. | Eligible
Receivables | (E) - (F) | (G) | |||||||||
H. | Normal
Concentration Percentage | |||||||||||
Obligor Name | Amount | Also, has Rental? Y/N | Concentration limit | Normal Concentration Percentage | Excess concentrations | |||||||
Retail
Obligors | ||||||||||||
[*] * (G) | h1 | |||||||||||
[*]
* (G) | h2 | |||||||||||
[*] * (G) | h3 | |||||||||||
[*]
* (G) | h4 | |||||||||||
[*] * (G) | h5 | |||||||||||
[*]
* (G) | h6 | |||||||||||
[*] * (G) | h7 | |||||||||||
Rental
Obligors | ||||||||||||
[*] * (G) | h8 | |||||||||||
[*]
* (G) | h9 | |||||||||||
[*] * (G) | h10 | (sum h) | ||||||||||
[*]
* (G) | h11 | (H) | ||||||||||
[*] * (G) | h12 | Reduction
to NRPB | ||||||||||
I. | Special Concentration Percentage - Special Obligors | |||||||||||
Obligor
Name | Amount | Also, has Rental? Y/N | Concentration Limit | Special Concentration Percentage | Excess concentrations | |||||||
Retail Obligors | ||||||||||||
[*]
* (G) | i1 | |||||||||||
[*] * (G) | i2 | |||||||||||
[*]
* (G) | i3 | |||||||||||
[*] * (G) | i4 | |||||||||||
[*]
* (G) | i5 | |||||||||||
[*] * (G) | i6 | |||||||||||
[*]
* (G) | i7 | |||||||||||
Rental Obligors | ||||||||||||
[*]
* (G) | i8 | |||||||||||
[*] * (G) | i9 | |||||||||||
[*]
* (G) | i10 | (sum i) | ||||||||||
[*] * (G) | i11 | (I) | ||||||||||
[*]
* (G) | i12 | Reduction to NRPB | ||||||||||
J. | All
Obligors exceeding [*] Normal Concentration Percentage (aggregate concentration limit [*]) | |||||||||||
Obligor Name | Amount | Concentration Limit | Normal Concentration Percentage | Value of Receivables included for Obligors exceeding [*] | ||||||||
[*]
* (G) | j1 (limited to 3%) | |||||||||||
[*] * (G) | j2 (limited to 2%) | |||||||||||
[*]
* (G) | j3 (limited to 2%) | |||||||||||
[*] * (G) | j4 (limited to 2%) | |||||||||||
[*]
* (G) | j5 (limited to 2%) | |||||||||||
[*] * (G) | j6 (limited to 2%) | |||||||||||
[*]
* (G) | j7 (limited to 2%) | |||||||||||
[*] * (G) | j8 (limited to 2%) | |||||||||||
[*]
* (G) | j9 (limited to 2%) | |||||||||||
[*] * (G) | j10 (limited to 2%) | |||||||||||
Total
of Special Obligors exceeding [*] | (i) | (sum j) | ||||||||||
[*] Special Concentration Percentage x (G) | (ii) | |||||||||||
Excess
concentration | if (i) > (ii), then (ii) - (i) | (J) | ||||||||||
Reduction
to NRPB | ||||||||||||
K. | Special
Concentration Percentage - Specialty Vehicles | |||||||||||
Total
Motorcycles (including all-terrain vehicles) | (i) | |||||||||||
All-Terrain Vehicles | (ii) | |||||||||||
All-Terrain
Vehicles advance limit | (iii) | [*] | ||||||||||
All-Terrain Vehicles discounted amount | (ii) x (iii) | (iv) | ||||||||||
Total
Motorcycles discounted amount | (i) - (ii) + (iv) | (x) | ||||||||||
Discounted amount | (ii) *([*]-(iii)) | k1 | ||||||||||
Salvage
Vehicles | (v) | |||||||||||
Advance Limit | (vi) | [*] | ||||||||||
Salvage
Vehicles discounted amount | (v) x (vi) | (y) | ||||||||||
Discounted amount | (v)
*([*]-(vi)) | k2 | ||||||||||
Marine
Crafts | (vii) | |||||||||||
Advance Limit | (viii) | [*] | ||||||||||
Marine
Crafts discounted amount | (vii) x (viii) | (z) | ||||||||||
Discounted amount | (vii)
*([*]-(viii)) | k3 | ||||||||||
Specialty
Vehicle Type | Amount | Concentration limit | Special Concentration Percentage | Excess concentrations | ||||||||
[*] | l1 | [*]
* (G) | 0 | k4 | ||||||||
[*] | l2 | [*] * (G) | 0 | k5 | ||||||||
[*] | l3 | [*]
* (G) | 0 | k6 | ||||||||
[*] | l4 | [*] * (G) | 0 | k7 | ||||||||
[*] | l5 | [*]
* (G) | 0 | k8 | ||||||||
[*] | l6 | [*] * (G) | 0 | k9 | ||||||||
[*] | l7 | [*]
* (G) | 0 | k10 | ||||||||
Excess concentration | (sum k) | (K) |
Reduction
to NRPB | ||||||||||||
L. | [*] Specialty Vehicle Aggregate
Special Concentration Percentage | |||||||||||
Total Specialty Vehicles | (i) | sum (l1 - l7) | ||||||||||
Excess
concentration | (ii) | from (k4 - k10) | ||||||||||
Total Specialty Vehicles, net of excess concentration | (i) - (ii) | (iii) | ||||||||||
[*]
Special Concentration Percentage x (G) | (iv) | |||||||||||
Excess concentration | if (iii) > (iv), then (iv) - (iii) | (L) | ||||||||||
Reduction
to NRPB | ||||||||||||
M. | Special
Concentration Percentage - Rental Receivables | |||||||||||
Total
Rental Receivables | (i) | |||||||||||
Obligor Rental Receivables excess concentrations | (ii) | |||||||||||
Total
Rental Receivables, net of Obligor excess concentrations | (iii) | (i) - (ii) | ||||||||||
[*] Special Concentration Percentage * (G) | (iv) | |||||||||||
Excess
concentration | if (iii) > (iv), then (iii) - (iv) | (M) | ||||||||||
Reduction
to NRPB | ||||||||||||
N. | Special Concentration Percentage
- Minimum Curtailment Payment | |||||||||||
Receivables
(excluding Rental) w/ curtailment pymt [*], but [*] | (i) | |||||||||||
[*] Special Concentration Percentage x (G) | (ii) | |||||||||||
Excess
concentration | if (i) > (ii), then (i) - (ii) | (N) | ||||||||||
Reduction
to NRPB | ||||||||||||
O. | Special
Concentration Percentage - Auction Credit | |||||||||||
Total
Auction Credits | (i) | |||||||||||
[*] Special Concentration Percentage x (G) | (ii) | |||||||||||
Excess
concentration | if (i) > (ii), then (i) - (ii) | (O) | ||||||||||
Reduction
to NRPB | ||||||||||||
P. | Special Concentration Percentage
- Term [*] | |||||||||||
Total
Receivables outstanding [*] | (i) | |||||||||||
[*] Special Concentration Percentage x (G) | (ii) | |||||||||||
Excess
concentration | if (i) > (ii), then (i) - (ii) | (P) | ||||||||||
Reduction
to NRPB | ||||||||||||
Q. | Total of discounts and excess
concentrations | (Sum H through P) | (Q) | |||||||||
Net
Receivables Pool Balance | (G) + (Q) | |||||||||||
SECTION
III - Minimum Reserves | ||||||||||||
A. | Loss
Reserve Calculation | Total | [*] Delinquency Ratio | |||||||||
1) | [*] | Dec-16 | [*] | |||||||||
2) | [*] | Nov-16 | [*] | |||||||||
3) | [*] | Oct-16 | [*] | |||||||||
Loss
Reserve ((1 - 2) * 3) | Sep-16 | [*] | ||||||||||
Aug-16 | [*] | |||||||||||
Loss
Percentage Calculation | Jul-16 | [*] | ||||||||||
4) | [*] | Jun-16 | [*] | |||||||||
5) | [*] | May-16 | [*] | |||||||||
6) | [*]
(see below) | Apr-16 | [*] | |||||||||
7) | Minimum Loss Percentage | Mar-16 | [*] | |||||||||
Loss
Percentage ([*]) | [*] | Feb-16 | [*] | |||||||||
Jan-16 | [*] | |||||||||||
Default
Ratio Component | ||||||||||||
8) | [*] | [*]
Avg Default Ratio | ||||||||||
9) | [*] | Dec-16 | [*] | |||||||||
10) | [*] | Nov-16 | [*] | |||||||||
11) | [*] | Oct-16 | [*] | |||||||||
Default
Ratio Component ((10 / 11) * 9) | [*] | Sep-16 | [*] | |||||||||
Aug-16 | [*] | |||||||||||
B. | Cash
Reserve Event (Determination) | Jul-16 | [*] | |||||||||
Adjusted Net Spread [*] | Jun-16 | [*] | ||||||||||
Adjusted
Net Spread [*] | May-16 | [*] | ||||||||||
[*] | I. | Apr-16 | [*] | |||||||||
[*] | [*] | Mar-16 | [*] | |||||||||
Feb-16 | [*] | |||||||||||
Jan-16 | [*] |
Delinquency
Ratio, current month | II. | |||||||||||
[*] | [*] | |||||||||||
[*]
avg Payment Rate | III. | |||||||||||
Minimum Payment Rate | [*] | |||||||||||
[*] | ||||||||||||
Cash
Reserve Event? | [*] | [*] | ||||||||||
C. | Cash
Reserve Required Amount | |||||||||||
Calculation date of most recent Cash Reserve Event ([*]) | (fill in the date manually or "N/A") | |||||||||||
Has
the Cash Reserve Event been cured for [*]? | ||||||||||||
Cash Reserve Event trigger applicable (occurred and not cured for [*]) ? | ||||||||||||
1) | Application
percentage | |||||||||||
2) | Aggregate Investment | |||||||||||
3) | Required
amount based on Investment and performance [*] | |||||||||||
4) | Supplement Yield Reserve Amount | |||||||||||
Cash
Reserve Required Amount [*] | ||||||||||||
Actual Cash Reserve balance | ||||||||||||
D. | Collection
Account Balance (RPA section 2.5 and 2.6 payments) | Total | ||||||||||
1) | Collection Account balance | |||||||||||
2) | Replacement
Servicer Fee | |||||||||||
3) | Collection costs | |||||||||||
4) | Backup
Servicing Fees | |||||||||||
5) | Transition Expenses | |||||||||||
6) | Funding
Discount | |||||||||||
7) | Standby Fees | |||||||||||
8) | Paydown
Date reduction (cash in account paid next day) | |||||||||||
9) | Required payment to Cash Reserve Account [contingent] | |||||||||||
10) | Required
amounts owed to Indemnified Parties [contingent] | |||||||||||
11) | Total RPA section 2.5 and 2.6 payments (2 thru 10) | |||||||||||
Excess
cash / (deficit) (1 - 11) | ||||||||||||
SECTION
IV - Trigger Events | ||||||||||||
XVI. | Trigger
Events - Month End Only | |||||||||||
A. | Participation Test | For Reference: calculation of numerator | ||||||||||
1) | Investment | ADD | ||||||||||
2) | Unfulfilled
Increase | [*] days | ||||||||||
3) | Loss Reserve | Total write-offs | ||||||||||
4) | Paydown Date reduction (cash in account paid next day) | Total
conv to notes | ||||||||||
5) | Trust's Share (1 + 2 + 3 - 4) | DEDUCT | ||||||||||
6) | Net Receivable Pool Balance | Write-offs [*] | ||||||||||
Trust's
Share % (5 / 6) | Conv to notes [*] | |||||||||||
Trust's Share % limit | Total Defaulted | |||||||||||
B. | Default
Ratio Test | |||||||||||
1) | Receivables [*] days past due + write-offs [*] past due | |||||||||||
+
A/R conv to notes [*] past due | ||||||||||||
2) | Receivables floorplanned [*] prior (cash disbur.) | |||||||||||
Default
Ratio (1 / 2) | ||||||||||||
Maximum [*] Default Ratio | [*] | |||||||||||
[*]
avg Default Ratio | ||||||||||||
Maximum [*] avg Default Ratio | [*] | |||||||||||
C. | Delinquency
Ratio Test | |||||||||||
1) | Total Delinquent Receivables | |||||||||||
2) | Outstanding
Balance of Pool Receivables | |||||||||||
Delinquency Ratio (1 / 2) | ||||||||||||
Maximum
[*] Delinquency Ratio | [*] | |||||||||||
[*]
avg Delinquency Ratio | ||||||||||||
Maximum [*] avg Delinquency Ratio | [*] | |||||||||||
D. | Net
Spread Test | |||||||||||
1) | Finance
Charge Collections | |||||||||||
2) | Funding Discount expensed during month | |||||||||||
3) | Standby
Fee (unused fee) | |||||||||||
4) | Replacement Servicer Fee (if $0 there should be a Notional Servicer Fee) | |||||||||||
5) | Notional
Servicer Fee [*] | |||||||||||
6) | Backup Servicing Fees | |||||||||||
7) | Transition
Expenses (if any) | |||||||||||
8) | Other Fees > $100 | |||||||||||
9) | Defaults
as defined for the Default Ratio test | |||||||||||
10) | Subtotal - carry costs and losses (2 thru 9) | |||||||||||
11) | Recoveries | |||||||||||
12) | Collections
on Defaulted Receivables | |||||||||||
13) | Subtotal: excess Finance Charge Collections (1 - 10 + 11 + 12) | |||||||||||
14) | Average
aggregate balance Pool Receivables | |||||||||||
Net Spread (before allocation of Supplemental Yield) ([*]) | ||||||||||||
15) | Adjusted
Net Spread Amount (allocation of Supplemental Yield) | |||||||||||
16) | Subtotal: excess Finance Charge Collections + allocation (13 + 15) | |||||||||||
17) | Average
aggregate balance Pool Receivables | |||||||||||
18) | Net Spread ([*]) | |||||||||||
Minimum
[*] Net Spread | [*] | |||||||||||
Compliance ([*] > [*]) | ||||||||||||
E. | Payment
Rate | |||||||||||
1) | Collections of principal on all Pool Receivables (excl. Collections of principal on Spec. Ineligible Receivables) | |||||||||||
2) | Beginning
aggregate O/S Balance of Pool Receivables (excl. Collections of principal on Spec. Ineligible Receivables) | |||||||||||
3) | Payment Rate (1 / 2) | |||||||||||
4) | [*]
Payment Rate | |||||||||||
5) | Minimum [*] Payment Rate | [*] | ||||||||||
Compliance
(4 > 5) | ||||||||||||
F. | Minimum
Eligible Receivables | |||||||||||
1) | Eligible Receivables | |||||||||||
2) | Minimum
Eligible Receivables | 30,000,000 | ||||||||||
Compliance (1 > 2) | ||||||||||||
G. | Minimum
Cash Reserve | |||||||||||
1) | Amount on deposit in Cash Reserve | |||||||||||
2) | Minimum
Cash Reserve amount | [*] | ||||||||||
Compliance (1 > 2) | ||||||||||||
SECTION
V - Financial Triggers & Covenants | ||||||||||||
A. | Tangible
Net Worth Test | |||||||||||
1 | AFC | |||||||||||
1) | AFC's
Shareholder's Equity | |||||||||||
2) | AFC's Intangible Assets | |||||||||||
3) | Tangible
Net Worth (1 - 2) | |||||||||||
4) | Minimum Tangible Net Worth | [*] | ||||||||||
Compliance
(3 > 4) | ||||||||||||
2
| Seller - AFCI | |||||||||||
1) | AFCI Shareholder's Equity | |||||||||||
2) | AFCI's
Intangible Assets | |||||||||||
3) | Tangible Net Worth (1 - 2) | |||||||||||
4) | Minimum
Tangible Net Worth | [*] | ||||||||||
Compliance (3 > 4) | ||||||||||||
B. | Seller's
Indebtedness (including Investment) | |||||||||||
1) | Maximum Indebtedness ([*]) | |||||||||||
2) | All
Indebtedness ([*]) | |||||||||||
Compliance (1 > 2) | ||||||||||||
C. | Seller's
Indebtedness (including Investment) / Equity | |||||||||||
1) | Maximum Indebtedness / equity | [*] | ||||||||||
2) | AFCI
Indebtedness / equity | |||||||||||
Compliance (1 > 2) | ||||||||||||
D. | Seller
Liquidity | |||||||||||
1) | AFC cash and cash equivalents | |||||||||||
2) | Minimum
cash and equivalents | [*] | ||||||||||
3) | AFC unrestricted cash | |||||||||||
4) | Minimum
unrestricted cash | [*] | ||||||||||
Compliance (1 > 2 & 3 > 4) | ||||||||||||
N/A | ||||||||||||
In
Compliance | Yes | |||||||||||
Violation | No |
To: | Precision Trust | ||||||
Reference
is made to the Fourth Amended and Restated Receivables Purchase Agreement, dated as of December 20, 2016, (herein, as amended or otherwise modified from time to time, called the "Receivables Purchase Agreement"), among Automotive Finance Canada Inc. (the "Seller"), KAR Auction Services, Inc. (the "Performance Guarantor"), and BNY Trust Company of Canada, in its capacity as trustee of Precision Trust (in such capacity "The Trust"). Capitalized terms used but not otherwise defined herein are used as defined in the Receivables Purchase Agreement. | |||||||
Date | |||||||
The
Seller hereby certifies and warrants to you that the following is a true and correct computation as of: | |||||||
current Investment | |||||||
[*] | |||||||
plus, with
respect to a request for an increase of the Purchasers' Investments, the amount of such increase. | |||||||
Investment after funding activity | 1A | ||||||
Current
balance of unfufilled purchases subject to a Deferred Purchase Date | 1B | ||||||
Loss Reserve [*] | 1C | ||||||
TOTAL
(1) | |||||||
Net Receivables Pool Balance | |||||||
Total
of all Receivables in the Receivables Pool (A) [Note: these letters correspond to the Servicer Report.] | |||||||
Reduction for: Specified Ineligible Receivables (B) | |||||||
Reduction
for: Title Attached Receivables (D) | |||||||
Reduction for: ineligible Receivables (F) | |||||||
Reduction
for: [*] | |||||||
Reduction for: Special Concentration limit - [*] | |||||||
Reduction
for: Special Concentration limit - [*] | |||||||
Reduction for: Special Concentration limit - [*] | |||||||
Reduction
for: Special Concentration limit - [*] | |||||||
Reduction for: Special Concentraion limi - [*] | |||||||
Net
Receivables Pool Balance | TOTAL (2) | ||||||
Carry
Costs referenced in the RPA Section 2.6 have been set aside | |||||||
Aggregate
Participation TEST: | (1) / (2) | ||||||
Is Aggregate Participation less than or equal to [*]? | |||||||
Cash
Reserve [*] | |||||||
Is Level One Trigger applicable? | |||||||
[*] | times
the Investment in 1A | ||||||
Supplemental Yield Reserve Amount | |||||||
Cash
Reserve Required Amount | 3A | ||||||
Cash Reserve Account Balance | 3B | ||||||
Cash
Reserve TEST: (3B must be greater than or equal to 3A) | |||||||
IN WITNESS WHEREOF, the SELLER has caused this Portfolio Certificate to be executed and delivered by the Servicer. In addition, as of the date of this Portfolio Certificate, AFCI is in compliance with
all Representations & Warranties and Covenants. Also, no Termination Events have occurred under the Receivables Purchase Agreement. | |||||||
Automotive
Finance Corporation, as Servicer | |||||||
By: _________________________________ | |||||||
Name: | |||||||
Title: |
Account Name | Account Type | Account Number |
[*] | [*] | [*] |
[*] | [*] | [*] |
[*] | [*] | [*] |
[*] | [*] | [*] |
[*] | [*] | [*] |
[*] | [*] | [*] |
[*] | [*] | [*] |
[*] | [*] | [*] |
[*] | [*] | [*] |
[*] | [*] | [*] |
[*] | [*] | [*] |
[*] | [*] | [*] |
TO: | PRECISION TRUST c/o BMO NESBITT BURNS INC. 3rd Floor Podium 1 First Canadian Place Toronto, Ontario M5X 1H3 Telecopier No.: (416) 359-1910 |
(i) | the representations and warranties of the Seller contained
in Section 4.1 of the Receivables Purchase Agreement are correct on and as of the date of purchase as though made on and as of such date; and |
(ii) | no event has occurred and is continuing, or would result from the effecting of such Purchase, that constitutes a Trigger Event or would constitute a Trigger Event by further requirement that notice be given or time elapse or both; and |
(iii) | the attached weekly Portfolio Certificate fully and accurately reflects the Pool Receivables and adjusted Principal Balances. |
Remittance
Date: | |
Current aggregate Investment: | |
Increase to Investment (Cash Payment) (at least Cdn$500,000, increments of Cdn$100,000): | |
Cash Reserve Required Amount [*]: | |
Current Cash Reserve Account balance: | |
Cash
Deposit Amount (if req'd) Transferred to Precision Trust Cash Reserve Account [*]: Net Cash Payment: | |
Transferred to Seller's Account No. [*]: |
AUTOMOTIVE
FINANCE CANADA INC. | |
Per: | |
[Name] [Title] | |
Per: | |
[Name] [Title] |
(a) | the Obligor
of such Receivable is located in the Province of Québec; or |
(b) | such Receivable is payable to an address or an account in the Province of Québec; |
AUTOMOTIVE FINANCE CANADA INC./FINANCEMENT D’AUTOMOBILES CANADA INC. | |||
By: | |||
Name: | |||
Title: | |||
By: | |||
Name: | |||
Title: |
BNY
TRUST COMPANY OF CANADA, solely in its capacity as trustee of PRECISION TRUST, by its Securitization Agent, BMO NESBITT BURNS INC. | |||
By: | |||
Name: | |||
Title: | |||
By: | |||
Name: | |||
Title: |
Net Receivables Pool Balance Calculation | In calculating NRPB, there should be no duplication of amounts previously reduced from a different category. | ||||||||
A. | Total
Pool Receivables | (A) | |||||||
B. | Specified
Ineligible Receivables | (B) | |||||||
C. | Total Pool Receivables
excluding Specified Ineligible Receivables | (A) - (B) | (C) | ||||||
D. | Accounts
Payable (Title Status "T" from "Title Absent Exclusions Report") | (D) | |||||||
E. | Total
Pool Receivables excluding Specified Ineligible Receivables and Title Status "T" | (C) - (D) | (E) | ||||||
F. | ineligible
Receivables | ||||||||
Non-Canadian residents, governmental, or other ineligible obligors | f1 | ||||||||
Delinquent Receivables | f2 | ||||||||
Defaulted
Receivables | f3 | ||||||||
Obligors with [*] Defaulted Receivables | f4 | ||||||||
Short-pays | f5 | ||||||||
NSF | f6 | ||||||||
Ineligible
contract terms | f7 | ||||||||
Over [*] outstanding | f8 | ||||||||
Rental [*] on books | f9 | ||||||||
Other
ineligible vehicle types | f19 | ||||||||
Sold out-of-trust | f11 | ||||||||
Obligors subject to bankruptcy or insolvency proceedings | f12 | ||||||||
Rental
Receivables ([*]) | f13 | ||||||||
Rental Receivables ([*]) | f14 | ||||||||
Term [*] payoff | f15 | ||||||||
Total
ineligible Receivables | (sum f) | (F) | |||||||
G. | Eligible
Receivables | (E) - (F) | (G) | ||||||
H. | Normal
Concentration Percentage | ||||||||
Obligor Name | Amount | Also, has Rental? Y/N | Concentration limit | Normal Concentration Percentage | Excess concentrations | ||||
Retail Obligors | |||||||||
[*]
* (G) | h1 | ||||||||
[*] * (G) | h2 | ||||||||
[*]
* (G) | h3 | ||||||||
[*] * (G) | h4 | ||||||||
[*]
* (G) | h5 | ||||||||
[*] * (G) | h6 | ||||||||
[*]
* (G) | h7 | ||||||||
Rental Obligors | |||||||||
[*]
* (G) | h8 | ||||||||
[*] * (G) | h9 | ||||||||
[*]
* (G) | h10 | (sum h) | |||||||
[*] * (G) | h11 | (H) | |||||||
[*]
* (G) | h12 | Reduction to NRPB | |||||||
I. | Special
Concentration Percentage - Special Obligors | ||||||||
Obligor Name | Amount | Also, has Rental? Y/N | Concentration Limit | Special Concentration Percentage | Excess concentrations | ||||
Retail Obligors | |||||||||
[*]
* (G) | i1 | ||||||||
[*] * (G) | i2 | ||||||||
[*]
* (G) | i3 | ||||||||
[*] * (G) | i4 | ||||||||
[*]
* (G) | i5 | ||||||||
[*] * (G) | i6 | ||||||||
[*]
* (G) | i7 | ||||||||
Rental Obligors | |||||||||
[*]
* (G) | i8 | ||||||||
[*] * (G) | i9 | ||||||||
[*]
* (G) | i10 | (sum i) | |||||||
[*] * (G) | i11 | (I) | |||||||
[*]
* (G) | i12 | Reduction to NRPB | |||||||
J. | All
Obligors exceeding [*] Normal Concentration Percentage (aggregate concentration limit [*]) | ||||||||
Obligor Name | Amount | Concentration Limit | Normal Concentration Percentage | Value of Receivables included for Obligors exceeding [*] | |||||
[*]
* (G) | j1 (limited to 3%) | ||||||||
[*] * (G) | j2 (limited to 2%) | ||||||||
[*]
* (G) | j3 (limited to 2%) | ||||||||
[*] * (G) | j4 (limited to 2%) | ||||||||
[*]
* (G) | j5 (limited to 2%) | ||||||||
[*] * (G) | j6 (limited to 2%) | ||||||||
[*]
* (G) | j7 (limited to 2%) | ||||||||
[*] * (G) | j8 (limited to 2%) | ||||||||
[*]
* (G) | j9 (limited to 2%) | ||||||||
[*] * (G) | j10 (limited to 2%) | ||||||||
Total
of Special Obligors exceeding [*] | (i) | (sum j) | |||||||
[*] Special Concentration Percentage x (G) | (ii) | ||||||||
Excess
concentration | if (i) > (ii), then (ii) - (i) | (J) | |||||||
Reduction to NRPB | |||||||||
K. | Special
Concentration Percentage - Specialty Vehicles | ||||||||
Total Motorcycles (including all-terrain vehicles) | (i) | ||||||||
All-Terrain
Vehicles | (ii) | ||||||||
All-Terrain Vehicles advance limit | (iii) | [*] | |||||||
All-Terrain
Vehicles discounted amount | (ii) x (iii) | (iv) | |||||||
Total Motorcycles discounted amount | (i) - (ii) + (iv) | (x) | |||||||
Discounted
amount | (ii) *([*]-(iii)) | k1 | |||||||
Salvage Vehicles | (v) | ||||||||
Advance
Limit | (vi) | [*] | |||||||
Salvage Vehicles discounted amount | (v) x (vi) | (y) | |||||||
Discounted
amount | (v) *([*]-(vi)) | k2 | |||||||
Marine
Crafts | (vii) | ||||||||
Advance Limit | (viii) | [*] | |||||||
Marine
Crafts discounted amount | (vii) x (viii) | (z) | |||||||
Discounted amount | (vii) *([*]-(viii)) | k3 | |||||||
Specialty
Vehicle Type | Amount | Concentration limit | Special Concentration Percentage | Excess concentrations | |||||
[*] | l1 | [*]
* (G) | k4 | ||||||
[*] | l2 | [*] * (G) | k5 | ||||||
[*] | l3 | [*]
* (G) | k6 | ||||||
[*] | l4 | [*] * (G) | k7 | ||||||
[*] | l5 | [*]
* (G) | k8 | ||||||
[*] | l6 | [*] * (G) | k9 | ||||||
[*] | l7 | [*]
* (G) | k10 | ||||||
Excess concentration | (sum k) | (K) | |||||||
Reduction
to NRPB |
L. | [*]
Specialty Vehicle Aggregate Special Concentration Percentage | ||||||||
Total Specialty Vehicles | (i) | sum (l1 - l7) | |||||||
Excess
concentration | (ii) | from (k4 - k10) | |||||||
Total Specialty Vehicles, net of excess concentration | (i) - (ii) | (iii) | |||||||
[*]
Special Concentration Percentage x (G) | (iv) | ||||||||
Excess concentration | if (iii) > (iv), then (iv) - (iii) | (L) | |||||||
Reduction
to NRPB | |||||||||
M. | Special
Concentration Percentage - Rental Receivables | ||||||||
Total Rental Receivables | (i) | ||||||||
Obligor
Rental Receivables excess concentrations | (ii) | ||||||||
Total Rental Receivables, net of Obligor excess concentrations | (iii) | (i) - (ii) | |||||||
[*]
Special Concentration Percentage * (G) | (iv) | ||||||||
Excess concentration | if (iii) > (iv), then (iii) - (iv) | (M) | |||||||
Reduction
to NRPB | |||||||||
N. | Special Concentration Percentage - Minimum Curtailment Payment | ||||||||
Receivables
(excluding Rental) w/ curtailment pymt [*], but [*] | (i) | ||||||||
[*] Special Concentration Percentage x (G) | (ii) | ||||||||
Excess
concentration | if (i) > (ii), then (i) - (ii) | (N) | |||||||
Reduction
to NRPB | |||||||||
O. | Special
Concentration Percentage - Auction Credit | ||||||||
Total Auction Credits | (i) | ||||||||
[*]
Special Concentration Percentage x (G) | (ii) | ||||||||
Excess concentration | if (i) > (ii), then (i) - (ii) | (O) | |||||||
Reduction
to NRPB | |||||||||
P. | Special Concentration Percentage - Term [*] | ||||||||
Total
Receivables outstanding [*] | (i) | ||||||||
[*] Special Concentration Percentage x (G) | (ii) | ||||||||
Excess
concentration | if (i) > (ii), then (i) - (ii) | (P) | |||||||
Reduction
to NRPB | |||||||||
Q. | Total of discounts and excess concentrations | (Sum
H through P) | (Q) | ||||||
Net
Receivables Pool Balance | (G) + (Q) |
This ‘10-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
1/31/20 | ||||
Filed as of: | 2/24/17 | 4 | ||
Filed on: | 2/23/17 | 4 | ||
For Period end: | 12/31/16 | |||
12/20/16 | 4, 8-K | |||
3/9/16 | 4, 8-K | |||
12/31/15 | 10-K, 4 | |||
6/16/15 | 4 | |||
3/11/14 | 4, 8-K, CT ORDER | |||
5/24/11 | 8-K | |||
10/20/10 | ||||
2/28/10 | ||||
2/15/10 | ||||
2/9/10 | ||||
2/8/10 | 8-K | |||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/21/24 OPENLANE, Inc. 10-K 12/31/23 112:14M 11/02/23 OPENLANE, Inc. 10-Q 9/30/23 68:7.4M 8/03/23 OPENLANE, Inc. 10-Q 6/30/23 66:7.3M 5/03/23 OPENLANE, Inc. 10-Q 3/31/23 60:6.8M 3/22/23 OPENLANE, Inc. 10-Q/A 9/30/22 62:7.2M 3/22/23 OPENLANE, Inc. 10-Q/A 6/30/22 61:7M 3/22/23 OPENLANE, Inc. 10-Q/A 3/31/22 61:6.1M 3/09/23 OPENLANE, Inc. 10-K 12/31/22 111:15M 11/02/22 OPENLANE, Inc. 10-Q 9/30/22 62:9.3M 8/03/22 OPENLANE, Inc. 10-Q 6/30/22 58:7.4M 5/04/22 OPENLANE, Inc. 10-Q 3/31/22 59:6.4M 2/23/22 OPENLANE, Inc. 10-K 12/31/21 110:15M 11/03/21 OPENLANE, Inc. 10-Q 9/30/21 57:6.9M 8/04/21 OPENLANE, Inc. 10-Q 6/30/21 55:6.8M 5/05/21 OPENLANE, Inc. 10-Q 3/31/21 57:5.6M 2/18/21 OPENLANE, Inc. 10-K 12/31/20 105:14M 11/04/20 OPENLANE, Inc. 10-Q 9/30/20 68:9.7M 8/05/20 OPENLANE, Inc. 10-Q 6/30/20 67:8.8M |