Exhibit 4.1
FORM OF POOLING AND SERVICING AGREEMENT
USAA ACCEPTANCE, LLC
as Depositor
USAA FEDERAL SAVINGS BANK
as Seller and Servicer
and
[_______________________________]
as Trustee
Dated as of [______________________________]
[ ]
[___]% Asset Backed Certificates, Class [A]
[___]% Asset Backed Certificates, Class [B]
TABLE OF CONTENTS
Page
_____
ARTICLE I.
Definitions
Section 1.01 Definitions.........................................................................................1
Section 1.02 Other Definitional Provisions......................................................................14
ARTICLE II.
Establishment of Trust
Section 2.01 Creation of Trust..................................................................................14
Section 2.02 Acceptance by Trustee..............................................................................14
Section 2.03 Conveyance of Receivables..........................................................................15
ARTICLE III.
The Receivables
Section 3.01 Representations and Warranties of the Seller.......................................................15
Section 3.02 Representations and Warranties of the Depositor....................................................16
Section 3.03 Repurchase Upon Breach.............................................................................16
Section 3.04 Custody of Receivable Files........................................................................17
Section 3.05 Duties of Servicer as Custodian....................................................................17
Section 3.06 Instructions; Authority to Act.....................................................................18
Section 3.07 Custodian's Indemnification........................................................................18
Section 3.08 Effective Period and Termination...................................................................18
ARTICLE IV.
Administration and Servicing of Receivables
Section 4.01 Duties of Servicer.................................................................................19
Section 4.02 Collection and Allocation of Receivable Payments...................................................19
Section 4.03 Realization Upon Receivables.......................................................................20
Section 4.04 Physical Damage Insurance..........................................................................20
Section 4.05 Maintenance of Security Interests in Financed Assets...............................................20
Section 4.06 Covenants of Servicer..............................................................................20
Section 4.07 Purchase of Receivables Upon Breach................................................................20
Section 4.08 Servicing Fee......................................................................................21
Section 4.09 Servicer's Certificate.............................................................................21
Section 4.10 Annual Statement as to Compliance; Notice of Default...............................................21
Section 4.11 Annual Independent Certified Public Accountant's Report............................................21
Section 4.12 Access to Certain Documentation and Information Regarding Receivables..............................22
Section 4.13 Servicer Expenses..................................................................................22
Section 4.14 Appointment of Subservicer.........................................................................22
ARTICLE V.
Distributions; Reserve Account; Statements to Certificateholders
Section 5.01 Establishment of Trust Accounts....................................................................23
Section 5.02 Collections........................................................................................24
Section 5.03 Application of Collections.........................................................................24
Section 5.04 Advances...........................................................................................25
Section 5.05 Additional Deposits................................................................................25
Section 5.06 Distributions......................................................................................26
Section 5.07 Reserve Account....................................................................................28
Section 5.08 Statements to Certificateholders...................................................................31
Section 5.09 Tax Returns........................................................................................32
Section 5.10 Net Deposits.......................................................................................33
ARTICLE VI.
The Certificates
Section 6.01 The Certificates...................................................................................33
Section 6.02 Authentication of Certificates.....................................................................33
Section 6.03 Registration of Transfer and Exchange of Certificates..............................................33
Section 6.04 Mutilated, Destroyed, Lost or Stolen Certificates..................................................34
Section 6.05 Persons Deemed Owners..............................................................................34
Section 6.06 Access to List of Certificateholders' Names and Addresses..........................................34
Section 6.07 Maintenance of Office or Agency....................................................................35
Section 6.08 Book-Entry Certificates............................................................................35
Section 6.09 Notices to Clearing Agency.........................................................................36
Section 6.10 Definitive Certificates............................................................................36
ARTICLE VII.
The Depositor
Section 7.01 Representations of Depositor.......................................................................36
Section 7.02 Corporate Existence................................................................................38
Section 7.03 Liabilities of Depositor; Indemnities..............................................................38
Section 7.04 Merger or Consolidation of, or Assumption of the Obligations of, Depositor.........................38
Section 7.05 Limitation on Liability of Depositor and Others....................................................39
Section 7.06 Depositor May Own Certificates.....................................................................39
Section 7.07 No Transfer of Excess Amounts......................................................................39
ARTICLE VIII.
The Servicer
Section 8.01 Representations of Servicer........................................................................40
Section 8.02 Indemnities of Servicer............................................................................41
Section 8.03 Merger or Consolidation of, or Assumption of the Obligations of, Servicer..........................41
Section 8.04 Limitation on Liability of Servicer and Others.....................................................42
ARTICLE IX.
Default
Section 9.01 Events of Default..................................................................................42
Section 9.02 Appointment of Successor...........................................................................43
Section 9.03 Repayment of Advances..............................................................................44
Section 9.04 Notification to Certificateholders.................................................................44
Section 9.05 Waiver of Past Defaults............................................................................44
ARTICLE X.
The Trustee
Section 10.01 Duties of Trustee.................................................................................44
Section 10.02 Certain Matters Affecting Trustee.................................................................45
Section 10.03 Trustee Not Liable for Certificates or Receivables................................................46
Section 10.04 Trustee May Own Certificates......................................................................47
Section 10.05 Trustee's Fees and Expenses.......................................................................47
Section 10.06 Eligibility Requirements for Trustee..............................................................47
Section 10.07 Resignation or Removal of Trustee.................................................................47
Section 10.08 Successor Trustee.................................................................................48
Section 10.09 Merger or Consolidation of Trustee................................................................48
Section 10.10 Appointment of Co-Trustee or Separate Trustee.....................................................48
Section 10.11 Representations and Warranties of Trustee.........................................................50
Section 10.12 No Bankruptcy Petition............................................................................50
Section 10.13 Trustee's Certificate.............................................................................50
Section 10.14 Trustee's Assignment of Repurchased Receivables...................................................50
ARTICLE XI.
Termination
Section 11.01 Termination of the Trust..........................................................................51
Section 11.02 Optional Purchase of All Receivables..............................................................51
ARTICLE XII.
Miscellaneous Provisions
Section 12.01 Amendment.........................................................................................52
Section 12.02 Protection of Title to Trust......................................................................53
Section 12.03 Separate Counterparts.............................................................................54
Section 12.04 Limitation on Rights of Certificateholders........................................................54
Section 12.05 Governing Law.....................................................................................55
Section 12.06 Notices...........................................................................................55
Section 12.07 Severability of Provisions........................................................................55
Section 12.08 Assignment........................................................................................55
Section 12.09 Certificates Nonassessable and Fully Paid.........................................................55
Section 12.10 Limitations on Rights of Others...................................................................55
Section 12.11 Headings..........................................................................................56
Section 12.12 Nonpetition Covenants.............................................................................56
Exhibit A Form of Class [A] Certificate
Exhibit B Form of Class [B] Certificate
Exhibit C Form of Depository Agreement
Exhibit D Form of Servicer's Certificate
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
POOLING AND SERVICING AGREEMENT dated as of [_______________], among
[ ], a Delaware corporation, as depositor (the "Depositor"), USAA FEDERAL
SAVINGS BANK, a national banking association, as servicer (the "Servicer"),
and [TRUSTEE], a [_____] banking corporation, as Trustee (the "Trustee").
WHEREAS, the Depositor has purchased a portfolio of receivables
arising in connection with a pool of [retail installment sales contracts,
retail installment loans, purchase money notes or other notes], (the
"Contracts") secured by [new and used automobiles, light-duty trucks,
motorcycles, recreational vehicles, vans, minivans and/or sport utility
vehicles] financed by those Contracts and originated or acquired by the Seller
in the ordinary course of their respective businesses; and
WHEREAS, the Depositor, the Servicer and the Trustee wish to set
forth the terms and conditions pursuant to which the Trust (as hereinafter
defined) will acquire the Contracts from the Depositor, and the Servicer will
service the Contracts on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the Depositor, the Servicer and the Trustee
agree as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Advance" means either a Precomputed Advance or a Simple Interest
Advance or both, as applicable.
"Agreement" means this Pooling and Servicing Agreement.
"Amount Financed" means with respect to a Receivable, the amount
advanced under such Receivable toward the purchase price of the Financed Asset
and any related costs, exclusive of any amount allocable to the premium of
force-placed physical damage insurance covering the Financed Asset.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
rate of finance charges stated in the related Contract.
"Book-Entry Certificates" means, unless otherwise specified in this
Agreement, a beneficial interest in the Class [A] or Class [B] Certificates,
ownership and transfers of which shall be registered through book entries by a
Clearing Agency as described in Section 6.08.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banking institutions or trust companies in [ ], [ ] or the city
in which the Corporate Trust Office is located, are authorized or obligated by
law, regulation or executive order to be closed.
"Certificate Balance" means, as of any date, the aggregate
outstanding principal amount of the Certificates at such date.
"Certificate Owner" means, with respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Certificate Register" and "Certificate Registrar" mean the register
maintained and the registrar appointed pursuant to Section 6.03.
"Certificateholder" or "Holder" means a Person in whose name a
Certificate is registered in the Certificate Register.
"Class [A] Certificate" means a [___]% Asset Backed Certificate,
Class [A], evidencing a beneficial interest in the Trust, substantially in the
form of Exhibit A hereto.
"Class [A] Certificate Balance" means, as of any date of
determination, the Initial Class [A] Certificate Balance reduced by all
amounts previously distributed to Holders of Class [A] Certificates and
allocable to principal.
"Class [A] Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class [A] Principal Distributable Amount and
the Class [A] Interest Distributable Amount for such date.
"Class [A] Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the sum of the Class [A] Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Class [A] Interest Carryover Shortfall on such preceding Distribution Date,
over the amount in respect of interest that Holders of the Class [A]
Certificates actually received on such preceding Distribution Date, plus 30
days' interest on such excess, to the extent permitted by law, at the Class
[A] Pass-Through Rate.
"Class [A] Interest Distributable Amount" means, with respect to any
Distribution Date, 30 days of interest at the Class [A] Pass-Through Rate on
the Class [A] Certificate Balance on the last day of the preceding Collection
Period.
"Class [A] Pass-Through Rate" means [_____]% per annum.
"Class [A] Percentage" means [_____]%.
"Class [A] Pool Factor" means, as of the close of business on the
last day of any Collection Period, a seven-digit decimal figure equal to the
Class [A] Certificate Balance as of such Record Date divided by the Initial
Class [A] Certificate Balance.
"Class [A] Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of the Class [A] Monthly Principal
Distributable Amount and any outstanding Class [A] Principal Carryover
Shortfall from the preceding Distribution Date, over
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the amount in respect of principal that is actually distributed to Holders of
the Class [A] Certificates on such current Distribution Date.
"Class [A] Principal Distributable Amount" means, with respect to
any Distribution Date, the Class [A] Percentage of the Principal Distribution
Amount. In addition, on the Final Scheduled Distribution Date, the principal
required to be included in the Class [A] Principal Distributable Amount will
include the lesser of (a) the Class [A] Percentage of (i) any Scheduled
Payments of principal due and remaining unpaid on each Precomputed Receivable
and (ii) any principal due and remaining unpaid on each Simple Interest
Receivable, in each case, in the Trust as of the Final Scheduled Maturity Date
or (b) the amount that is necessary (after giving effect to the other amounts
to be deposited in the Distribution Account on such Distribution Date and
allocable to principal) to reduce the Class [A] Certificate Balance to zero.
"Class [B] Certificate" means a [___]% Asset Backed Certificate,
Class [B], evidencing a beneficial interest in the Trust, substantially in the
form of Exhibit B hereto.
"Class [B] Certificate Balance" means, as of any date of
determination, the Initial Class [B] Certificate Balance reduced by all
amounts previously distributed to Holders of Class [B] Certificates (or
deposited in the Reserve Account, exclusive of the Reserve Account Initial
Deposit) and allocable to principal and by Realized Losses to the extent of
the amount of such Realized Losses paid from the Class [B] Percentage of the
Principal Distribution Amount.
"Class [B] Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class [B] Principal Distributable Amount and
the Class [B] Interest Distributable Amount.
"Class [B] Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the sum of the Class [B] Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Class [B] Interest Carryover Shortfall on such preceding Distribution Date,
over the amount in respect of interest that Holders of the Class [B]
Certificates actually received on such preceding Distribution Date, plus 30
days' interest on such excess, to the extent permitted by law, at the Class
[B] Pass-Through Rate.
"Class [B] Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class [B] Monthly Interest Distributable
Amount for such Distribution Date and the Class [B] Interest Carryover
Shortfall for such Distribution Date. Unless otherwise specified in this
Agreement, interest with respect to the Class [B] Certificates shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
"Class [B] Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, 30 days of interest at the Class [B]
Pass-Through Rate on the Class [B] Certificate Balance on the last day of the
preceding Collection Period.
"Class [B] Pass-Through Rate" means [___]% per annum.
"Class [B] Percentage" means [___]%.
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"Class [B] Pool Factor" means, as of the close of business on the
last day of any Collection Period, a seven-digit decimal figure equal to the
Class [B] Certificate Balance as of such Record Date divided by the Initial
Class [B] Certificate Balance.
"Class [B] Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of the Class [B] Monthly Principal
Distributable Amount and any outstanding Class [B] Principal Carryover
Shortfall from the preceding Distribution Date, over the amount in respect of
principal that is actually distributed to Holders of the Class [B]
Certificates on such current Distribution Date.
"Class [B] Principal Distributable Amount" means, with respect to
any Distribution Date, the Class [B] Percentage of the Principal Distribution
Amount. In addition, on the Final Scheduled Distribution Date, the principal
required to be included in the Class [B] Principal Distributable Amount will
include the lesser of (a) the Class [B] Percentage of (i) any Scheduled
Payments of principal due and remaining unpaid on each Precomputed Receivable
and (ii) any principal due and remaining unpaid on each Simple Interest
Receivable, in each case, in the Trust as of the Final Scheduled Maturity Date
or (b) the amount that is necessary (after giving effect to the other amounts
to be deposited in the Distribution Account on such Distribution Date and
allocable to principal) to reduce the Class [B] Certificate Balance to zero.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means [______________________].
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a)(i).
"Collection Period" means a calendar month (or in the case of the
first Distribution Date, the period from and including the Cutoff Date to and
including the last day of the calendar month in which the Closing Date
occurs). Any amount stated as of the last day of a Collection Period or as of
the first day of a Collection Period shall give effect to the following
calculations as determined as of the close of business on such last day: (1)
all applications of collections, (2) all current and previous Payaheads, (3)
all applications of Payahead Balances, (4) all Advances and reductions of
Advances and (5) all distributions to be made on the following Distribution
Date.
"Contract" means a [retail installment sales contract, retail
installment loan, purchase money note or other note].
"Corporate Trust Office" shall have the meaning set forth in the
Indenture.
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"Cutoff Date" means, with respect to any Receivable, the date as of
which collections on such Receivable will be included in a Trust or the
related Trust Account pursuant to the related Agreement.
"Dealer" means the dealer who sold a Financed Asset to an Obligor
and who originated and assigned the related Receivable to an Originator.
"Definitive Certificates" shall have the meaning specified in
Section 6.10.
"Delivery" means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to the Trustee or its
nominee or custodian by physical delivery to the Trustee or its nominee or
custodian endorsed to, or registered in the name of, the Trustee or its
nominee or custodian or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102(4) of the UCC) transfer thereof (i) by
delivery of such certificated security endorsed to, or registered in the name
of, the Trustee or its nominee or custodian or endorsed in blank to a
securities intermediary (as defined in Section 8-102(14) of the UCC) and the
making by such securities intermediary of entries on its books and records
identifying such certificated securities as belonging to the Trustee or its
nominee or custodian and the sending by such securities intermediary of a
confirmation of the purchase of such certificated security by the Trustee or
its nominee or custodian, or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102(5) of the UCC) and the making by
such clearing corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the
appropriate securities account of a securities intermediary by the amount of
such certificated security, the identification by the clearing corporation of
the certificated securities for the sole and exclusive account of the
securities intermediary, the maintenance of such certificated securities by
such clearing corporation or its nominee, subject to the clearing
corporation's exclusive control, the sending of a confirmation by the
securities intermediary of the purchase by the Trustee or its nominee or
custodian of such securities and the making by such securities intermediary of
entries on its books and records identifying such certificated securities as
belonging to the Trustee or its nominee or custodian (all of the foregoing,
"Physical Property"), and, in any event, any such Physical Property in
registered form shall be in the name of the Trustee or its nominee or
custodian; and such additional or alternative procedures as may hereafter
become appropriate to effect the complete transfer of ownership of any such
Trust Account Property to the Trustee or its nominee or custodian, consistent
with changes in applicable law or regulations or the interpretation thereof;
(b) with respect to any securities issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that are book-entry securities held through the Federal Reserve
System pursuant to federal book-entry regulations, the following procedures,
all in accordance with applicable law, including applicable federal
regulations and Articles 8 and 9 of the UCC: book-entry registration of such
Trust Account Property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a securities intermediary that is also a "depository"
pursuant to applicable federal regulations
5
and issuance by such securities intermediary of a deposit advice or other
written confirmation of such book-entry registration to the Trustee or its
nominee or custodian of the purchase by the Trustee or its nominee or
custodian of such book-entry securities; the identification by the Federal
Reserve Bank of such book-entry securities on its record being credited to the
securities intermediary's participant's securities account; the making by such
securities intermediary of entries in its books and records identifying such
book-entry security held through the Federal Reserve System pursuant to
federal book-entry regulations as being credited to the Trustee's securities
account or custodian's securities account and indicating that such custodian
holds such Trust Account Property solely as agent for the Trustee or its
nominee or custodian; and such additional or alternative procedures as may
hereafter become appropriate to effect complete transfer of ownership of any
such Trust Account Property to the Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the interpretation
thereof; and
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Section 8-102(18) of the UCC and that is not
governed by clause (b) above, registration on the books and records of the
issuer thereof in the name of the securities intermediary, the sending of a
confirmation by the securities intermediary of the purchase by the Trustee or
its nominee or custodian of such uncertificated security, the making by such
securities intermediary of entries on its books and records identifying such
uncertificated certificates as belonging to the Trustee or its nominee or
custodian.
"Depositor" means USAA Acceptance, LLC, a Delaware corporation, and
its successors in interest to the extent permitted hereunder.
"Depository Agreement" means the agreement dated [_____________],
among the Trustee and The Depository Trust Company, as the initial Clearing
Agency, substantially in the form attached as Exhibit C hereto.
"Determination Date" means, unless otherwise specified in this
Agreement, the [______] Business Day of each calendar month.
"Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a)(iii).
"Distribution Date" means, with respect to each Collection Period,
the [_______] day of the following calendar month or, if such day is not a
Business Day, the immediately following Business Day, commencing on
[_________________].
"Eligible Deposit Account" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the United States of America or any one of the states thereof or the
District of Colombia (or any domestic branch of a foreign bank), having
corporate trust powers and acting as trustee for funds deposited in such
account, so long as any of the securities of such depository institution shall
have a credit rating from each Rating Agency in one of its generic rating
categories that signifies investment grade.
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"Eligible Institution" means (a) the corporate trust department of
the Trustee or any other entity specified in this Agreement or (b) a
depository institution organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), which (i) has either (A) a long-term
unsecured debt rating of [AAA] or better by [RATING AGENCY] and [A1] or better
by [RATING AGENCY] or (B) a certificate of deposit rating of [A-1+] by [RATING
AGENCY] and [P-1] or better by [RATING AGENCY] or any other long-term,
short-term or certificate of deposit rating acceptable to the Rating Agencies
and (ii) whose deposits are insured by the FDIC. If so qualified, the Trustee
or any such other entity specified in this Agreement may be considered an
Eligible Institution for the purposes of clause (b) of this definition.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (of any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than
such obligations the rating of which is based on the credit of a Person other
than such depository institution or trust company) thereof shall have a credit
rating from each of the Rating Agencies in the highest applicable rating
category granted thereby;
(c) commercial paper, variable amount notes or other short term debt
obligations, having, at the time of the investment or contractual commitment
to invest therein, a rating from each of the Rating Agencies in the highest
applicable rating category granted thereby;
(d) investments in money market or common trust funds having a
rating from each of the Rating Agencies in the highest applicable rating
category granted thereby (including funds for which the Trustee or any of its
Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by
the full faith and credit of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (b);
(g) any other investment with respect to which the Trustee or the
Servicer has received written notification from the Rating Agencies that the
acquisition of such investment as
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an Eligible Investment will not result in a withdrawal or downgrading of
the ratings of the Certificates.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Default" means an event specified in Section 9.01.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means [______________________].
"Final Scheduled Maturity Date" means [______________________].
"Financed Asset" means a new and used automobile, light-duty truck,
motorcycle, recreational vehicle, van, minivan or sport utility vehicle,
together with all accessions thereto, securing an Obligor's indebtedness under
the related Contract.
"Initial Certificate Balance" means $[______________________].
"Initial Class [A] Balance" means $[______________________].
"Initial Class [B] Balance" means $[______________________].
"Initial Collection Period" means the period beginning on, and
including, [_______________] to and including [________________].
"Insolvency Event" means, with respect to a specified Person, (a)
the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of such Person or any substantial part of its property
in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation or such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by, a receiver,
liquidator, assignee, custodian, trustee, sequestrator, or similar official
for such Person or for any substantial part of its property, or the making by
such Person of any general assignment for the benefit of creditors, or the
failure by such Person generally to pay its debts as such debts become due, or
the taking of action by such Person in furtherance of any of the foregoing.
"Interest Distribution Amount" means, with respect to any
Distribution Date, the sum of the following amounts in respect of the
Receivables and the preceding Collection Period: (i) that portion of all
collections on Receivables (including Payaheads that have become due during
such Collection Period) allocable to interest, (ii) Liquidation Proceeds with
respect to the Receivables to the extent allocable to interest due thereon in
accordance with the Servicer's
8
customary servicing procedures; (iii) all Advances made by the Servicer of
interest due on Receivables, (iv) the Purchase Amount of each Receivable that
became a Purchased Receivable during the related Collection Period to the
extent attributable to accrued interest on such Receivable and (v) Recoveries
for such Collection Period; provided, however, that in calculating the
Interest Distribution Amount the following will be excluded: (i) amounts
received on Precomputed Receivables to the extent that the Servicer has
previously made an unreimbursed Precomputed Advance of interest; (ii)
Liquidation Proceeds with respect to a particular Precomputed Receivable to
the extent of any unreimbursed Precomputed Advances of interest; (iii) all
payments and proceeds (including Liquidation Proceeds) of any Purchased
Receivables the Purchase Amount of which has been included in the Interest
Distribution Amount in a prior Collection Period; (v) the sum for all Simple
Interest Receivables of collections on each such Simple Interest Receivable
received during the preceding Collection Period in excess of the amount of
interest that would be due on the aggregate Principal Balance of the Simple
Interest Receivables during such Collection Period at their respective APRs if
a payment were received on each Simple Interest Receivable during such
Collection Period on the date payment is due under the terms of the related
Contract; (vi) Liquidation Proceeds with respect to a Simple Interest
Receivable attributable to accrued and unpaid interest thereon (but not
including interest for the then current Collection Period) but only to the
extent of any unreimbursed Simple Interest Advances; and (vii) amounts
released from the Pre-Funding Account.
"Investment Earnings" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited to the Distribution Account on
such Distribution Date pursuant to Section 5.01(b).
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable or Financed Asset, as applicable, by
operation of law as a result of any act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable liquidated by the
Servicer through sale of a Financed Asset or otherwise.
"Liquidation Proceeds" means, with respect to a Liquidated
Receivable, the monies collected in respect thereof, from whatever source,
during the Collection Period in which such Receivable became a Liquidated
Receivable, net of the sum of any amounts expended by the Servicer in
connection with such liquidation, plus any amounts required by law to be
remitted to the Obligor.
"Obligor" on a Receivable means the purchaser or co-purchasers of
the Financed Asset and any other Person who owes payments under the
Receivable.
"Officers' Certificate" means a certificate signed by the (a)
chairman of the board, the president, any executive vice president or any vice
president and (b) any treasurer, assistant treasurer, secretary or assistant
secretary of the Depositor or the Servicer, as appropriate.
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"Opinion of Counsel" means one or more written opinions of counsel,
who may be an employee of or counsel to the Depositor or the Servicer, which
counsel shall be acceptable to the Trustee or Rating Agencies, as applicable.
"Original Pool Balance" means the sum, as of any date, of the Pool
Balance as of the Cutoff Date.
"Originator" means [____________________________] which purchased a
Contract from a Dealer and sold such Contract to the Seller.
"Outstanding Precomputed Advances" on the Precomputed Receivables
means the sum, as of the close of business on the last day of a Collection
Period, of all Precomputed Advances, reduced as provided by Section 5.04(a).
"Outstanding Simple Interest Advances" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Simple Interest Advances, reduced as provided in
Section 5.04(b).
"Payahead" on a Receivable that is a Precomputed Receivable means
the amount, as of the close of business on the last day of a Collection
Period, computed in accordance with Section 5.03 with respect to such
Receivable.
"Payahead Account" means the account designated as such, established
and maintained pursuant to Section 5.01(c)(i).
"Payahead Balance" on a Precomputed Receivable means the sum, as of
the close of business on the last day of a Collection Period, of all Payaheads
made by or on behalf of the Obligor with respect to such Precomputed
Receivable, as reduced by applications of previous Payaheads with respect to
such Precomputed Receivable, pursuant to Sections 5.03 and 5.04.
"Person" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization, or government or any agency or political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day of
a Collection Period, the aggregate Principal Balance of the Receivables as of
such date (excluding Purchased Receivables and Liquidated Receivables).
"Precomputed Advance" means the amount, as of the close of business
on the last day of a Collection Period, which the Servicer is required to
advance on any Precomputed Receivable pursuant to Section 5.04(a).
"Precomputed Receivable" means any Receivable under which the
portion of each payment allocable to earned interest (which may be referred to
in the Receivable as an add-on finance charge) and the portion allocable to
the Amount Financed are determined according to
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the sum of periodic balances or the sum of monthly balances or any equivalent
method, or which is a monthly actuarial receivable.
"Principal Balance" means the Amount Financed minus the sum, as of
the close of business on the last day of a Collection Period, of (a) with
respect to a Precomputed Receivable (i) that portion of all Scheduled Payments
due on or prior to such day allocable to principal using the actuarial or
constant yield method, (ii) any refunded portion of extended warranty
protection plan costs or of physical damage, credit life or disability
insurance premiums included in the Amount Financed, (iii) any payment of the
Purchase Amount allocable to principal and (iv) any prepayment in full or any
partial prepayments applied to reduce the Principal Balance and (b) with
respect to a Simple Interest Receivable (i) the portion of all payments made
by or on behalf of the related Obligor on or prior to such day and allocable
to principal using the Simple Interest Method and (ii) any payment of the
Purchase Amount allocable to principal.
"Principal Distribution Amount" means, for any Distribution Date,
the sum of the following amounts with respect to the preceding Collection
Period: (i) that portion of all collections on Receivables (including amounts
withdrawn from the Payahead Account but excluding amounts deposited into the
Payahead Account) allocable to principal; (ii) all Liquidation Proceeds
attributable to the principal amount of Receivables that became Liquidated
Receivables during the Collection Period in accordance with the Servicer's
customary servicing procedures, plus the amount of Realized Losses with
respect to such Liquidated Receivables; (iii) all Precomputed Advances made by
the Servicer of principal due on the Precomputed Receivables; (iv) to the
extent attributable to principal, the Purchase Amount received with respect to
each Receivable that became a Purchased Receivable during the related
Collection Period; (v) partial prepayments relating to refunds of extended
warranty protection plan costs or of physical damage, credit life or
disability insurance policy premiums, but only if such costs or premiums were
financed by the respective Obligor as of the date of the original Contract;
and (vi) on the Final Scheduled Distribution Date, any amounts advanced by the
Servicer on such Final Scheduled Distribution Date with respect to principal
on the Receivables; provided, however, that in calculating the Principal
Distribution Amount the following will be excluded: (i) amounts received on
Precomputed Receivables to the extent that the Servicer has previously made an
unreimbursed Precomputed Advance of principal; (ii) Liquidation Proceeds with
respect to a particular Precomputed Receivable to the extent of any
unreimbursed Precomputed Advances of principal; (iii) all payments and
proceeds (including Liquidation Proceeds) of any Purchased Receivables the
Purchase Amount of which has been included in the Principal Distribution
Amount in a prior Collection Period, and (iv) Recoveries.
"Purchase Amount" means the amount, as of the close of business on
the last day of a Collection Period, required to prepay in full a Receivable
under the terms thereof including interest to the end of the month of
purchase.
"Purchased Receivable" means a Receivable purchased as of the close
of business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 by the Depositor pursuant to Section 3.02 or by the Seller
pursuant to Section 3.01.
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"Rating Agency" means [RATING AGENCY] and [RATING AGENCY]. If no
such organization or successor is any longer in existence, "Rating Agency"
shall mean any nationally recognized statistical rating organization or other
comparable Person designated by the Depositor, notice of which designation
shall be given to the Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given 10 days' (or such shorter period as
shall be acceptable to each Rating Agency) prior notice thereof and that each
of the Rating Agencies shall have notified the Depositor, the Servicer and the
Trustee in writing that such action will not result in a reduction or
withdrawal of the then current rating of the Certificates.
"Realized Losses" means, with respect to any Receivable that becomes
a Liquidated Receivable, the excess of the Principal Balance of such
Liquidated Receivable over Liquidation Proceeds to the extent allocable to
principal.
"Receivable" means any Contract transferred to the Trust on the
Closing Date that is listed on Schedule A to this Agreement (which schedule
may be in the form of microfiche).
"Receivable Files" means the documents specified in Section 3.04.
["Receivables Purchase Agreement" means the purchase agreement dated
as of [_______] between the Seller, as seller and the Depositor, as
purchaser.]
"Record Date" with respect to each Distribution Date means the first
day of the calendar month in which such Distribution Date occurs, unless
otherwise specified in this Agreement.
"Recoveries" means, with respect to any Receivable that becomes a
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.
"Reserve Account" means the account designated as such, established
and maintained pursuant to Section 5.07.
"Reserve Account Initial Deposit" means, with respect to the Closing
Date and taking into account any transfer of Subsequent Receivables on such
date, an amount equal to the Specified Reserve Account Balance on the Closing
Date (which is equal to $[________________]) and, with respect to each
Subsequent Transfer Date after the Closing Date, an amount equal to [___]% of
the Principal Balance of the Subsequent Receivables transferred to the Trust
on such Subsequent Transfer Date.
"Reserve Account Property" has the meaning assigned thereto in
Section 5.07(b).
"Scheduled Payment" on a Precomputed Receivable means that portion
of the payment required to be made by the Obligor during each Collection
Period sufficient to amortize
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the Principal Balance thereof under the actuarial method over the term of the
Receivable and to provide interest at the APR.
"Seller" means USAA Federal Savings Bank, a federally chartered
savings association and its successors in interest.
"Servicer" means USAA Federal Savings Bank, as the servicer of the
Receivables, and each successor Servicer pursuant to Section 8.03 or 9.02.
"Servicer's Certificate" means an Officers' Certificate of the
Servicer delivered pursuant to Section 4.09, substantially in the form of
Exhibit D.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 4.08.
"Servicing Rate" means [___]% per annum.
"Simple Interest Advance" means the amount of interest, as of the
close of business on the last day of a Collection Period, which the Servicer
is required to advance on the Simple Interest Receivables pursuant to Section
5.04(b).
"Simple Interest Method" means the method of allocating a fixed
level payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid principal balance multiplied by the
period of time elapsed since the preceding payment of interest was made and
the remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Account Balance" means [STATE FORMULA].
"Total Distribution Amount" means, for each Distribution Date, the
sum of the Interest Distribution Amount and the Principal Distribution Amount
(other than the portion thereof attributable to Realized Losses).
"Trust" shall have the meaning set forth in this Agreement.
"Trustee" means [TRUSTEE], a [_____], not in its individual
capacity, but as Trustee under this pooling and servicing agreement, or, its
successors in interest and any successor Trustee hereunder.
"Trustee Officer" means the chairman or vice-chairman of the
board of directors, the chairman or vice-chairman of the executive committee
of the board of directors, the president, any vice president, the secretary,
any assistant secretary, the treasurer, any assistant treasurer, the cashier,
any assistant cashier, any trust officer or assistant trust officer, the
controller and any assistant controller or any other officer of the Trustee
customarily performing
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functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction on the date thereof.
Section 1.02 Other Definitional Provisions. (a) All terms defined in
this Agreement shall have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto or thereto unless otherwise
defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined herein or in any such
certificate or other document, and accounting terms partly defined herein or
in any such certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms herein or
in any such certificate or other document are inconsistent with the meanings
of such terms under generally accepted accounting principles, the definitions
contained herein, or in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and word of similar
import when used herein shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Article, Section, Schedule and
Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement, respectively; and
the term "including" and its variations shall mean "including without
limitation".
(d) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
Establishment of Trust
Section 2.01 Creation of Trust. Upon the execution of this Agreement
by the parties hereto, there is hereby created a separate trust, which shall
be known as [ ] Trust 200__-__ (the "Trust"). The Trust shall be administered
pursuant to the provisions of this Agreement for the benefit of the
Certificateholders.
Section 2.02 Acceptance by Trustee. The Trustee hereby accepts all
consideration conveyed by the Depositor pursuant to Section 2.03 and declares
that it will hold
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such consideration upon the trusts set forth herein for the benefit of the
Certificateholders, subject to the terms and provisions of this Agreement.
Section 2.03 Conveyance of Receivables. In consideration of the
Trustee's delivery on the Closing Date to or upon the order of the Depositor
of Class [A] Certificates in an initial aggregate principal amount equal to
the Initial Class [A] Balance and Class [B] Certificates in an initial
aggregate principal amount equal to the Initial Class [B] Balance, the
Depositor does hereby sell, transfer, assign, set over and otherwise convey to
the Trustee for the benefit of the Certificateholders, without recourse
(subject to the obligations set forth herein), all right, title and interest
of the Depositor in and to:
(1) the Receivables, and all moneys due thereon on or after
__________, in the case of Precomputed Receivables, and all moneys
received thereon on and after __________, in the case of Simple
Interest Receivables;
(2) the security interests in the Financed Assets granted by
Obligors pursuant to the Receivables and any other interest of the
Seller or the Depositor in such Financed Assets;
(3) any proceeds with respect to the Receivables from claims on any
physical damage, credit life or disability insurance policies
covering Financed Assets or Obligors;
(4) any proceeds from recourse to Dealers on Receivables with
respect to which the Servicer has determined in accordance with its
customary servicing procedures that eventual payment in full is
unlikely;
(5) any Financed Asset that shall have secured any such Receivable
and shall have been acquired by or on behalf of the Seller, the
Depositor, the Servicer or the Trust;
(6) all right, title and interest of the Depositor under the
Receivables Purchase Agreement, including, without limitation, the
right of the Depositor to cause the Seller to purchase Receivables
under certain circumstances.
(7) the proceeds of any and all of the foregoing.
ARTICLE III.
The Receivables
Section 3.01 Representations and Warranties of the Seller. (a) The
Seller has made each of the representations and warranties set forth under
Section 3.02(b) of the Receivables Purchase Agreement and has consented to the
assignment by the Depositor to the Trust of the Depositor's rights with
respect thereto. Such representations and warranties speak as of the execution
and delivery of this Agreement and as of the Closing Date, but shall survive
the sale, transfer and assignment of the Receivables to the Trust. Pursuant to
Section 2.02 of this Agreement, the Depositor has sold, assigned, transferred
and conveyed to the Trust, as part of the
15
assets of the Trust, its rights under the Receivables Purchase Agreement,
including the representations and warranties of the Seller in Section 3.02(b)
therein, upon which the Trustee relies in accepting the Receivables and
delivering the Certificates, together with all rights of the Depositor with
respect to any breach thereof, including the right to require the Seller to
repurchase Receivables in accordance with the Receivables Purchase Agreement.
It is understood and agreed that the representations and warranties referred
to in this Section shall survive the delivery of the Receivable Files to the
Trustee or any custodian.
(b) the Seller hereby agrees that the Trustee shall have the right,
on behalf of the Trust and the Certificateholders, to enforce any and all
rights under the Receivables Purchase Agreement assigned to the Trust herein,
including the right to cause the Sellers to repurchase any Receivable with
respect to which it is in breach of any of its representations and warranties
set forth in Section 3.02(b) therein, directly against the Sellers as though
the Trustee, as trustee of the Trust, were a party to the Receivables Purchase
Agreement, and the Trustee shall not be obligated to exercise any such rights
indirectly through the Depositor.
Section 3.02 Representations and Warranties of the Depositor. The
Depositor makes the following representations and warranties as to the
Receivables on which the Trustee relies in accepting the Receivables and
delivering the Certificates and the Security Insurer relies in issuing the
Policy. Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date, but shall survive the
sale, transfer and assignment of the Receivables by the Depositor to the
Trust.
(a) Title. It is the intention of the Depositor that (i) the
transfer and assignment herein contemplated constitute a sale of the
Receivables from the Depositor to the Trust, conveying good title thereto,
free and clear of any Liens or rights of other Persons and (ii) the beneficial
interest in and title to the Receivables not be part of the debtor's estate in
the event of the filing of a bankruptcy petition by or against the Depositor
under any bankruptcy law. No Receivable has been sold, transferred, assigned
or pledged by the Depositor to any Person other than the Trust. Immediately
prior to the transfer and assignment herein contemplated, the Depositor had
good and marketable title to each Receivable, free and clear of all Liens and
rights of others and, immediately upon the transfer thereof, the Trust shall
have good and marketable title to each such Receivable, free and clear of all
Liens and rights of others; and the transfer has been perfected under the UCC.
(b) All Filings Made. All filings (including UCC filings) necessary
in any jurisdiction to give the Trust a first perfected ownership interest in
the Receivables shall have been made.
Section 3.03 Repurchase Upon Breach. The Depositor, the Servicer or
the Trustee, as the case may be, shall inform the other parties to this
Agreement promptly, in writing, upon the discovery of any breach of the
Depositor's representations and warranties made pursuant to Section 3.01 of
this Agreement or Section [___] of the Receivable Purchase Agreement or of the
Depositor's representations and warranties made pursuant to Section 3.02
above. Unless any such breach shall have been cured by the last day of the
second Collection Period following the discovery thereof by the Trustee or
receipt by the Trustee of notice from the Depositor or the Servicer of such
breach, the Depositor shall be obligated to repurchase any
16
Receivable materially and adversely affected by any such breach as of such
last day (or, at the Depositor's option, the last day of the first Collection
Period following such discovery or notice). In consideration of the repurchase
of any Receivable, the Depositor shall remit the Purchase Amount, in the
manner specified in Section 5.05 provided, however, that the obligation of the
Depositor to repurchase any receivable arising solely as a result of a breach
of the Seller's representations and warranties under Section 3.02 of the
Receivables Purchase Agreement is subject to the receipt by the Depositor of
the Purchase Amount from the Seller. Subject to the provisions of Section
7.03, the sole remedy of the Trustee, the Trust or the Certificateholders with
respect to a breach of representations and warranties pursuant to Section 3.01
and 3.02 and the Agreement contained in this Section shall be to require the
Depositor to repurchase Receivables pursuant to this Section, subject to the
conditions contained herein or to enforce the Seller's obligation to the
Depositor to repurchase such Receivables pursuant to the Receivables Purchase
Agreement.
Section 3.04 Custody of Receivable Files. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Trustee,
upon the execution and delivery of this Agreement, hereby revocably appoints
the Servicer, and the Servicer hereby accepts such appointment, to act as the
agent of the Trustee as custodian of the following documents or instruments
which are hereby constructively delivered to the Trustee as of the Cutoff Date
with respect to each Receivable:
(i) the original of the Receivable;
(ii) the original credit application fully executed by the
Obligor;
(iii) the original certificate of title or such documents
that the Servicer or the Depositor shall keep on file, in accordance
with its customary procedures, evidencing the security interest of
the Depositor in the Financed Asset; and
(iv) any and all other documents that the Servicer or the
Depositor shall keep on file, in accordance with its customary
procedures, relating to a Receivable, an Obligor or a Financed
Asset.
Section 3.05 Duties of Servicer as Custodian. (a) Safekeeping. The
Servicer shall hold the Receivable Files as custodian on behalf of the Trustee
for the benefit of all present and future Certificateholders, and shall
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Trustee to comply with
this Agreement. In performing its duties as custodian the Servicer shall act
with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to the receivable files relating to all
comparable [new and used automobiles, light-duty trucks, motorcycles,
recreational vehicles, vans, minivans and/or sport utility vehicles]
receivables that the Servicer services for itself or others. The Servicer
shall conduct, or cause to be conducted, periodic audits of the Receivable
Files held by it under this Agreement, and of the related accounts, records
and computer systems, in such a manner as shall enable the Trustee to verify
the accuracy of the Servicer's record keeping. The Servicer shall promptly
report to the Trustee any failure on its part to hold the Receivable Files and
maintain its accounts, records and computer systems as herein provided and
shall promptly take appropriate action to remedy any
17
such failure. Nothing herein shall be deemed to require an initial review or
any periodic review by the Trustee of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B to
this Agreement or at such other office as shall be specified to the Trustee by
written notice not later than 30 days after any change in location. The
Servicer shall make available to the Trustee or its duly authorized
representatives, attorneys or auditors a list of locations of the Receivable
Files and the related accounts, records and computer systems maintained by the
Servicer at such times during normal business hours as the Trustee shall
instruct.
(c) Release of Documents. Upon instruction from the Trustee, the
Servicer shall release any Receivable File to the Trustee, the Trustee's agent
or the Trustee's designee, as the case may be, at such place or places as the
Trustee may designate, as soon as practicable.
Section 3.06 Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trustee Officer.
Section 3.07 Custodian's Indemnification. The Servicer as custodian
shall indemnify the Trustee and each of its officers, directors, employees and
agents for any and all liabilities, obligations, losses, compensatory damages,
payments, costs, or expenses of any kind whatsoever that may be imposed on,
incurred by or asserted against the Trustee or any of its officers, directors,
employees or agents as the result of any improper act or omission in any way
relating to the maintenance and custody by the Servicer as custodian of the
Receivable Files; provided, however, that the Servicer shall not be liable to
the Trustee or any such officers, director, employee or agent of the Trustee
for any portion of any such amount resulting from the willful misfeasance, bad
faith or negligence of the Trustee or any such officer, director, employee or
agent of the Trustee.
Section 3.08 Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and
shall continue in full force and effect until terminated pursuant to this
Section. If __________ shall resign as Servicer in accordance with the
provisions hereof, or if all of the rights and obligations of any Servicer
shall have been terminated under Section 9.01, the appointment of such
Servicer as custodian shall be terminated by the Trustee or by Holders of the
Class [A] Certificates evidencing not less than [___]% of the Class [A]
Certificate Balance, in the same manner as the Trustee or such Holders may
terminate the rights and obligations of the Servicer under Section 9.01. The
Trustee may terminate the Servicer's appointment as custodian, with cause, at
any time upon written notification to the Servicer, and without cause upon 30
days' prior written notification. As soon as practicable after any termination
of such appointment, the Servicer shall deliver the Receivable Files to the
Trustee or the Trustee's agent at such place or places as the Trustee may
reasonably designate.
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ARTICLE IV.
Administration and Servicing of Receivables
Section 4.01 Duties of Servicer. The Servicer, as agent for the
Trustee (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable receivables that it services for
itself or others. The Servicer's duties shall include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting
tax information to Obligors, accounting for collections, furnishing monthly
and annual statements to the Trustee with respect to distributions, and making
Advances pursuant to Section 5.04. Subject to the provisions of Section 4.02,
the Servicer shall follow its customary standards, policies and procedures in
performing its duties as Servicer. Without limiting the generality of the
foregoing, the Servicer is authorized and empowered by the Trustee to execute
and deliver, on behalf of itself, the Trust, the Certificateholders, the
Trustee, or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other
comparable instruments, with respect to such Receivables or to the Financed
Assets securing such Receivables. If the Servicer shall commence a legal
proceeding to enforce a Receivable, the Trustee (in the case of any Receivable
other than a Purchased Receivable) shall thereupon be deemed to have
automatically assigned, solely for the purpose of collection, such Receivable
to the Servicer. If in any enforcement suit or legal proceeding it shall be
held that the Servicer may not enforce a Receivable on the ground that it
shall not be a real party in interest or a holder entitled to enforce such
Receivable, the Trustee shall, at the Servicer's expense and direction, take
steps to enforce such Receivable, including bringing suit in its name or the
name of the Certificateholders. The Trustee shall, upon written request of the
Servicer, furnish the Servicer with any powers of attorney and other documents
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.
Section 4.02 Collection and Allocation of Receivable Payments. The
Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable [new and used automobiles, light-duty trucks,
motorcycles, recreational vehicles, vans, minivans and/or sport utility
vehicles] receivables that it services for itself or others. The Servicer
shall allocate collections between principal and interest in accordance with
the customary servicing procedures it follows with respect to all comparable
[new and used automobiles, light-duty trucks, motorcycles, recreational
vehicles, vans, minivans and/or sport utility vehicles] receivables that it
services for itself or others. The Servicer may grant extensions, rebates or
adjustments on a Receivable, which shall not, for the purposes of this
Agreement, modify the original due dates or amounts of the Scheduled Payments
on a Precomputed Receivable or the original due dates or amounts of the
originally scheduled payments of interest on Simple Interest Receivables;
provided, however, that if the Servicer extends the date for final payment by
the Obligor of any Receivable beyond the Final Scheduled Maturity Date, it
shall promptly repurchase such Receivable from the Trust in accordance with
the terms of Section 4.07. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course
of servicing a
19
Receivable. The Servicer shall not agree to any alteration of the interest
rate on any Receivable or of the amount of any Scheduled Payment on
Precomputed Receivables or the originally scheduled payments on Simple
Interest Receivables.
Section 4.03 Realization Upon Receivables. On behalf of the Trust,
the Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Asset securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary
or advisable in its servicing of such receivables, which shall include
reasonable efforts to realize upon any recourse, if any, to Dealers and
selling the Financed Asset at public or private sale. The foregoing shall be
subject to the provision that, in any case in which the Financed Asset shall
have suffered damage, the Servicer shall not expend funds in connection with
the repair or the repossession of such Financed Asset unless it shall
determine in its discretion that such repair and/or repossession will increase
the Liquidation Proceeds by an amount greater than the amount of such
expenses.
Section 4.04 Physical Damage Insurance. The Servicer, in accordance
with its customary servicing procedures, shall require that each Obligor shall
have obtained physical damage insurance covering the Financed Asset as of the
execution of the Receivable.
Section 4.05 Maintenance of Security Interests in Financed Assets.
The Servicer shall, in accordance with its customary servicing procedures,
take such steps as are necessary to maintain perfection of the security
interest created by each Receivable in the related Financed Asset. The Trustee
hereby authorizes the Servicer to take such steps as are necessary to
re-perfect such security interest on behalf of the Trust in the event of the
relocation of a Financed Asset or for any other reason.
Section 4.06 Covenants of Servicer. The Servicer shall not release
the Financed Asset securing any Receivable from the security interest granted
by such Receivable in whole or in part except in the event of payment in full
by the Obligor thereunder or repossession, nor shall the Servicer impair the
rights of the Trust or the Certificateholders in such Receivables, nor shall
the Servicer increase the number of scheduled payments due under a Receivable.
Section 4.07 Purchase of Receivables Upon Breach. The Servicer or
the Trustee shall inform the other party and the Depositor promptly, in
writing, upon the discovery of any breach pursuant to Section 4.02, 4.05 or
4.06. Unless the breach shall have been cured by the last day of the second
Collection Period following such discovery (or, at the Servicer's election,
the last day of the first following Collection Period), the Servicer shall
purchase any Receivable materially and adversely affected by such breach as of
such last day. If the Servicer takes any action in any Collection Period
pursuant to Section 4.02 that impairs the right of the Trustee, the Trust or
the Certificateholders in any Receivable or as otherwise provided in Section
4.02, the Servicer shall purchase such Receivable as of the last day of such
Collection Period. In consideration of the purchase of any such Receivable
pursuant to either of the two preceding sentences, the Servicer shall remit
the Purchase Amount in the manner specified in Section 5.05. For purposes of
this Section, the Purchase Amount shall consist in part of a release by the
Servicer of all rights of reimbursement with respect to Outstanding
Precomputed Advances or
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Outstanding Simple Interest Advances on the Receivable. Subject to Section
8.02, the sole remedy of the Trustee, the Trust or the Certificateholders with
respect to a breach pursuant to Section 4.02, 4.05 or 4.06 shall be to require
the Servicer to repurchase Receivables pursuant to this Section. The Trustee
shall have no duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section.
Section 4.08 Servicing Fee. The Servicing Fee for a Distribution
Date shall equal the product of (a) one twelfth, (b) the Servicing Rate and
(c) the Pool Balance as of the first day of the preceding Collection Period.
The Servicer shall also be entitled to all late fees, prepayment charges
(including, in the case of a Receivable that provides for payments according
to the "Rule of 78s" and that is prepaid in full, the difference between the
Principal Balance of such Receivable (plus accrued interest to the date of
prepayment) and the principal balance of such Receivable computed according to
the "Rule of 78s") and other administrative fees or similar charges allowed by
applicable law with respect to the Receivables, collected (from whatever
source) on the Receivables, plus any reimbursement pursuant to Section 8.02.
Section 4.09 Servicer's Certificate. Not later than [11:00 a.m. (New
York time)] on each Determination Date, the Servicer shall deliver to the
Trustee, the Rating Agencies and the Depositor, a Servicer's Certificate
containing all information necessary to make the distributions on the related
Distribution Date pursuant to Section 5.06 (including, if required,
withdrawals from any Reserve Account, withdrawals from or deposits to the
Payahead Account and Precomputed Advances by the Servicer pursuant to Section
5.04) for the related Collection Period. Receivables to be purchased by the
Servicer or to be repurchased by the Depositor or the Seller shall be
identified by the Servicer by account number with respect to such Receivable
(as specified in Schedule A).
Section 4.10 Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Trustee, on or before [___________] of
each year, an Officers' Certificate, dated as of [_____________] of the
preceding year, stating that (A) a review of the activities of the Servicer
during the preceding 12-month period (or such shorter period as shall have
elapsed since the Closing Date) and of its performance hereunder and under
this Agreement has been made under such officers' supervision and (B) to the
best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof.
The Trustee shall send a copy of such certificate and the report referred to
in Section 4.11 to the Rating Agencies. A copy of such certificate and the
report referred to in Section 4.11 may be obtained by any Certificateholder by
a request in writing to the Trustee addressed to the Corporate Trust Office.
(b) The Servicer shall deliver to the Trustee and to the Rating
Agencies, promptly after having obtained knowledge thereof, but in no event
later than 5 Business Days thereafter, written notice in an Officers'
Certificate of any event which with the giving of notice or lapse of time, or
both, would become an Event of Default under Section 9.01, clause (a) or (b).
Section 4.11 Annual Independent Certified Public Accountant's
Report. The Servicer shall cause a firm of independent certified public
accountants, which may also render
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other services to the Servicer, the Depositor or their Affiliates, to deliver
to the Owner Trustee and the Trustee on or before [__________] of each year
beginning [________ ], [ ], a report addressed to the Board of Directors of
the Servicer, to the effect that such firm has examined the financial
statements of the Servicer and issued its report thereon and that such
examination (1) was made in accordance with generally accepted auditing
standards and accordingly included such tests of the accounting records and
such other auditing procedures as such firm considered necessary in the
circumstances; (2) included tests relating to [automotive] [recreation
vehicle] loans serviced for others in accordance with the requirements of the
Uniform Single Attestation Program for Mortgage Bankers (the "Program"), to
the extent the procedures in such Program are applicable to the servicing
obligations set forth in this Agreement; and (3) except as described in the
report, disclosed no exceptions or errors in the records relating to
[automobile and light-duty truck] [recreational vehicle] loans serviced for
others that, in the firm's opinion, paragraph four of such Program requires
such firm to report.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
Section 4.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders
access to the Receivable Files in such cases where the Certificateholder shall
be required by applicable statutes or regulations to review such
documentation. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the offices of the
Servicer. Nothing in this Section shall affect the obligation of the Servicer
to observe any applicable law prohibiting disclosure of information regarding
the Obligors, and the failure of the Servicer to provide access to information
as a result of such obligation shall not constitute a breach of this Section.
Section 4.13 Servicer Expenses. The Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and
reports to Certificateholders.
Section 4.14 Appointment of Subservicer. The Servicer may at any
time appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided that the Rating Agency Condition shall have been
satisfied in connection therewith; and, provided, further, that the Servicer
shall remain obligated and shall be liable to the Trustee and the
Certificateholders for the servicing and administering of the Receivables in
accordance with the provisions hereof without diminution of such obligation
and liability by virtue of the appointment of such subservicer and to the same
extent and under the same terms and conditions as if the Servicer alone were
servicing and administering the Receivables. The fees and expenses of the
subservicer shall be as agreed between the Servicer and its subservicer from
time to time, and none of the Trust, the Trustee or the Certificateholders
shall have any responsibility therefor.
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ARTICLE V.
Distributions; Reserve Account;
Statements to Certificateholders
Section 5.01 Establishment of Trust Accounts. (a) (i) The Servicer,
for the benefit of the Certificateholders, shall establish and maintain in the
name of the Trustee an Eligible Deposit Account (the "Collection Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Certificateholders. Investment earnings on funds
in the Collection Account shall be paid to the Servicer as additional
servicing compensation.
(ii) The Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Trustee a non-interest
bearing account (the "Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Certificateholders.
(b) Funds on deposit in the Collection Account shall be invested by
the Trustee in Eligible Investments selected in writing by the Servicer or an
investment manager selected by the Servicer, which investment manager shall
have agreed to comply with the terms of this Agreement as they relate to
investing such funds; provided, however, that it is understood and agreed that
the Trustee shall not be liable for any loss arising from such investment in
Eligible Investments. All such Eligible Investments shall be held by the
Trustee for the benefit of the Servicer, and on each Distribution Date all
interest and other investment income (net of losses and investment expenses)
on funds on deposit therein shall be paid to the Servicer. Other than as
permitted by the Rating Agencies, funds on deposit in the Collection Account
shall be invested in Eligible Investments that will mature (A) not later than
the Business Day immediately preceding the next Distribution Date or (B) on
such next Distribution Date if either (x) such investment is held in the
corporate trust department of the institution with which the Collection
Account is then maintained and is invested in a time deposit of (the Trustee)
rated at least [A-1] by [RATING AGENCY] and [P-1] by [RATING AGENCY] (such
account being maintained within the corporate trust department of the Trustee)
or (y) the Trustee (so long as the short-term unsecured debt obligations of
the Trustee are either (1) rated at least [P-1] by [RATING AGENCY] and [A-1]
by [RATING AGENCY] on the date such investment is made or (2) guaranteed by an
entity whose short-term unsecured debt obligations are rated at least [P-1] by
[RATING AGENCY] and [A-1] by [RATING AGENCY] on the date such investment is
made) has agreed to advance funds on such Distribution Date to the
Distribution Account in the amount payable on such investment on such
Distribution Date pending receipt thereof to the extent necessary to make
distributions on such Distribution Date. The guarantee referred to in clause
(y) of the preceding sentence shall be subject to the Rating Agency Condition.
For the purpose of the foregoing, unless the Trustee affirmatively agrees in
writing to make such advance with respect to such investment prior to the time
an investment is made, it shall not be deemed to have agreed to make such
advance. Funds deposited in the Collection Account upon the maturity of any
Eligible Investments on the day immediately preceding a Distribution Date are
not required to be invested overnight. If, at any time, the Collection Account
ceases to be an Eligible Deposit Account, the Trustee (or the Servicer on its
behalf) shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency
23
may consent) establish a new Collection Account as an Eligible Deposit Account
and shall transfer any cash and/or any investments to such new account.
(c) (i) The Servicer shall establish and maintain with the
Trustee an Eligible Deposit Account (the "Payahead Account"). The Payahead
Account shall not be property of the Trust.
(ii) The Servicer shall on or prior to each Distribution
Date (and prior to deposits to the Distribution Account) transfer
from the Collection Account to the Payahead Account all Payaheads as
described in Section 5.03 received by the Servicer during the
Collection Period. Notwithstanding the foregoing and the first
sentence of Section 5.02, for so long as the Servicer is permitted
to make monthly remittances to the Collection Account pursuant to
Section 5.02, Payaheads need not be remitted to and deposited in the
Payahead Account but instead may be remitted to and held by the
Servicer. So long as such condition is met, the Servicer shall not
be required to segregate or otherwise hold separate any Payaheads
remitted to the Servicer as aforesaid but shall be required to remit
Payaheads to the Collection Account in accordance with Section
5.06(a).
Section 5.02 Collections. The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by or
on behalf of the Obligors with respect to the Receivables (other than
Purchased Receivables) and all Liquidation Proceeds, both as collected during
the Collection Period. Notwithstanding the foregoing, for so long as (i) USAA
Federal Savings Bank remains the Servicer, (ii) no Event of Default shall have
occurred and be continuing and (iii)(x) USAA Federal Savings Bank maintains a
short-term rating of at least [A-1] by [RATING AGENCY] and [P-1] by [RATING
AGENCY] (and for five Business Days following a reduction in either such
rating) or (y) prior to ceasing daily remittances, the Rating Agency Condition
shall have been satisfied (and any conditions or limitations imposed by the
Rating Agencies in connection therewith are complied with), the Servicer shall
remit such collections with respect to the preceding calendar month to the
Collection Account on the Determination Date immediately preceding the related
Distribution Date. For purposes of this Article V the phrase "payments by or
on behalf of Obligors" shall mean payments made with respect to the
Receivables by Persons other than the Servicer or the Depositor.
Section 5.03 Application of Collections. All collections for the
Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall
be applied first, in the case of Precomputed Receivables, to
reduce Outstanding Precomputed Advances as described in
Section 5.04(a) and, in the case of Simple Interest
Receivables, to reduce Outstanding Simple Interest Advances
to the extent described in Section 5.04(b). Next, any excess
shall be applied, in the case of Precomputed Receivables, to
the Scheduled Payment and, in the case of Simple Interest
Receivables, to interest and principal in accordance with
the Simple Interest Method. With respect to Precomputed
Receivables, any remaining excess shall be added to the
Payahead
24
Balance, and shall be applied to prepay the Precomputed
Receivable, but only if the sum of such excess and the
previous Payahead Balance shall be sufficient to prepay the
Receivable in full. Otherwise, any such remaining excess
payments shall constitute a Payahead and shall increase the
Payahead Balance.
Section 5.04 Advances. (a) As of the close of business on the last
day of each Collection Period, if the payments by or on behalf of the Obligor
on a Precomputed Receivable (other than a Purchased Receivable) shall be less
than the Scheduled Payment, the Payahead Balance shall be applied by the
Servicer to the extent of the shortfall and such Payahead Balance shall be
reduced accordingly. Next, the Servicer shall advance any remaining shortfall
(such amount a "Precomputed Advance"), to the extent that the Servicer, at its
sole discretion, shall determine that the Precomputed Advance shall be
recoverable from the Obligor, the Purchase Amount, Liquidation Proceeds or
proceeds of any other Precomputed Receivables. With respect to each
Precomputed Receivable, the Precomputed Advance shall increase Outstanding
Precomputed Advances. Outstanding Precomputed Advances shall be reduced by
subsequent payments by or on behalf of the Obligor, collections of Liquidation
Proceeds in respect of Precomputed Receivables, or payments of the Purchase
Amount in respect of Precomputed Receivables.
If the Servicer shall determine that an Outstanding Precomputed
Advance with respect to any Precomputed Receivable shall not be recoverable as
aforesaid, the Servicer shall be reimbursed from any collections made on other
Precomputed Receivables in the Trust, and Outstanding Precomputed Advances
with respect to such Precomputed Receivable shall be reduced accordingly.
(b) As of the close of business on the last day of each Collection
Period, the Servicer shall advance an amount equal to the amount of interest
due on the Simple Interest Receivables at their respective APR's for the
related Collection Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received on
the Simple Interest Receivables during the related Collection Period (such
amount, a "Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an amount
equal to the absolute value of such negative number shall be paid to the
Servicer and the amount of Outstanding Simple Interest Advances shall be
reduced by such amount. In addition, in the event that a Simple Interest
Receivable becomes a Liquidated Receivable, Liquidation Proceeds with respect
to such Simple Interest Receivable attributable to accrued and unpaid interest
thereon (but not including interest for the then current Collection Period)
shall be paid to the Servicer to reduce Outstanding Simple Interest Advances,
but only to the extent of any Outstanding Simple Interest Advances. The
Servicer shall not make any advance with respect to principal of Simple
Interest Receivables.
Section 5.05 Additional Deposits. The Servicer shall deposit in the
Collection Account the aggregate Advances pursuant to Section 5.04. To the
extent that the Servicer fails to make a Simple Interest Advance pursuant to
Section 5.04(b) on the date required, the Trustee shall withdraw such amount
(or, if determinable, such portion of such amount as does not represent
advances for delinquent interest) from the Reserve Account and deposit such
amount in the Collection Account. The Servicer and the Depositor shall deposit
or cause to be deposited in
25
the Collection Account the aggregate Purchase Amount with respect to Purchased
Receivables, and the Servicer shall deposit therein all amounts to be paid
under Section 11.02. The Servicer shall deposit the aggregate Purchase Amount
with respect to Purchased Receivables when such obligations are due, unless
the Servicer shall not be required to make daily deposits pursuant to Section
5.02.
Section 5.06 Distributions. (a) On each Distribution Date, the
Trustee shall cause to be transferred:
(i) From the Payahead Account, or from the Servicer in the
event that the second and third sentences of Section 5.01(c)(ii) are
applicable, to the Collection Account, in immediately available
funds, the aggregate previous Payaheads to be applied to Scheduled
Payments for the related Collection Period on, or as prepayments in
full of, Precomputed Receivables or prepayments for the related
Collection Period, pursuant to Sections 5.03 and 5.04, in the
amounts set forth in the Servicer's Certificate delivered on the
related Determination Date. A single, net transfer may be made.
(ii) From the Collection Account to the Distribution
Account, in immediately available funds, the entire amount then on
deposit in the Collection Account; provided, however, that in the
event that the Servicer is required to make deposits to the
Collection Account on a daily basis pursuant to Section 5.02, the
amount of the funds transferred from the Collection Account to the
Distribution Account will include only those funds that were
deposited in the Collection Account for the Collection Period
related to such Distribution Date.
(b) On or prior to each Determination Date, the Servicer shall
calculate the Total Distribution Amount, the Interest Distribution Amount, the
Principal Distribution Amount, the Class [A] Distributable Amount, and the
Class [B] Distributable Amount, and, based on the Total Distribution Amount
and the other amounts to be distributed on the related Distribution Date,
determine the amount distributable to Holders of each class of Certificates.
(c) On each Distribution Date, the Trustee (based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 5.09) shall distribute amounts on deposit in the
Distribution Account and, if applicable, the Reserve Account, in the manner
and priority set forth below:
(i) to the Servicer, from the Interest Distribution
Amount, the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods;
(ii) to the Class [A] Certificateholders:
(A) from the Class [A] Percentage of the Interest
Distribution Amount (as such Interest Distribution Amount has
been reduced by Servicing Fee payments), the sum of the Class
[A] Interest Distributable Amount and the Class [A] Interest
Carryover Shortfall as of the close of the preceding
Distribution Date;
(B) from the Class [A] Percentage of the Principal
Distribution Amount (other than the portion thereof
attributable to Realized Losses), the sum
26
of the Class [A] Principal Distributable Amount and the Class
[A] Principal Carryover Shortfall as of the close of the
preceding Distribution Date;
(iii) to the Class [B] Certificateholders:
(A) from the Class [B] Percentage of the Interest
Distribution Amount (as such Interest Distribution Amount has
been reduced by Servicing Fee payments), the sum of the Class
[B] Interest Distributable Amount and the Class [B] Interest
Carryover Shortfall as of the close of the preceding
Distribution Date; and
(B) from the Class [B] Percentage of the Principal
Distribution Amount, the sum of the Class [B] Principal
Distributable Amount and the Class [B] Principal Carryover
Shortfall as of the close of the preceding Distribution Date.
(d) The rights of the Class [B] Certificateholders to receive
distributions in respect of the Class [B] Certificates shall be and hereby are
subordinated to the rights of the Class [A] Certificateholders to receive
distributions in respect of the Class [A] Certificates and the rights of the
Servicer to receive the Servicing Fee (and any accrued and unpaid Servicing
Fees from prior Collection Periods) in the event of delinquency or defaults on
the Receivables. In addition, the Class [A] Certificateholders and the Class
[B] Certificateholders shall have the respective rights to receive funds from
the Reserve Account in the order of priority set forth below. Such
subordination and withdrawals from the Reserve Account shall be effected as
follows, and all payments shall be effected by applying funds in the following
order:
(i) If the Class [A] Percentage of the Interest
Distribution Amount (as such Interest Distribution Amount has been
reduced by Servicing Fee payments) is less than the sum of the Class
[A] Interest Distributable Amount and any Class [A] Interest
Carryover Shortfall from the preceding Distribution Date, the Class
[A] Certificateholders shall be entitled to receive distributions in
respect of such deficiency first, from the Class [B] Percentage of
the Interest Distribution Amount; second, if such amounts are
insufficient, from amounts on deposit in the Reserve Account; and
third, if such amounts are insufficient, from the Class [B]
Percentage of the Principal Distribution Amount (other than the
portion thereof attributable to Realized Losses).
(ii) If the Class [A] Percentage of the Principal
Distribution Amount (other than the portion thereof attributable to
Realized Losses) is less than the sum of the Class [A] Principal
Distributable Amount and the Class [A] Principal Carryover Shortfall
from the preceding Distribution Date, the Class [A]
Certificateholders shall be entitled to receive distributions in
respect of such deficiency first, from the Class [B] Percentage of
the Principal Distribution Amount (other than the portion thereof
attributable to Realized Losses); second, if such amounts are
insufficient, from amounts on deposit in the Reserve Account; and
third, if such amounts are insufficient, from the Class [B]
Percentage of the Interest Distribution Amount.
27
(iii) If the Class [B] Percentage of the Interest
Distribution Amount, less the portion thereof, if any, distributed
to the Class [A] Certificateholders pursuant to clause (i) above, is
less than the Class [B] Interest Distributable Amount, the Class [B]
Certificateholders shall be entitled to receive such deficiency from
amounts on deposit in the Reserve Account (after giving effect to
any withdrawals therefrom pursuant to clauses (i) and (ii) above).
(iv) If the Class [B] Percentage of the Principal
Distribution Amount (other than the portion thereof attributable to
Realized Losses), less the portion thereof, if any, distributed to
the Class [A] Certificateholders pursuant to clause (ii) above, is
less than the Class [B] Principal Distributable Amount, the Class
[B] Certificateholders shall be entitled to receive such deficiency
from amounts on deposit in the Reserve Account (after giving effect
to any withdrawals therefrom pursuant to clauses (i), (ii) and (iii)
above).
(e) On each Distribution Date, the Trustee shall distribute any
amounts remaining in the Distribution Account after making the distributions
described in Sections 5.06(c) and (d) above in the following amounts and in
the following order of priority: (i) into the Reserve Account until the amount
on deposit therein equals the Specified Reserve Account Balance and (ii) to
the Depositor.
(f) Subject to Section 11.01 respecting the final payment upon
retirement of each Certificate, the Servicer shall on each Distribution Date
instruct the Trustee to distribute to each Certificateholder of record on the
preceding Record Date either by wire transfer in immediately available funds
to the account of such Holder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided to the
Servicer appropriate instructions prior to such Distribution Date and such
Holder's Certificates of either Class in the aggregate evidence a denomination
of not less than $1,000,000, or, if not, by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register, the amounts to be distributed to such Certificateholder pursuant to
such Holder's Certificates.
Section 5.07 Reserve Account. (a) In order to effectuate the
subordination provided for herein and to assure that sufficient amounts to
make required distributions to Certificateholders will be available, the
Servicer shall establish and maintain an Eligible Deposit Account (the
"Reserve Account"), bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Certificateholders.
The Reserve Account will include the money and other property deposited and
held therein pursuant to Section 5.06(e), 5.08(a) and this Section.
On or prior to the Closing Date, the Seller shall deposit an amount
equal to the Reserve Account Initial Deposit into the Reserve Account. The
Reserve Account and the Reserve Account Property shall not be part of the
Trust, but instead will be held by the Trustee, as collateral agent, for the
benefit of the Holders of the Certificates. The Seller hereby acknowledges
that the Reserve Account Initial Deposit (and any investment earnings thereon)
is owned directly by it, and the Seller hereby agrees to treat the same as its
assets (and earnings) for federal income tax and all other purposes.
28
(b) In order to give effect to the subordination provided for herein
and to assure the availability of the amounts maintained in the Reserve
Account, the Seller hereby sells, conveys and transfers to the Trustee, as
collateral agent, and its successors and assigns, the Reserve Account Initial
Deposit and all proceeds thereof and hereby pledges to the Trustee as
collateral agent, and its successors and assigns, all other amounts deposited
in or credited to the Reserve Account from time to time under this Agreement,
all Eligible Investments made with amounts on deposit therein, all earnings
and distributions thereon and proceeds thereof (other than proceeds
constituting net investment earnings attributable to the Reserve Account
Property) subject, however, to the limitations set forth below, and solely for
the purpose of securing and providing for payment of the Class [A]
Distributable Amount and the Class [B] Distributable Amount in accordance with
Section 5.06 and this Section (all the foregoing, subject to the limitations
set forth below, the "Reserve Account Property"), to have and to hold all the
aforesaid property, rights and privileges unto the Trustee, its successors and
assigns, in trust for the uses and purposes, and subject to the terms and
provisions, set forth in this Section. The Trustee hereby acknowledges such
transfer and accepts the trusts hereunder and shall hold and distribute the
Reserve Account Property in accordance with the terms and provisions of this
Section.
(c) Consistent with the limited purposes for which such trust is
granted, the amounts on deposit in the Reserve Account on each Distribution
Date shall be available for distribution as provided in Section 5.06, in
accordance with and subject to the following: if the amount on deposit in the
Reserve Account (after giving effect to all deposits thereto and withdrawals
therefrom on such Distribution Date) is greater than the Specified Reserve
Account Balance, the Trustee shall release and distribute all such amounts to
the Seller. Upon any such distribution to the Seller, the Certificateholders
will have no further rights in, or claims to, such amounts.
(d) Funds on deposit in the Reserve Account shall be invested by the
Trustee, as collateral agent, in Eligible Investments selected in writing by
the Seller or an investment manager selected by the Servicer, which investment
manager shall have agreed to comply with the terms of this Agreement as they
relate to investing such funds; provided, however, that it is understood and
agreed that the Trustee shall not be liable for any loss arising from such
investment in Eligible Investments. Other than as permitted by the Rating
Agencies, funds on deposit in the Reserve Account shall be invested in
Eligible Investments that will mature (A) not later than the Business Day
immediately preceding the next Distribution Date or (B) on such next
Distribution Date if either (x) such investment is held in the corporate trust
department of the institution with which the Reserve Account is then
maintained and is invested in a time deposit of (the Trustee) rated at least
[A-1] by [RATING AGENCY] and [P-1] by [RATING AGENCY] (such account being
maintained within the corporate trust department of the Trustee) or (y) the
Trustee (so long as the short-term unsecured debt obligations of the Trustee
are either (1) rated at least [P-1] by [RATING AGENCY] and [A-1] by [RATING
AGENCY] on the date such investment is made or (2) guaranteed by an entity
whose short-term unsecured debt obligations are rated at least [P-1] by
[RATING AGENCY] and [A-1] by [RATING AGENCY] on the date such investment is
made) has agreed to advance funds on such Distribution Date to the
Distribution Account in the amount payable on such investment on such
Distribution Date pending receipt thereof to the extent necessary to make
distributions on such Distribution Date. The guarantee referred to in clause
(y) of the preceding sentence shall be subject to the Rating
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Agency Condition. For the purpose of the foregoing, unless the Trustee
affirmatively agrees in writing to make such advance with respect to such
investment prior to the time an investment is made, it shall not be deemed to
have agreed to make such advance. Funds deposited in the Reserve Account upon
the maturity of any Eligible Investments on the day immediately preceding a
Distribution Date are not required to be invested overnight. If, at any time,
the Reserve Account ceases to be an Eligible Deposit Account, the Trustee as
collateral agent (or the Servicer on its behalf) shall within 10 Business Days
(or such longer period, not to exceed 30 calendar days, as to which each
Rating Agency may consent) establish a new Reserve Account as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such new
account.
Investment earnings attributable to the Reserve Account Property
shall not be available to satisfy the subordination provisions of this
Agreement and shall not otherwise be subject to any claims or rights of the
Certificateholders or the Servicer. All such investments shall be made in the
name of the Trustee or its nominee, as collateral agent, and all net income
and gain realized thereon shall be solely for the benefit of the Seller and
shall be payable by the Trustee to the Seller on each Distribution Date.
Realized losses, if any, on investments of the Reserve Account Property shall
be charged first against undistributed investment earnings attributable to the
Reserve Account Property and then against the Reserve Account Property.
(e) With respect to the Reserve Account Property, the Seller, on
behalf of itself, its successors and assigns, and the Trustee agree that:
(i) Any Reserve Account Property that is held in deposit
accounts shall be held solely in the name of the Trustee, as
collateral agent, at an Eligible Institution. Each such deposit
account shall be subject to the exclusive custody and control of the
Trustee, and the Trustee shall have sole signature authority with
respect thereto.
(ii) Any Reserve Account Property that constitutes
Physical Property shall be delivered to the Trustee, as collateral
agent, in accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or disposition,
solely by the Trustee, as collateral agent, or a securities
intermediary (as such term is defined in Section 8-102(14) of the
UCC) acting solely for the Trustee, as collateral agent.
(iii) Any Reserve Account Property that is a book-entry
security held through the Federal Reserve System pursuant to federal
book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery" and shall be
maintained by the Trustee, as collateral agent, pending maturity or
disposition, through continued book-entry registration of such
Reserve Account Property as described in such paragraph.
(iv) Any Reserve Account Property that is an
"uncertificated security" under Section 8-102(18) of the UCC and
that is not governed by clause (C) above shall be delivered to the
Trustee, as collateral agent, in accordance with paragraph (c) of
the definition of "Delivery" and shall be maintained by the Trustee,
as collateral agent, pending maturity or disposition, through
continued registration of the Trustee's (or its custodian's or its
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nominee's) ownership of such security, in its capacity as collateral
agent.
Effective upon Delivery of any Reserve Account Property in the form
of Physical Property, book-entry securities or uncertificated securities, the
Trustee shall be deemed to have purchased such Reserve Account Property for
value, in good faith and without notice of any adverse claim thereto.
(f) Each of the Seller and the Servicer agrees to take or cause to
be taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments
(including any UCC financing statements or this Agreement) as may be
determined to be necessary in an Opinion of Counsel to the Seller delivered to
the Trustee in order to perfect the interests created by this Section and
otherwise fully to effectuate the purposes, terms and conditions of this
Section. The Seller shall:
(i) promptly execute, deliver and file any financing
statements, amendments, continuation statements, assignments,
certificates, and other documents with respect to such interests and
perform all such other acts as may be necessary in order to perfect
or to maintain the perfection of the Trustee's security interest;
and
(ii) file the necessary financing statements or amendments
thereto within five days, and promptly notify the Trustee of any
such filing, after the occurrence of any of the following: (1) any
change in its corporate name or any trade name; (2) any change in
the location of its chief executive office or principal place of
business; and (3) any merger or consolidation or other change in its
identity or corporate structure and promptly notify the Trustee of
any such filings.
(g) The Trustee shall not enter into any subordination or
inter-creditor agreement with respect to the Reserve Account Property.
(h) Following the payment in full of the Certificate Balance and of
all other amounts owing or to be distributed under this Agreement to
Certificateholders and the termination of the Trust, any amount remaining on
deposit in the Reserve Account shall be distributed to the Seller.
Section 5.08 Statements to Certificateholders. On each Distribution
Date, the Servicer shall provide to the Trustee for the Trustee to forward to
each Certificateholder of record as of the most recent Record Date, a
statement setting forth at least the following information as to each Class of
Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal
of each class of Certificates;
(ii) the amount of such distribution allocable to interest
of each class of Certificates;
(iii) the Pool Balance as of the close of business on the
last day of the preceding Collection Period;
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(iv) the Class [A] Certificate Balance and Class [B]
Certificate Balance and the Class [A] Pool Factor and Class [B] Pool
Factor after giving effect to all payments reported under clause (i)
above on such date;
(v) the amount of the Servicing Fee paid to the Servicer
with respect to the related Collection Period or Collection Periods,
as the case may be;
(vi) the amount of the Class [A] Principal Carryover
Shortfall and Class [A] Interest Carryover Shortfall and Class [B]
Principal Carryover Shortfall and Class [B] Interest Carryover
Shortfall, as applicable, if any, on such Distribution Date and the
change in the Class [A] Principal Carryover Shortfall and Class [A]
Interest Carryover Shortfall and Class [B] Principal Carryover
Shortfall and Class [B] Interest Carryover Shortfall, as applicable,
from the preceding Distribution Date;
(vii) the amount of aggregate Realized Losses, if any, for
the second preceding Collection Period;
(viii) the aggregate Purchase Amounts for Receivables, if
any, that were repurchased in such period;
(ix) the amount otherwise distributable to the Class [B]
Certificateholders that is distributed to Class [A]
Certificateholders on such Distribution Date;
(x) the balance of the Reserve Account on such
Distribution Date, after giving effect to deposits and withdrawals
made on such Distribution Date;
(xi) the aggregate Payahead Balance and the change in such
balance from the preceding Distribution Date;
(xii) for Distribution Dates during the Funding Period (if
any), the remaining Pre-Funded Amount; and
(xiii) for the first Distribution Date that is on or
immediately following the end of the Funding Period (if any), the
amount of any remaining Pre-Funded Amount that has not been used to
fund the purchase of Subsequent Receivables and is passed through as
payments of principal of the Certificates.
Each amount set forth pursuant to subclauses (i), (ii), (v) or (vi) above
shall be expressed as a dollar amount per $1,000 of original principal balance
of a Class [A] or Class [B] Certificate, as applicable.
Section 5.09 Tax Returns. The Trustee shall deliver to each Holder
of a Certificate, as may be required by the Code and applicable Treasury
Regulations, such information as may be required to enable each Holder to
prepare its federal and state income tax returns.
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Section 5.10 Net Deposits. As an administrative convenience, unless
the Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables, aggregate
Advances and Purchase Amounts for or with respect to each Collection Period
net of distributions to be made to the Servicer with respect to such
Collection Period. The Servicer, however, will account to the Trustee and to
the Certificateholders as if all deposits, distributions and transfers were
made individually.
ARTICLE VI.
The Certificates
Section 6.01 The Certificates. Unless otherwise specified in this
Agreement, the Certificates shall be issued in fully registered form in
minimum denominations of $1,000. The Certificates shall be executed on behalf
of the Trust by manual or facsimile signature of an authorized officer of the
Trustee. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been
affixed, authorized to sign on behalf of the Trust, shall be validly issued
and entitled to the benefit of this Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices
at the date of authentication and delivery of such Certificates.
A transferee of a Certificate shall become a Certificateholder and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 6.03.
Section 6.02 Authentication of Certificates. The Trustee shall cause
the Certificates to be executed on behalf of the Trust, authenticated and
delivered to or upon the written order of the Depositor, signed by its
chairman of the board, its president, any vice president, secretary, or
assistant treasurer, without further corporate action by the Depositor, in
authorized denominations, pursuant to this Agreement. No Certificate shall
entitle its Holder to any benefit under this Agreement or shall be valid for
any purpose unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A or Exhibit B,
as appropriate, executed by the Trustee by manual signature. Such
authentication shall constitute conclusive evidence that such Certificate
shall have been duly authenticated and delivered hereunder. All Certificates
shall be dated the date of their authentication.
Section 6.03 Registration of Transfer and Exchange of Certificates.
The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 6.08, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. Unless otherwise specified in this Agreement,
the Trustee shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Trustee shall execute, authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates in authorized denominations of a like
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aggregate amount dated the date of authentication by the Trustee. At the
option of a Holder, Certificates may be exchanged for other Certificates of
authorized denominations of a like aggregate amount upon surrender at the
Corporate Trust Office of the Certificates to be exchanged.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer and exchange shall
be cancelled and subsequently disposed of by the Trustee.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
Section 6.04 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b)
there shall be delivered to the Certificate Registrar and the Trustee such
security or indemnity as may be required by them to save each of them
harmless, then in the absence of notice that such Certificate has been
acquired by a bona fide purchaser, the Trustee on behalf of the Trust shall
execute, and the Trustee shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and denomination. In connection with the issuance of
any new Certificate under this Section, the Trustee and the Certificate
Registrar may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 6.05 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 5.06 and for all other purposes whatsoever,
and neither the Trustee nor the Certificate Registrar shall be bound by any
notice to the contrary.
Section 6.06 Access to List of Certificateholders' Names and
Addresses. The Trustee shall furnish or cause to be furnished to the Servicer,
within 15 days after receipt by the Trustee of a request therefor from the
Servicer in writing, a list, in such form as the Servicer may reasonably
require, of the names and addresses of the Certificateholders as of the most
recent Record Date. If three or more Certificateholders, or one or more
Holders of Class [A] Certificates evidencing not less than 25% of the
Certificate Balance apply in writing to the Trustee, and such application
states that the applicants desire to communicate with other Certificateholders
with respect to their rights under this Agreement or under the Certificates
and such application shall be accompanied by a copy of the communication that
such applicants propose to transmit, then the Trustee shall, within five
Business Days after the receipt for such
34
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed to hold neither the Servicer nor
the Trustee accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
Section 6.07 Maintenance of Office or Agency. The Trustee shall
maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustee in respect of the Certificates and this Agreement may be served.
The Trustee initially designates the Corporate Trust Office as specified in
this Agreement as its office for such purposes. The Trustee shall give prompt
written notice to the Servicer and to Certificateholders of any change in the
location of the Certificate Register or any such office or agency.
Section 6.08 Book-Entry Certificates. The Class [A] Certificates
and, if so specified in this Agreement, the Class [B] Certificates may be
issued in the form of one or more typewritten Certificates representing
Book-Entry Certificates, to be delivered by, or on behalf of, the Depositor to
the initial Clearing Agency, which, unless otherwise specified in this
Agreement, shall be The Depository Trust Company. In such case, the
Certificates delivered to the Depository Trust Company shall initially be
registered on the Certificate Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Certificate Owner will receive a
definitive certificate representing such Certificate Owner's interest in the
Certificates, except as provided in Section 6.10. Unless and until definitive,
fully registered Certificates (the "Definitive Certificates") have been issued
to such Certificate Owners pursuant to Section 6.10:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Depositor, the Servicer, the Certificate
Registrar and the Trustee may deal with the Clearing Agency for all
purposes (including the making of distributions on such
Certificates) as the sole Holder of such Certificates and shall have
no obligation to the related Certificate Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the provisions
of this Section shall control;
(iv) the rights of such Certificate Owners shall be
exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Certificate
Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 6.10, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions
of principal and interest on such Certificates to such Clearing
Agency Participants; and
(v) whenever this Agreement requires or permits actions to
be taken based upon instructions or directions of Holders of
Certificates evidencing a specified percentage of the Certificate
Balance, the Clearing Agency shall be deemed to represent
35
such percentage only to the extent that it has received instructions
to such effect from Certificate Owners and/or Clearing Agency
Participants owning or representing, respectively, such required
percentage of the beneficial interest in such Certificates and has
delivered such instructions to the Trustee.
Section 6.09 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 6.10, the Trustee and the Servicer shall give all
such notices and communications specified herein to be given to Certificate
Owners to the Clearing Agency.
Section 6.10 Definitive Certificates. If (i) the Servicer advises
the Trustee in writing that the Clearing Agency is no longer willing or able
to properly discharge its responsibilities under the Depository Agreement and
the Trustee or the Depositor is unable to locate a qualified successor, (ii)
the Depositor at its option advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than a majority of the aggregate outstanding
principal amount of the Book-Entry Certificates advise the Trustee and the
Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of the
Certificate Owners, then the Clearing Agency shall notify all Certificate
Owners and the Trustee of the occurrence of such event and of the availability
of Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the typewritten Certificates representing the
Book-Entry Certificates by the Clearing Agency, accompanied by registration
instructions, the Trustee shall execute and authenticate the Definitive
Certificates in accordance with the instructions of the Clearing Agency. None
of the Depositor, the Certificate Registrar or the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates, the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder. The Definitive
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Trustee, as evidenced by
its execution thereof.
ARTICLE VII.
The Depositor
Section 7.01 Representations of Depositor. The Depositor makes the
following representations on which the Trustee shall be deemed to have relied
in accepting the Receivables in trust and executing and authenticating the
Certificates. The representations speak as of the execution and delivery of
this Agreement and as of the Closing Date, in the case of Initial Receivables
and as of the applicable Subsequent Transfer Date, in the case of Subsequent
Receivables, if any, and shall survive the sale of the Receivables to the
Trustee.
(i) Organization and Good Standing. The Depositor is duly
organized and validly existing as a corporation in good standing
under the laws of the State of Oregon, with power and authority to
own its properties and to conduct its business as
36
such properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, the corporate
power, authority and legal right to acquire and own the Receivables.
(ii) Due Qualification. The Depositor is duly qualified to
do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions
in which the ownership or lease of property or the conduct of its
business shall require such qualifications.
(iii) Power and Authority. The Depositor has the corporate
power and authority to execute and deliver this Agreement and to
carry out its respective terms; the Depositor has full power and
authority to sell and assign the property to be sold and assigned to
and deposited with the Trustee as part of the Trust, and the
Depositor shall have duly authorized such sale and assignment to the
Trustee, as applicable, by all necessary corporate action; and the
execution, delivery and performance of this Agreement and of each
Subsequent Transfer Assignment or Eligible Investment Transfer
Assignment, as applicable, shall have been duly authorized by the
Depositor by all necessary corporate action.
(iv) Binding Obligation. This Agreement, each Subsequent
Transfer Assignment and Eligible Investment Transfer Assignment,
when executed and delivered by the Depositor, shall constitute
legal, valid and binding obligations of the Depositor enforceable in
accordance with their respective terms.
(v) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof and thereof do not conflict with, result in any breach of any
of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or
by which it is bound; or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to
this Agreement); or violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to
the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties.
(vi) No Proceedings. To the Depositor's best knowledge,
there are no proceedings or investigations pending, or threatened,
before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor
or its properties: (i) asserting the invalidity of this Agreement or
the Certificates; (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement; (iii) seeking any determination or
ruling that might materially and adversely affect the performance by
the Depositor of its obligations under, or the validity or
enforceability of, this Agreement or the Certificates, or (iv) that
might adversely affect the federal income tax attributes of the
Certificates.
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Section 7.02 Corporate Existence. During the term of this Agreement,
the Depositor will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement and each other
instrument or agreement necessary or appropriate to the proper administration
of this Agreement and the transactions contemplated hereby and thereby.
Section 7.03 Liabilities of Depositor; Indemnities. The Depositor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under this Agreement.
(i) The Depositor shall indemnify, defend and hold
harmless the Trustee and the Trust from and against any taxes that
may at any time be asserted against the Trustee or the Trust with
respect to the transactions contemplated in this Agreement,
including any sales, gross receipts, general corporation, tangible
personal property, privilege, or license taxes (but, in the case of
the Trust, not including any taxes asserted with respect to, and as
the date of, the sale of the Receivables to the Trust or the
issuance and original sale of the Certificates, or asserted with
respect to ownership of the Receivables, or federal or other income
taxes arising out of the distributions on the Certificates) and
costs and expenses in defending against the same.
(ii) The Depositor shall indemnify, defend and hold
harmless the Trustee and the Certificateholders from and against any
loss, liability or expense incurred by reason of (a) the Depositor's
willful misfeasance, bad faith or negligence in the performance of
its duties under this Agreement, or by reason of reckless disregard
of its obligations and duties under this Agreement, and (b) the
Depositor's or Trust's violation of federal or state securities laws
in connection with the offering and sale of the Certificates.
(iii) The Depositor shall indemnify, defend and hold
harmless the Trustee and its officers, directors, employees and
agents from and against all costs, expenses, losses, claims, damages
and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties in this Agreement
contained, except to the extent that such cost, expense, loss,
claim, damage or liabilities shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment)
of the Trustee.
Indemnification under this Section shall survive the resignation or
removal of the Trustee and the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Depositor shall have made any indemnity payments to the Trustee pursuant to
this Section and the Trustee thereafter shall collect any of such amounts from
others, the Trustee shall promptly repay such amounts to the Depositor,
without interest.
Section 7.04 Merger or Consolidation of, or Assumption of the
Obligations of, Depositor. Any Person (a) into which the Depositor may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Depositor shall be a party or (c) which
38
may succeed to the properties and assets of the Depositor substantially as a
whole, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Depositor under this Agreement,
shall be the successor to the Depositor hereunder without the execution or
filing of any document or any further act by any of the parties to this
Agreement; provided, however, that (i) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.01 shall
have been breached and no Event of Default, and no event which, after notice
or lapse of time, or both, would become an Event of Default shall have
happened and be continuing, (ii) the Depositor shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent, if any, provided
for in this Agreement relating to such transaction have been complied with,
(iii) the Rating Agency Requirement shall have been satisfied with respect to
such transaction and (iv) the Depositor shall have delivered to the Trustee an
Opinion of Counsel stating that, in the opinion of such Counsel, either (A)
all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary fully to preserve and protect
the interest of the Trustee in the Receivables and reciting the details of
such filings or (B) no such action shall be necessary to preserve and protect
such interest. Notwithstanding anything herein to the contrary, the execution
of the foregoing agreement of assumption and compliance with clauses (i),
(ii), (iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
Section 7.05 Limitation on Liability of Depositor and Others. The
Depositor and any director, officer, employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor shall not be under any obligation to
appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement and that in its opinion may involve it
in any expense or liability.
Section 7.06 Depositor May Own Certificates. The Depositor and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates with the same rights as it would have if it were
not the Depositor or an Affiliate thereof, except as otherwise provided
herein.
Section 7.07 No Transfer of Excess Amounts. The Depositor hereby
covenants that, except as otherwise provided in this Agreement, it will not
transfer, pledge or assign to any Person any part of its right to receive any
amounts in excess of the Reserve Account Specified Amount pursuant to Section
5.07(c) and (h) unless it has first delivered to the Trustee and each Rating
Agency an Opinion of Counsel in form and substance satisfactory to the Trustee
stating that such transfer will not (i) adversely affect the status of the
Trust as a grantor trust pursuant to subpart E, part I of subchapter J of the
Code or (ii) cause the Reserve Account to be taxable as a corporation under
the Code. The Depositor shall give written notice to each Rating Agency of any
proposed transfer, pledge or assignment to any Person of all or any part of
its right to receive such excess amounts.
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ARTICLE VIII.
The Servicer
Section 8.01 Representations of Servicer. The Servicer makes the
following representations on which the Trustee shall be deemed to have relied
in accepting the Receivables in trust and executing and authenticating the
Certificates. The representations speak as of the execution and delivery of
this Agreement and as of the Closing Date, in the case of the Initial
Receivables and as of the applicable Subsequent Transfer Date, in the case of
the Subsequent Receivables, if any, and shall survive the sale of the
Receivables to the Trustee.
(a) Organization and Good Standing. The Servicer is a national
federally chartered savings association duly organized and validly existing as
a banking institution under the laws of the United States and continues to
hold a valid certificate to do business as such. The Servicer is duly
authorized to own its properties and transact its business and is in good
standing in each jurisdiction in which the character of the business
transacted by it or any properties owned or leased by it requires such
authorization and in which the failure to be so authorized would have a
material adverse effect on the business, properties, assets, or condition
(financial or other) of the Servicer and its subsidiaries, considered as one
enterprise. The Servicer has, and at all relevant times had, the power,
authority and legal right to acquire, own, and service the Receivables.
(b) Due Qualification. The Servicer has obtained all necessary
licenses and approvals, in all jurisdictions where the failure to do so would
materially and adversely affect the Servicer's ability to acquire, own and
service the Receivables.
(c) Power and Authority. The Servicer has the power and authority to
execute and deliver this Agreement and to carry out their respective terms;
and the execution, delivery and performance of this Agreement has been duly
authorized by the Servicer by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes the legal, valid
and binding obligations of the Servicer enforceable in accordance with their
respective terms.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof and thereof shall
not conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under, the
articles of association or bylaws of the Servicer, or any indenture, agreement
or other instrument to which the Servicer is a party or by which it is bound;
or result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than this Agreement); or violate any law or, to the best of the
Servicer's knowledge, any order, rule or regulation applicable to the Servicer
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Servicer or
its properties.
(f) No Proceedings. To the Servicer's best knowledge, there are no
proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or its
40
properties: (i) asserting the invalidity of this Agreement or the
Certificates, (ii) seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by this Agreement, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement or the Certificates, or (iv) relating to the
Servicer and which might adversely affect the federal income tax attributes of
the Certificates.
(g) No Insolvent Obligors. As of the related Cutoff Date, no Obligor
on a Receivable shall be shown on the Receivable Files as the subject of a
bankruptcy proceeding.
Section 8.02 Indemnities of Servicer. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
(a) The Servicer shall defend, indemnify and hold harmless the
Trustee, the Trust, the Certificateholders and the Depositor from and against
any and all costs, expenses, losses, damages, claims, and liabilities, arising
out of or resulting from the use, ownership or operation by the Servicer or
any Affiliate thereof of a Financed Asset.
(b) The Servicer shall indemnify, defend and hold harmless the
Trustee, the Depositor, the Trust and the Certificateholders from and against
any and all costs, expenses, losses, claims, damages, and liabilities to the
extent that such cost, expense, loss, claim, damage, or liability arose out
of, or was imposed upon any such Person through, the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its duties
under this Agreement or by reason of reckless disregard of its obligations and
duties under this Agreement.
For purposes of this Section, in the event of the termination of the
rights and obligations of U.S. Bank (or any successor thereto pursuant to
Section 8.03) as Servicer pursuant to Section 9.01, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Trustee)
pursuant to Section 9.02.
Indemnification under this Section shall survive the resignation or
removal of the Trustee or the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and
the recipient thereafter collects any of such amounts from others, such Person
shall promptly repay such amounts to the Servicer, without interest.
Section 8.03 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to
which the Servicer shall be a party, (c) which may succeed to the properties
and assets of the Servicer substantially as a whole or (d) which may execute
an agreement of assumption to perform every obligation of the Servicer
hereunder shall be the successor to the Servicer under this Agreement without
further act on the part of any of the parties to this Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no
Event of Default and no event which, after notice or lapse of time, or both,
would become an Event of Default shall have happened and be continuing, (ii)
the Servicer shall have
41
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement
of assumption comply with this Section and that all conditions precedent
provided for in this Agreement relating to such transaction have been complied
with, (iii) the Rating Agency Condition shall have been satisfied with respect
to such transaction and (iv) the Servicer shall have delivered to the Trustee
an Opinion of Counsel stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary fully to preserve and protect
the interest of the Trustee in the Receivables and reciting the details of
such filings or (B) no such action shall be necessary to preserve and protect
such interest. Notwithstanding anything herein to the contrary, the execution
of the foregoing agreement of assumption and compliance with clauses (i),
(ii), (iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
Section 8.04 Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Trust or the Certificateholders,
except as provided under this Agreement, for any action taken or for
refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; provided, however, that this provision shall not protect
the Servicer or any such Person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director, officer, employee
or agent of the Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Receivables in accordance
with this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties to this Agreement and the interests
of the Certificateholders under this Agreement.
ARTICLE IX.
Default
Section 9.01 Events of Default. If any one of the following events
("Events of Default") shall occur and be continuing:
(a) Any failure by the Servicer to deliver to the Trustee for
deposit to the Collection Account or the Distribution Account any proceeds or
payment required to be so delivered under the terms of the Certificates and
this Agreement that shall continue unremedied for a period of three Business
Days after written notice of such failure is received by the Servicer from the
Trustee or after discovery of such failure by an officer of the Servicer; or
(b) Failure by the Servicer or the Depositor, as the case may be,
duly to observe or to perform in any material respect any other covenants or
agreements of the Servicer
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or the Depositor (as the case may be) set forth in the Certificates or in this
Agreement, which failure shall (a) materially and adversely affect the rights
of Certificateholders and (b) continue unremedied for a period of 60 days
after the date on which written notice of such failure, requiring the same to
be remedied, shall have been given (1) to the Servicer or the Depositor (as
the case may be) by the Trustee or (2) to the Servicer or the Depositor (as
the case may be) and to the Trustee by the Holders of Class [A] Certificates
evidencing not less than 25% of the Class [A] Certificate Balance; or
(c) The occurrence of an Insolvency Event with respect to the
Servicer or the Depositor;
then, and in each and every case, so long as the Event of Default shall not
have been remedied, either the Trustee or the Holders of Class [A]
Certificates evidencing not less than 25% of the Class [A] Certificate
Balance, by notice then given in writing to the Servicer (and to the Trustee
if given by Certificateholders) may terminate all of the rights and
obligations (other than the obligations set forth in Section 8.02) of the
Servicer under this Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Certificates or the Receivables or otherwise,
shall, without further action, pass to and be vested in the Trustee or such
successor Servicer as may be appointed under Section 9.02; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer and the
Trustee in effecting the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the predecessor Servicer for deposit, or shall thereafter
be received with respect to any Receivable. All reasonable costs and expenses
(including attorneys' fees) incurred in connection with transferring the
Receivable Files to the successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section shall be paid by
the predecessor Servicer upon presentation of reasonable documentation of such
costs and expenses. Upon receipt of notice of the occurrence of an Event of
Default, the Trustee shall give notice thereof to the Rating Agencies.
Section 9.02 Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 9.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation,
until the later of (x) the date 45 days from the delivery to the Trustee of
written notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (y) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in
the notice of resignation and accompanying Opinion of Counsel. In the event of
the Servicer's termination hereunder, the Trustee shall appoint a successor
Servicer, and the successor Servicer shall accept its appointment by a written
assumption in form acceptable to the Trustee. In the event that a successor
Servicer has not
43
been appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Trustee without further action
shall automatically be appointed the successor Servicer and shall be entitled
to the Servicing Fee. Notwithstanding the above, the Trustee shall, if it
shall be legally unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, any established institution having a net worth of not
less than $100,000,000 and whose regular business shall include the servicing
of [new and used automobiles, light-duty trucks, motorcycles, recreational
vehicles, vans, minivans and/or sport utility vehicles] receivables as the
successor to the Servicer under this Agreement.
(b) Upon appointment, the successor Servicer (including the Trustee
acting as successor Servicer) shall be the successor in all respects to the
predecessor Servicer and shall be subject to all the responsibilities, duties
and liabilities arising thereafter relating thereto placed on the predecessor
Servicer and shall be entitled to the Servicing Fee and all of the rights
granted to the predecessor Servicer by the terms and provisions of this
Agreement.
(c) The Servicer may not resign unless it is prohibited from serving
as such by law.
Section 9.03 Repayment of Advances. If the Servicer shall change,
the predecessor Servicer shall be entitled to receive reimbursement for
Outstanding Advances pursuant to Sections 5.03 and 5.04 with respect to all
Advances made by the predecessor Servicer.
Section 9.04 Notification to Certificateholders. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to
this Article XVIII, the Trustee shall give prompt written notice thereof to
Certificateholders and to the Rating Agencies.
Section 9.05 Waiver of Past Defaults. The Holders of Class [A]
Certificates evidencing not less than a majority of the Class [A] Certificate
Balance may, on behalf of all Holders of Certificates, waive any default by
the Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
from the Trust Accounts in accordance with this Agreement. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
ARTICLE X.
The Trustee
Section 10.01 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Agreement and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs; provided, however,
that if the Trustee shall assume the duties of the Servicer pursuant to
Section 9.02, the Trustee in performing such duties shall use the degree of
skill and attention customarily exercised by a servicer with respect to
automobile receivables that it services for itself or others.
44
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement and no
implied covenants or obligations shall be read into this Agreement
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Agreement; provided, however, that the Trustee shall examine
the certificates and opinions to determine whether or not they
conform to the requirements of this Agreement.
(c) The Trustee shall take and maintain custody of the Schedule of
Receivables included as an exhibit to this Agreement and shall retain all
Servicer's Certificates identifying Receivables that become Purchased
Receivables and Liquidated Receivables.
(d) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken in good faith in accordance with this
Agreement or at the direction of the Holders of Class [A] Certificates
evidencing not less than 25% of the Class [A] Certificate Balance relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Agreement;
(e) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of clause (d)
of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trustee Officer unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to this Agreement.
(f) No provision of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
Section 10.02 Certain Matters Affecting Trustee. Except as otherwise
provided in Section 10.01:
45
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in any such document.
(b) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters or relating to this Agreement or the
Certificates shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it under this
Agreement in good faith and in accordance with such advice or opinion of such
counsel.
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement at the request, order or direction
of any of the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that may be
incurred therein or thereby.
(d) The Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith which it believes to be authorized or within
its rights or powers conferred upon it by this Agreement; provided, that such
conduct does not constitute willful misconduct, bad faith or negligence on the
part of the Trustee.
(e) The Trustee may execute any of the trusts or powers or perform
any duties hereunder either directly or by or through agents or attorneys or a
custodian, and the Trustee shall not be responsible for any misconduct or
negligence of any such agent, attorney or custodian appointed with due care by
it hereunder.
Section 10.03 Trustee Not Liable for Certificates or Receivables.
The recitals contained herein and in the Certificates (other than the
certificate of authentication on the Certificates) shall be taken as the
statements of the Depositor or the Servicer, as the case may be, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee
shall make no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than the certificate of authentication
on the Certificates), or of any Receivable or related document. The Trustee
shall at no time have any responsibility or liability for or with respect to
the legality, validity and enforceability of any Receivable, or the perfection
and priority of any security interest created by any Receivable in any
Financed Asset or the maintenance of any such perfection and priority, or for
or with respect to the efficacy of the Trust or its ability to generate the
payments to be distributed to Certificateholders under this Agreement,
including, without limitation: the existence, condition and ownership of any
Financed Asset; the existence and enforceability of any insurance thereon; the
existence and contents of any Receivable or any computer or other record
thereof; the validity of the assignment of any Receivable to the Trust or of
any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Depositor
or the Servicer with any warranty or representation made under this Agreement
or in any related document and the accuracy of any such warranty or
representation or any action of the Servicer taken in the name of the Trustee.
46
Section 10.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Certificates and may deal with the Depositor and the Servicer in banking
transactions with the same rights as it would have if it were not Trustee.
Section 10.05 Trustee's Fees and Expenses. The Servicer shall pay to
the Trustee, and the Trustee shall be entitled to receive, reasonable
compensation as shall have been separately agreed upon before the date of this
Agreement between the Seller and the Trustee (which shall not be limited by
any provision of law regarding the compensation of a trustee of an express
trust) for all services rendered by it in the execution of the trusts created
by this Agreement and in the exercise and performance of any of the Trustee's
powers and duties under this Agreement. The Trustee shall be entitled to be
reimbursed by the Seller for its reasonable expenses under this Agreement,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Trustee may employ in
connection with the exercise and performance of its rights and duties under
this Agreement.
Section 10.06 Eligibility Requirements for Trustee. The Trustee
shall at all times be a corporation having an office in the same state as the
location of the Corporate Trust Office; organized and doing business under the
laws of such state or the United States of America; authorized under such laws
to exercise corporate trust powers; having a combined capital and surplus of
at least $50,000,000 and subject to supervision or examination by federal or
state authorities; and having (or having a parent that has) a rating of at
least [Baa3] by [RATING AGENCY]. If such corporation shall publish reports of
condition at least annually pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section
10.07.
Section 10.07 Resignation or Removal of Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a successor Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee. If
no successor Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 10.06 and shall fail to resign after written
request therefor by the Servicer, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Servicer may remove the Trustee. If the Servicer shall remove the Trustee
under the authority of the immediately preceding sentence, the Servicer shall
promptly appoint a successor Trustee by written instrument, in duplicate, one
copy
47
of which instrument shall be delivered to the outgoing Trustee so removed and
one copy to the successor Trustee, and shall pay all fees owed to the outgoing
Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to Section 10.08 and payment of all fees and expenses owed to the
outgoing Trustee. The Servicer shall provide notice of such resignation or
removal of the Trustee to each of the Rating Agencies.
Section 10.08 Successor Trustee. Any successor Trustee appointed
pursuant to Section 10.07 shall execute, acknowledge and deliver to the
Servicer and to its predecessor Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor under this
Agreement, with like effect as if originally named as Trustee. The predecessor
Trustee shall upon payment of its fees and expenses deliver to the successor
Trustee all documents and statements and monies held by it under this
Agreement; and the Servicer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
eligible pursuant to Section 10.06.
Upon acceptance of appointment by a successor Trustee pursuant to
this Section, the Servicer shall mail notice thereof to all Certificateholders
and to the Rating Agencies. If the Servicer shall fail to mail such notice
within 10 days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Servicer.
Section 10.09 Merger or Consolidation of Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 10.06, without the execution
or filing of any instrument or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. The Trustee
shall mail notice of any such merger or consolidation to the Rating Agencies
Section 10.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust or any Financed Asset may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such
Person, in such capacity and for the benefit of the
48
Certificateholders, such title to the Trust or any part thereof and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights, and trusts as the Servicer and the Trustee may consider necessary or
desirable. If the Servicer shall not have joined in such appointment within 15
days after the receipt by it of a request so to do, the Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor Trustee pursuant to Section 10.06 and no notice of the appointment
of any co-trustee or separate trustee shall be required pursuant to Section
10.08.
Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations conferred
or imposed upon any such separate trustee or co-trustee shall be
conferred upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee is not authorized to act
separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Trustee shall be
incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) No trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) The Servicer and the Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Each such instrument shall be filed with the
Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
49
Section 10.11 Representations and Warranties of Trustee. The Trustee
shall make the following representations and warranties on which the Depositor
and Certificateholders shall be deemed to rely:
(i) The Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of its place of
incorporation.
(ii) The Trustee has full corporate power, authority and
legal right to execute and deliver, and to perform its obligations
under, this Agreement, and shall have taken all necessary action to
authorize the execution and delivery of, and the performance of its
obligations under, this Agreement.
(iii) This Agreement shall have been duly executed and
delivered by the Trustee.
Section 10.12 No Bankruptcy Petition. The Trustee, by entering into
this Agreement, and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against, or join
any other Person in instituting against, the Depositor or the Trust any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other similar proceedings under any federal or state
bankruptcy or similar law in connection with the Certificates or this
Agreement.
Section 10.13 Trustee's Certificate. On or as soon as practicable
after each Record Date as of which Receivables shall be assigned to the
Depositor or the Servicer pursuant to Section 10.14, the Trustee shall execute
a Trustee's Certificate, based on the information contained in the Servicer's
Certificate for the related Collection Period, amounts deposited to the
Collection Account and notices received pursuant to this Agreement,
identifying the Receivables repurchased by the Depositor pursuant to Section
3.02 or purchased by the Servicer pursuant to Section 4.07 or Section 11.02
during such Collection Period, and shall deliver such Trustee's Certificate,
accompanied by a copy of the Servicer's Certificate for such Collection
Period, to the Depositor or the Servicer, as applicable. The Trustee's
Certificate submitted with respect to such Distribution Date shall operate, as
of such Distribution Date, as an assignment, without recourse, representation
or warranty, to the Depositor or the Servicer, as applicable, of all the
Trustee's right, title and interest in and to any such Repurchased Receivable
and to the other property conveyed to the Trust with respect thereto, and all
security and documents relating thereto, such assignment being an assignment
outright and not for security.
Section 10.14 Trustee's Assignment of Repurchased Receivables. With
respect to all Receivables repurchased by the Depositor pursuant to Section
3.02 or purchased by the Servicer pursuant to Section 4.07 or Section 11.02,
the Trustee shall by a Trustee's Certificate assign, without recourse,
representation or warranty, to the Depositor or the Servicer, as applicable,
all the Trustee's right, title and interest in and to any such Receivable and
the other property conveyed to the Trust with respect thereto, and all
security and documents relating thereto, such assignment being an assignment
outright and not for security.
50
ARTICLE XI.
Termination
Section 11.01 Termination of the Trust. (a) The respective
obligations and responsibilities of the Depositor, the Servicer and the
Trustee created hereby and the Trust created by this Agreement shall terminate
(i) upon the payment to Certificateholders of all amounts required to be paid
to them pursuant to this Agreement and the disposition of all property held as
part of the Trust and (ii) at the time provided in Section 11.02; provided,
however, that in no event shall the trust created by this Agreement continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. James's, living on the date of this Agreement. The Servicer
shall promptly notify the Trustee of any prospective termination pursuant to
this Section.
(b) Except as provided in Section 11.01(a), neither the Depositor
nor any Owner shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which Certificateholders shall surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation of the Certificates, shall be given by the Trustee by letter to
Certificateholders mailed not earlier than the 15th day and not later than the
25th day of the month next preceding the specified Distribution Date stating
(A) the Distribution Date upon which final payment of the Certificates shall
be made upon presentation and surrender of the Certificates at the office of
the Trustee therein designated, (B) the amount of such final payment and (C)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Trustee therein specified. The Trustee shall
give such notice to the Certificate Registrar (if other than the Trustee) at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Trustee shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.06.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within one year after such second notice all of the Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed by the Trustee to the
Depositor.
Section 11.02 Optional Purchase of All Receivables. On the last day
of any Collection Period as of which the Pool Balance shall be less than or
equal to [ ]% of the Original Pool Balance, the Servicer shall have the option
to purchase the corpus of the Trust; provided, however, that the Servicer may
not effect any such purchase if at such time the rating
51
of ____________'s long-term debt obligations is less than [Baa3] by [RATING
AGENCY], unless the Trustee shall have received an Opinion of Counsel to the
effect that such purchase would not constitute a fraudulent conveyance. To
exercise such option, the Servicer shall deposit an amount into the Collection
Account pursuant to Section 5.05 equal to the aggregate Purchase Amount for
the Receivables (including defaulted Receivables), plus the appraised value of
any other property held by the Trust, such value to be determined by an
appraiser mutually agreed upon by the Servicer and the Trustee. The Servicer
thereafter shall succeed to all interests in and to the Trust.
ARTICLE XII.
Miscellaneous Provisions
Section 12.01 Amendment. This Agreement may be amended by the
Depositor, the Servicer and the Trustee, without the consent of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any provision in this Agreement or of
modifying in any manner the rights of the Certificateholders; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Trustee, adversely affect in any material respect the
interests of any Certificateholder.
This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Trustee with the consent of the Holders of
Class [A] Certificates and Class [B] Certificates (which consent shall be
conclusive and binding on such Holders and on all future Holders of such
Certificates and of any Certificates issued upon the transfer therefor or in
exchange thereof or in lieu thereof, whether or not notation of such consent
is made upon the Certificates), each voting as a class, evidencing not less
than a majority of the Class [A] Certificate Balance and Class [B] Certificate
Balance, respectively, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Certificateholders; provided,
however, that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made on any
Certificate or (b) reduce the aforesaid percentage of the Class [A]
Certificate Balance and Class [B] Certificate Balance required to consent to
any such amendment without the consent of the Holders of all Certificates then
outstanding.
Promptly after the execution of any such amendment or consent, the
Trustee shall furnish written notification of the substance of such amendment
or consent to each Certificateholder and the Rating Agencies.
It shall not be necessary for the consent of Certificateholders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement) and of
evidencing the authorization of any action by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
52
Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by
this Agreement and the Opinion of Counsel referred to in this Section 12.01.
The Trustee may, but shall not be obligated to, enter into any such amendment
that affects the Trustee's own rights, duties or immunities under this
Agreement or otherwise.
Section 12.02 Protection of Title to Trust. (a) The Depositor shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Certificateholders and the Trustee in the Receivables and in the proceeds
thereof. The Depositor shall deliver (or cause to be delivered) to the Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Depositor nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC, unless it shall have given the Trustee at least five
days' prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) Each of the Depositor and the Servicer shall have an obligation
to give the Trustee at least 60 days' prior written notice of any relocation
of its principal executive office if, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new
financing statement, and shall promptly file any such amendment or new
financing statement. The Servicer shall at all times maintain its principal
executive office and each office from which it shall service Receivables
within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Distribution
Account and Payahead Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the
Trustee, the Servicer's master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly the interest of
the Trust, in such Receivable, and that such Receivable is owned by the
Trustee. Indication of the Trustee's ownership of a Receivable shall be
deleted from or modified on the Servicer's computer systems when, and only
when, such Receivable shall have been paid in full or repurchased.
(f) If at any time the Depositor or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
automotive receivables to, any
53
prospective purchaser, lender or other transferee, the Servicer shall give to
such prospective purchaser, lender or other transferee computer tapes, records
or print-outs (including any restored from back-up archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate clearly
that such Receivable has been sold and is owned by the Trustee.
(g) The Servicer shall permit the Trustee and its agents at any time
during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Trustee, within
five Business Days, a list of all Receivables (by contract number and name of
Obligor) then held as part of the Trust, together with a reconciliation of
such list to the Schedule of Receivables and to each of the Servicer's
Certificates furnished before such request indicating removal of Receivables
from the Trust.
Section 12.03 Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 12.04 Limitation on Rights of Certificateholders. (a) The
death or incapacity of any Certificateholder shall not operate to terminate
this Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties to this Agreement or any of them.
(b) No Certificateholder shall have any right to vote (except as
provided in Section 12.01 or 9.05) or in any manner otherwise control the
operation and management of the Trust or the obligations of the parties to
this Agreement; nor shall any provision in this Agreement or contained in the
Certificates be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken pursuant to any provision of this Agreement.
(c) No Certificateholder shall have any right to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless: (i) such Holder previously shall have given to the Trustee
written notice of a continuing Event of Default; (ii) the Holders of
Certificates evidencing not less than 25% of the Certificate Balance shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee under this Agreement and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby; (iii) the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity shall have neglected or refused to institute any such action, suit
or proceeding; and (iv) during such 60-day period no request or waiver
inconsistent with such written request shall have been given to the Trustee by
Holders representing a majority of the Certificate Balance. It is understood
and intended that no one or more Holders of Certificates shall have any right
in any manner whatever by virtue of, or by availing of, any provisions of this
Agreement to affect,
54
disturb or prejudice the rights of any other Holders of Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner provided in
this Agreement.
Section 12.05 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES UNDER This Agreement SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.06 Notices. All demands, notices and communications upon
or to the Depositor, the Servicer, the Trustee or the Rating Agencies under
this Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, and shall be deemed to have been
duly given upon receipt (a) in the case of the Depositor, to [ ], [ ],
Attention of [ ], [ ]; (b) in the case of the Servicer, to USAA Federal
Savings Bank, [ ], Attention of [ ], [ ]; (c) in the case of the Trustee, at
the Corporate Trust Office; (d) in the case of [RATING AGENCY], to [RATING
AGENCY], [ADDRESS]; and (e) in the case of [RATING AGENCY], to [RATING AGENCY]
[ADDRESS], Attention: [ ]. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder shall
receive such notice.
Section 12.07 Severability of Provisions. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
Section 12.08 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 7.04 and 8.03 and as provided
in the provisions of this Agreement concerning the resignation of the
Servicer, this Agreement may not be assigned by the Depositor or the Servicer
without the prior written consent of the Trustee and the Holders of
Certificates evidencing not less than 66% of the Certificate Balance.
Section 12.09 Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the
Trust. The interests represented by the Certificates shall be nonassessable
for any losses or expenses of the Trust or for any reason whatsoever.
Section 12.10 Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Depositor, the Servicer, the
Trustee and the Certificateholders, and nothing in this Agreement, whether
express or implied, shall be construed to give any other Person any legal or
equitable right, remedy or claim in respect of the Trust or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
55
Section 12.11 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 12.12 Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, the Servicer and the Depositor shall not, prior
to the date that is one year and one day after the termination of this
Agreement with respect to the Trust, acquiesce to, petition or otherwise
invoke or cause the Trust to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Trust
under any federal or state bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator,
or other similar official of the Trust or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Trust.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer shall not, prior to the date that is one year and one day after the
termination of this Agreement with respect to the Depositor, acquiesce to,
petition or otherwise invoke or cause the Depositor to invoke the process of
any court or government authority for the purpose of commencing or sustaining
a case against the Depositor under any federal or state bankruptcy, insolvency
or similar law, appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or other similar official of the Depositor or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Depositor.
* * *
56
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first
above written.
[ ], as Depositor
By: ___________________________________
Name:
Title:
[TRUSTEE], as Trustee
By: ___________________________________
Name:
Title:
USAA FEDERAL SAVINGS BANK, as Seller and Servicer
By: ___________________________________
Name:
Title:
57
EXHIBIT A
FORM OF CLASS [A] CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CLASS [A]
CERTIFICATE WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS [B] CERTIFICATE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
_______________________________________________________________________________
NUMBER $
_______________________________________________________________________________
R- CUSIP NO.
_______________________________________________________________________________
[ ] TRUST 200_-_
[____]% ASSET BACKED CERTIFICATE, CLASS [A]
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of [retail installment sales contracts,
retail installment loans, purchase money notes or other notes] secured by [new
and used automobiles, light-duty trucks, motorcycles, recreational vehicles,
vans, minivans and/or sport utility vehicles] financed by those contracts.
(This Class [A] Certificate does not represent an interest in or obligation of
USAA Acceptance, LLC, except to the extent described below.)
THIS CERTIFIES THAT _______________________________________ is the
registered owner of [______________________________________] DOLLARS
nonassessable, fully-paid, fractional undivided interest in [ ] (the "Trust")
formed pursuant to the Pooling and Servicing Agreement (the "Agreement") dated
as of USAA Acceptance, LLC, among [ ], a Delaware corporation, as depositor
(the "Depositor"), USAA Federal Savings Bank, as servicer (the "Servicer") and
[Trustee], a [_______] banking corporation, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Agreement.
This Certificate is one of a duly authorized series of Certificates,
designated as the [_____]% Asset Backed Certificates, Class [A] (herein called
the "Class [A] Certificates"), all
A-1
issued under the Agreement, to which Agreement reference is hereby made for a
statement of the respective rights and obligations thereunder of the
Depositor, the Servicer, the Trustee and Holders of the Certificates. The
Class [A] Certificates are subject to all terms of the Agreement.
The property of the Trust includes a pool of [retail installment
sales contracts, retail installment loans, purchase money notes or other
notes] secured by [new and used automobiles, light-duty trucks, motorcycles,
recreational vehicles, vans, minivans and/or sport utility vehicles] (the
"Receivables") financed by those contracts, all monies due under such
Receivables on or after the related Cutoff Date, in the case of Precomputed
Receivables, or received on or after the related Cutoff Date, in the case of
Simple Interest Receivables, security interests in the assets financed
thereby, certain bank accounts and the proceeds thereof, proceeds from claims
on certain insurance policies and all proceeds of the foregoing.
Under the Agreement, there will be distributed on the [______] day
of each month or, if such [______] day is not a Business Day, the next
Business Day (each, a "Distribution Date"), commencing on
[______________________], to the Person in whose name this Class [A]
Certificate is registered at the close of business on the first day of the
month in which such Distribution Date occurs (the "Record Date"), such
Certificateholder's fractional undivided interest in the amount to be
distributed to Class [A] Certificateholders on such Distribution Date.
It is the intent of the Depositor, the Servicer, the Trustee and the
Certificateholders that, for purposes of federal income, state and local
income and single business tax and any other income taxes, the Trust will be
treated as a grantor trust and the Certificates will be treated as interests
in a grantor trust. The Depositor, the Servicer, the Trustee and the
Certificateholders, by acceptance of a Certificate or of a beneficial interest
in a Certificate, as the case may be, agree to treat, and to take no action
inconsistent with the treatment of, the Certificates for such tax purposes as
interests in a grantor trust.
Distributions on this Class [A] Certificate will be made as provided
in the Agreement by the Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class [A] Certificate or the making of any
notation hereon, except that with respect to Class [A] Certificates registered
on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Class [A] Certificate will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Class [A] Certificate at the office or
agency maintained for that purpose by the Trustee in the Borough of Manhattan,
The City of New York.
Reference is hereby made to the further provisions of this Class [A]
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class [A] Certificate shall not entitle the Holder hereof to any benefit under
the Agreement or be valid for any purpose.
A-2
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Class [A] Certificate to be duly
executed.
Date: [ ]
By: [TRUSTEE],
not in its individual capacity but solely
as Trustee,
By:_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [A] Certificates referred to in the within-mentioned
Agreement.
Date:
[TRUSTEE],
as Trustee
By:_________________________________
Authorized Signatory
A-3
(REVERSE OF CLASS [A] CERTIFICATE)
The Class [A] Certificates do not represent an obligation of, or an
interest in, the Depositor, the Servicer, the Trustee or any affiliates of any
of them, and no recourse may be had against such parties or their assets
except as expressly set forth or contemplated herein or in the Agreement. In
addition, this Class [A] Certificate is not guaranteed by any governmental
agency or instrumentality and is limited in right of payment to certain
collections and recoveries with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Agreement. A
copy of the Agreement may be examined by any Certificateholder upon written
request during normal business hours at the principal office of the Depositor
and at such other places, if any, designated by the Depositor.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the Trustee and the rights of the
Certificateholders at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates evidencing not less than a
majority of the Certificate Balance. Any such consent by the Holder of this
Class [A] Certificate shall be conclusive and binding on such Holder and on
all future Holders of this Certificate and of any Class [A] Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof, whether or
not notation of such consent is made upon this Class [A] Certificate. The
Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Class [A] Certificate is registerable
in the Certificate Register upon surrender of this Class [A] Certificate for
registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Trustee in the Borough of Manhattan, The City of
New York, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the Holder
hereof or such Holder's attorney duly authorized in writing, and thereupon one
or more new Class [A] Certificates of authorized denominations evidencing the
same aggregate interest in the Trust will be issued to the designated
transferee. The initial Certificate Registrar appointed under the Agreement is
[________________________________].
Except as provided in the Agreement, the Class [A] Certificates are
issuable only as registered certificates without coupons in a minimum
denomination of $[________]. As provided in the Agreement and subject to
certain limitations therein set forth, Class [A] Certificates are exchangeable
for new Class [A] Certificates of authorized denominations evidencing the same
aggregate denomination, as requested by the Holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange,
but the Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee
or the Certificate Registrar may treat the Person in whose name this Class [A]
Certificate is registered as the owner hereof for all purposes, and none of
the Trustee, the Certificate Registrar or any such agent shall be affected by
any notice to the contrary.
A-4
The obligations and responsibilities created by the
Agreement and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Agreement and the disposition of all property held by the Trust. The Servicer
of the Receivables may at its option purchase the Trust property at a price
specified in the Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Certificates;
however, such right of purchase is exercisable only as of the last day of any
Collection Period as of which the Pool Balance is less than or equal to [__]%
of the Original Pool Balance.
A-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_______________________________________________________________________________
the within Class [A] Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing _________________________ to transfer
said Class [A] Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
____________________________________*
Signature Guaranteed:
____________________________________*/
____________________
* NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within Class [A] Certificate
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by a member firm of the
New York Stock Exchange or a commercial bank or trust company.
A-6
EXHIBIT B
FORM OF CLASS [B] CERTIFICATE
THIS CLASS [B] CERTIFICATE IS SUBORDINATE TO THE PRIOR RIGHTS OF THE CLASS [A]
CERTIFICATES IN ACCORDANCE WITH THE POOLING AND SERVICING AGREEMENT REFERRED
TO BELOW.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT IS
AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1074, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1086, AS AMENDED (THE "CODE"), OR
ANY GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW THAT IS, TO A MATERIAL EXTENT, SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN") OR ANY
PERSON INVESTING THE ASSETS OF A PLAN EXCEPT AS PROVIDED IN THE AGREEMENT
REFERRED TO HEREIN.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CLASS [B]
CERTIFICATE WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS [B] CERTIFICATE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
NUMBER $
_______________________________________________________________________________
_______________________________________________________________________________
R- CUSIP NO.
_______________________________________________________________________________
[ ]
[____]% ASSET BACKED CERTIFICATE, CLASS [B]
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of [retail installment sales contracts,
retail installment loans, purchase money notes or other notes] secured by [new
and used automobiles, light-duty trucks, motorcycles, recreational vehicles,
vans, minivans and/or sport utility vehicles] financed by those contracts.
(This Class [B] Certificate does not represent an interest in or obligation of
[ ], except to the extent described below.)
THIS CERTIFIES THAT ____________________________________ is
the registered owner of [____________________________] DOLLARS nonassessable,
fully-paid, fractional undivided interest in [ ] (the "Trust") formed pursuant
to a Pooling and Servicing Agreement (the "Agreement") dated as of
[_________________], among [ ], a Delaware corporation, as depositor (the
"Depositor"), USAA Federal Savings Bank as servicer (the "Servicer") and
[Trustee], a [Jurisdiction] banking corporation, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth below. To
the extent not
B-1
otherwise defined herein, the capitalized terms used herein have the meanings
assigned to them in the Agreement.
This Certificate is one of a duly authorized series of Certificates,
designated as the [____]% Asset Backed Certificates, Class [B] (herein called
the "Class [B] Certificates") all, issued under the Agreement, to which
Agreement reference is hereby made for a statement of the respective rights
and obligations thereunder of the Depositor, the Servicer, the Trustee and
Holders of the Certificates. The Class [B] Certificates are subject to all
terms of the Agreement.
The property of the Trust includes a pool of [retail installment
sales contracts, retail installment loans, purchase money notes or other
notes] secured by [new and used automobiles, light-duty trucks, motorcycles,
recreational vehicles, vans, minivans and/or sport utility vehicles] (the
"Receivables") financed by those contracts, all monies due under such
Receivables on or after [___________________], in the case of Precomputed
Receivables, or received on or after [__________________], in the case of
Simple Interest Receivables, security interests in the vehicles financed
thereby, certain bank accounts and the proceeds thereof, proceeds from claims
on certain insurance policies and all proceeds of the foregoing.
Under the Agreement, there will be distributed on the [________] day
of each month or, if such [_______] day is not a Business Day, the next
Business Day (each, a "Distribution Date"), commencing on
[______________________], to the Person in whose name this Class [B]
Certificate is registered at the close of business on the first day of the
month in which such Distribution Date occurs (the "Record Date"), subject to
the prior rights of the Class [A] Certificateholders, such Certificateholder's
fractional undivided interest in the amount to be distributed to Class [B]
Certificateholders on such Distribution Date.
It is the intent of the Depositor, the Servicer, the Trustee and the
Certificateholders that, for purposes of federal income, state and local
income and single business tax and any other income taxes, the Trust will be
treated as a grantor trust and the Certificates will be treated as interests
in a grantor trust. The Depositor, the Servicer, the Trustee and the
Certificateholders, by acceptance of a Certificate or of a beneficial interest
in a Certificate, as the case may be, agree to treat, and to take no action
inconsistent with the treatment of, the Certificates for such tax purposes as
interests in a grantor trust.
Distributions on this Class [B] Certificate will be made as provided
in the Agreement by the Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class [B] Certificate or the making of any
notation hereon, except that with respect to Class [B] Certificates registered
on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Class [B] Certificate will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Class [B] Certificate at the office or
agency maintained for that purpose by the Trustee in the Borough of Manhattan,
The City of New York.
B-2
Reference is hereby made to the further provisions of this Class [B]
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class [B] Certificate shall not entitle the Holder hereof to any benefit under
the Agreement or be valid for any purpose.
THIS CLASS [B] CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
B-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Class [B] Certificate to be duly
executed.
Date: [ ]
TRUST 200__-__
By: [TRUSTEE], not in its individual capacity but
solely as Trustee
By:_____________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [B] Certificates referred to in the
within-mentioned Trust Agreement.
Date: [TRUSTEE], as Trustee
By:______________________________________________
Authorized Signatory
B-4
(REVERSE OF CLASS [B] CERTIFICATE)
The Class [B] Certificates do not represent an obligation of, or an
interest in, the Depositor, the Servicer, the Trustee or any affiliates of any
of them, and no recourse may be had against such parties or their assets
except as expressly set forth or contemplated herein or in the Agreement. In
addition, this Class [B] Certificate is not guaranteed by any governmental
agency or instrumentality and is limited in right of payment to certain
collections and recoveries with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Agreement. A
copy of the Agreement may be examined by any Certificateholder upon written
request during normal business hours at the principal office of the Depositor
and at such other places, if any, designated by the Depositor.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing not less than a majority of the Certificate Balance. Any such
consent by the Holder of this Class [B] Certificate shall be conclusive and
binding on such Holder and on all future Holders of this Class [B] Certificate
and of any Class [B] Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent is
made upon this Class [B] Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of any of the Certificates.
Except as provided in the Agreement, the Class [B] Certificates are
issuable only as registered certificates without coupons in a minimum
denominations of $[________]. As provided in the Agreement and subject to
certain limitations therein set forth, Class [B] Certificates are exchangeable
for new Class [B] Certificates of authorized denominations evidencing the same
aggregate denomination, as requested by the Holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange,
but the Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee
or the Certificate Registrar may treat the Person in whose name this Class [B]
Certificate is registered as the owner hereof for all purposes, and none of
the Trustee, the Certificate Registrar or any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Agreement and
the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Agreement and the disposition of all property by the Trust. The Servicer of
the Receivables may at its option purchase the Trust property at a price
specified in the Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Class [B]
Certificates; however, such right of purchase is exercisable only as of the
last day of any Collection Period as of which the Pool Balance is less than or
equal to [ ]% of the Original Pool Balance.
B-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
__________________________________________________________________
(Please print or type name and address, including postal zip
code, of assignee)
__________________________________________________________________
the within Class [B] Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing ________________________ to transfer
said Class [B] Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
______________________________________*
Signature Guaranteed:
____________________________*/
-----------------------
* NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within Class [B] Certificate
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by a member firm of the
New York Stock Exchange or a commercial bank or trust company.
B-6
EXHIBIT C
(FORM OF DEPOSITORY AGREEMENT)
Letter of Representations
(To be Completed by Issuer and Trustee)
(Name of Issuer)
(Name of Trustee)
_________________
(Date)
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
00 Xxxxx Xxxxxx; 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Re:_________________________________________
__________________________
(Issue Description)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the "Securities"). Trustee
will act as trustee with respect to the Securities pursuant to a trust
indenture dated __, 200_ (the "Document"). _________________________________
(the "Underwriter") is distributing the Securities through The Depository
Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at
DTC, and to act in accordance with its Rules with respect to the Securities,
Issuer and Trustee make the following representations to DTC:
(1) Prior to closing on the Securities on ________________, 200_,
there shall be deposited with DTC one Security certificate registered in the
name of DTC's nominee, Cede & Co., for each stated maturity of the Securities
in the face amounts set forth on Schedule A hereto, the total of which
represents 100% of the principal amount of such Securities. If, however, the
aggregate principal amount of any maturity exceeds $[ ] million, one
certificate will be issued with respect to each $[ ] million of principal
amount and an additional
C-1
certificate will be issued with respect to any remaining principal amount.
Each $[ ] million certificate shall bear the following legend:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to
Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
(2) In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date for
such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (000) 000-0000 or (000) 000-0000, and
receipt of such notices shall be confirmed by telephoning (000) 000-0000.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to DTC's Reorganization Department as indicated in Paragraph 4.
(3) In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer
or Trustee shall forward such notice either in a separate secure transmission
for each CUSIP number or in a secure transmission for multiple CUSIP numbers
(if applicable) which includes a manifest or list of each CUSIP number
submitted in that transmission. (The party sending such notice shall have a
method to verify subsequently the use of such means and the timeliness of such
notice.) The Publication Date shall be not less than 30 days nor more than 60
days prior to the redemption date or, in the case of an advance refunding, the
date that the proceeds are deposited in escrow. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Call Notification Department
at (000) 000-0000 or (000) 000-0000. If the party sending the notice does not
receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (000) 000-0000. Notices to DTC pursuant
to this Paragraph by mail or by any other means shall be sent to:
Manager; Call Notification Department
The Depository Trust Company
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
C-2
(4) In the event of an invitation to tender the Securities, notice
by Issuer or Trustee to Security holders specifying the terms of the tender
and the Publication Date of such notice shall be sent to DTC by a secure means
in the manner set forth in the preceding Paragraph. Notices to DTC pursuant to
this Paragraph and notices of other corporate actions (including mandatory
tenders, exchanges, and capital changes) by telecopy shall be sent to DTC's
Reorganization Department at (000) 000-0000 or (000) 000-0000, and receipt of
such notices shall be confirmed by telephoning (000) 000-0000. Notices to DTC
pursuant to the above by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
0 Xxxxxxx Xxxxxx; 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
(5) All notices and payment advices sent to DTC shall contain the
CUSIP number of the Securities.
(6) Trustee shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably 5, but
not less than 2, business days prior to such payment date. Such notices, which
shall also contain the current pool factor and Trustee contact's name and
telephone number, shall be sent by telecopy to DTC's Dividend Department at
(000) 000-0000, or if by mail or by any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx; 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
(7) (NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS OUT
THE OTHER:) (The interest accrual period is record date to record date.) (The
interest accrual period is payment date to payment date.)
(8) Interest payments and principal payments that are part of
periodic principal-and-interest payments shall be received by Cede & Co., as
nominee of DTC, or its registered assigns in same-day funds on each payment
date (or the equivalent in accordance with existing arrangements between
Issuer or Trustee and DTC). Such payments shall be made payable to the order
of Cede & Co. Absent any other existing arrangements, such payments shall be
addressed as follows:
Manager; Cash Receipts
Dividend Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx; 00xx Xxxxx
X-0
Xxx Xxxx, XX 00000-0000
(9) (NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS OUT
THE OTHER:)
Securities Eligible for DTC's Same-Day Funds Settlement ("SDFS")
System. Other principal payments (redemption payments) shall be made in
same-day funds by Trustee in the manner set forth in the SDFS Paying Agent
Operating Procedures, a copy of which previously has been furnished to
Trustee.
Securities Eligible for DTC's Next-Day Funds Settlement ("NDFS")
System. Other principal payments (redemption payments) shall be made in
next-day funds by Trustee to Cede & Co., as nominee of DTC, or its registered
assigns, on each payment date. Such payments shall be made payable to the
order of Cede & Co., and shall be addressed as follows:
NDFS Redemptions Manager
Reorganization/Redemptions Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx; 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
(10) DTC may direct Issuer or Trustee to use any other number or
address as the number or address to which notices or payments of interest or
principal may be sent.
(11) In the event of a redemption, acceleration, or any other
similar transaction (e.g., tender made and accepted in response to Issuer's or
Trustee's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity, in
which case the certificate will be presented to Issuer or Trustee prior to
payment, if required.
(12) In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer or
Trustee shall issue, transfer, and exchange certificates in appropriate
amounts, as required by DTC and others.
(13) DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to Issuer or Trustee (at which time DTC will confirm with Issuer or
Trustee the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
(14) Issuer: (a) understands that DTC has no obligation to, and will
not, communicate to its Participants or to any person having an interest in
the Securities any
C-4
information contained in the Security certificate(s); and (b) acknowledges
that neither DTC's Participants nor any person having an interest in the
Securities shall be deemed to have notice of the provisions of the Security
certificates by virtue of submission of such certificate(s) to DTC.
(15) Nothing herein shall be deemed to require Trustee to advance
funds on behalf of Issuer.
Notes: Very truly yours,
A. If there is a Trustee (as (Authorized Officer's Signature)
defined in this Letter of
Representations), Trustee as well as
Issuer must sign this Letter. If
there is no Trustee, in signing this __________________________________
Letter Issuer itself undertakes to (Issuer)
perform all of the obligations set
forth herein.
By:________________________________
(Authorized Officer's Signature)
C-5
B. Schedule B contains
statements that DTC
believes accurately describe ________________________________
DTC, the method (Trustee)
of effecting book-entry
transfers of securities
distributed through DTC,
and certain related matters. By: _______________________________
(Authorized Officer's Signature)
[_______________________________]
(Administrator)
By:________________________________
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:___________________________
cc: Underwriter
Underwriter's Counsel
C-6
SCHEDULE A
(Describe Issue)
CUSIP Principal Amount Maturity Date Interest Rate
_____ ________________ _____________ _____________
C-7
EXHIBIT D
FORM OF SERVICER'S CERTIFICATE
[ ]
[___]% Asset Backed Certificates, Class [A]
[___]% Asset Backed Certificates, Class [B]
Distribution Date:
Collection Period:
Under the Pooling and Servicing Agreement dated as of
[_____________] by and among [ ], as Depositor, USAA Federal Saving Bank, as
Servicer, and [Trustee], as Trustee, the Servicer is required to prepare
certain information each month regarding current distributions to
Certificateholders and the performance of the Trust during the previous month.
The information that is required to be prepared with respect to the
Distribution Date and Collection Period listed above is set forth below.
Certain of the information is presented on the basis of an original principal
amount of $[ ] per Class [A] Certificate or Class [B] Certificate, as
appropriate, and certain other information is presented based upon the
aggregate amounts for the Trust as a whole.
A. Information Regarding the Current Monthly Distribution.
1. Class [A] Certificates.
(a) The aggregate amount of the distribution
................................................................................
(b) The amount of the distribution set forth in
paragraph A.1.(a) above in respect of interest
$[_______________]
(c) The amount of the distribution set forth in
paragraph A.1.(a) above in respect of principal
$[_______________]
(d) The amount of the distribution set forth in
paragraph A.1.(a) above per $[ ] interest
$[_______________]
D-1
(e) The amount of the distribution set forth in
paragraph A.1.(b) above per $[ ] interest
$[_______________]
(f) The amount of the distribution set forth in
paragraph A.1.(c) above per $[ ] interest
$[_______________]
2. Class [B] Certificates.
(a) The aggregate amount of the distribution
.........................................................................
$[_______________]
(b) The amount of the distribution set forth in
paragraph A.2(a) above in respect of interest $[______]
(c) The amount of the distribution set forth in
paragraph A.2(a) above in respect of principal
$[_________________]
(d) The amount of the distribution set forth in
paragraph A.2(a) above per $[ ] interest
$[_________________]
(e) The amount of the distribution set forth in
paragraph A.2(b) above per $[ ] interest
$[_________________]
(f) The amount of the distribution set forth in
paragraph A.2(c) above per $[ ] interest
$[_________________]
D-2
B. Information Regarding the Performance of the Trust.
1. Pool Balance and Certificate Balances.
(a) The Pool Balance close of business on the last
day of the preceding Collection Period $[_______]
(b) The Class [A] Certificate Balance as of the
close of business on the last day of the
preceding Collection Period, after giving
effect to payments allocated to principal
set forth in Paragraph A.1(c) above $[_________]
(c) The Class [B] Certificate Balance as of the
close of business of the last day of the
preceding Collection Period, after giving
effect to payments allocated to principal
set forth in paragraph A.2(c) above $[_________]
(d) The Class [A] Pool Factor and the
Class [B] Pool Factor as of the close
of business on the last day of the
________________________________________________________________________
2. Servicing Fee and Advances.
(a) The aggregate amount of the Servicing
Fee paid to the Servicer with respect
to the preceding Collection Period $[_________]
(b) The amount of such Servicing Fee per
________________________________________________________________________
(c) The amount of any unpaid Servicing Fee $[_________]
(d) The change in the amount of any unpaid
Servicing Fee from the previous
________________________________________________________________________
(e) Aggregate Advances on such
________________________________________________________________________
D-3
3. Payment Shortfalls.
(a) The amount of the Class [A] Interest Carryover
Shortfall after giving effect to the payments
set forth in paragraph A.1(b) above $[_________]
(b) The amount of the Class [A] Principal Carryover
Shortfall after giving effect to the payment
set forth in paragraph A.1(c) above $[_________]
(c) The amount of the Class [B] Interest Carryover
Shortfall after giving effect to the payments
set forth in paragraph A.2(b) above $[_________]
(d) The amount of the Class [B] Principal Carryover
Shortfall after giving effect to the payments
set forth in paragraph A.2(c) above $[_________]
(e) The amount otherwise distributable to
Class [B] Certificateholders that is distributed
________________________________________________________________________
4. Payahead Account.
(a) The aggregate Payahead Balance $[_______]
(b) The change in the Payahead Balance from
________________________________________________________________________
5. Reserve Account.
(a) The Reserve Account balance after
giving effect to distributions made on
________________________________________________________________________
D-4
(b) The change in the Reserve Account
________________________________________________________________________
D-5
SCHEDULE A
SCHEDULE OF RECEIVABLES
D-6
SCHEDULE B
LOCATION OF RECEIVABLE FILES
D-7
