Servicing Agreement (2017)Full Document 

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SERVICING AGREEMENT

AMONG

ALLY BANK

ALLY AUTO ASSETS LLC

AND

ALLY AUTO RECEIVABLES TRUST 2017-2

DATED AS OF MARCH 29, 2017


TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS

1

ARTICLE II ADMINISTRATION AND SERVICING OF RECEIVABLES

1

SECTION 2.01

Duties of the Servicer

1

SECTION 2.02

Collection of Receivable Payments

2

SECTION 2.03

Realization Upon Liquidating Receivables

3

SECTION 2.04

Maintenance of Insurance Policies

4

SECTION 2.05

Maintenance of Security Interests in Vehicles

4

SECTION 2.06

Servicer Covenants Regarding Receivables

4

SECTION 2.07

Purchase of Receivables Upon Breach of Covenant

4

SECTION 2.08

Basic Servicing Fee; Payment of Certain Expenses by Servicer

5

SECTION 2.09

Servicer’s Accounting

5

SECTION 2.10

Application of Collections

5

SECTION 2.11

Servicer Enforcement of Seller Obligations to Repurchase Receivables Upon Breach of Warranty

6

ARTICLE III REPRESENTATIONS AND WARRANTIES

6

SECTION 3.01

Representations and Warranties of the Servicer

6

SECTION 3.02

Representations and Warranties of the Depositor

7

SECTION 3.03

Merger and Consolidation of the Depositor

8

ARTICLE IV SERVICER’S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS

9

SECTION 4.01

Annual Statement as to Compliance; Notice of Servicer Default

9

SECTION 4.02

Annual Report of Assessment of Compliance with Servicing Criteria

10

SECTION 4.03

Access to Certain Documentation and Information Regarding the Receivables

10

SECTION 4.04

Amendments to Schedule of Receivables

10

SECTION 4.05

Assignment of Administrative Receivables and Warranty Receivables

10

SECTION 4.06

Distributions

11

SECTION 4.07

Reserve Account

14

SECTION 4.08

Net Deposits

14

SECTION 4.09

Statements to Securityholders

15

SECTION 4.10

Compliance with the FDIC Rule

17

ARTICLE V CERTIFICATEHOLDER AND NOTEHOLDER STATEMENTS AND ACCOUNTS; COLLECTIONS, DEPOSITS AND INVESTMENTS

17

SECTION 5.01

Establishment of Accounts

17

SECTION 5.02

Collections

21

SECTION 5.03

Investment Earnings and Supplemental Servicing Fees

21

SECTION 5.04

Additional Deposits

21

ARTICLE VI LIABILITIES OF SERVICER AND OTHERS

22

SECTION 6.01

Liability of Servicer; Indemnities

22

SECTION 6.02

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

23

SECTION 6.03

Limitation on Liability of Servicer and Others

23

SECTION 6.04

Delegation of Duties

24

SECTION 6.05

Servicer Not to Resign

24

i


ARTICLE VII DEFAULT

24

SECTION 7.01

Servicer Defaults

24

SECTION 7.02

Consequences of a Servicer Default

25

SECTION 7.03

Indenture Trustee to Act; Appointment of Successor

26

SECTION 7.04

Notification to Noteholders and Certificateholders

26

SECTION 7.05

Waiver of Past Defaults

26

ARTICLE VIII TERMINATION

27

SECTION 8.01

Optional Purchase of All Receivables; Insolvency of the Depositor; Termination of Trust

27

ARTICLE IX CUSTODIAN

29

SECTION 9.01

Custody of Receivable Files

29

ARTICLE X MISCELLANEOUS PROVISIONS

30

SECTION 10.01

Amendment

30

SECTION 10.02

Protection of Title to Trust

32

SECTION 10.03

Survival

33

SECTION 10.04

Notices

33

SECTION 10.05

Governing Law

33

SECTION 10.06

Waivers

33

SECTION 10.07

Headings

33

SECTION 10.08

Counterparts

34

SECTION 10.09

Severability of Provisions

34

SECTION 10.10

Third-Party Beneficiaries

34

SECTION 10.11

Assignment

34

SECTION 10.12

No Petition Covenants

34

SECTION 10.13

Tax Treatment

34

SECTION 10.14

Furnishing Documents

34

SECTION 10.15

Information to Be Provided by the Indenture Trustee

35

SECTION 10.16

Limitation of Liability of Indenture Trustee and Owner Trustee

36

SCHEDULE A

Schedule of Receivables

APPENDIX A

Definitions and Rules of Construction

APPENDIX B

Notice Addresses and Procedure

ii


THIS SERVICING AGREEMENT, dated as of March 29, 2017, is among ALLY BANK, a Utah chartered bank ("Ally Bank" which, in its capacity as servicer under this Agreement, is referred to as the "Servicer"), ALLY AUTO ASSETS LLC, a Delaware limited liability company (the "Depositor"), and ALLY AUTO RECEIVABLES TRUST 2017-2, a Delaware statutory trust (the "Issuing Entity").

WHEREAS, Ally Bank, as seller (the "Seller"), has sold a portfolio of automobile and light truck retail instalment sale contracts, direct purchase money loans and related rights to Depositor pursuant to the Pooling Agreement;

WHEREAS, the Issuing Entity acquires its interest in such contracts and related rights and issues the Securities pursuant to the Further Transfer Agreements; and

WHEREAS, the Servicer desires to perform the servicing obligations set forth herein for the benefit of the Depositor, the Issuing Entity and each other Interested Party with respect to such contracts, and the proceeds thereof, as the interests of such parties may appear from time to time for and in consideration of the fees and other benefits set forth in this Agreement.

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

ARTICLE I

DEFINITIONS

Certain capitalized terms used in this Agreement are defined in and shall have the respective meanings assigned to them in Part I of Appendix A to this Agreement. All references herein to "the Agreement" or "this Agreement" are to this Servicing Agreement as it may be amended, supplemented or modified from time to time, and all references herein to Articles and Sections are to Articles or Sections of this Agreement unless otherwise specified. The rules of construction set forth in Part II of such Appendix A shall be applicable to this Agreement.

ARTICLE II

ADMINISTRATION AND SERVICING OF RECEIVABLES

SECTION 2.01 Duties of the Servicer.

(a) The Servicer is hereby appointed and authorized to act as agent for the Owner of the Receivables and in such capacity shall manage, service, administer and process collections on the Receivables with reasonable care, using that degree of skill and attention that the Servicer exercises with respect to comparable motor vehicle related receivables that it services for itself or others. The Servicer hereby accepts such appointment and authorization and agrees to perform the duties of Servicer with respect to the Receivables set forth herein.

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