EXHIBIT 99.2
EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
between
USAA FEDERAL SAVINGS BANK
as Seller
and
USAA ACCEPTANCE, LLC
as Depositor
Dated as of July 1, 2004
Table of Contents
Page
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Article I
Interpretation
Section 1.01. Definitions and Usage...........................................................1
Article II
Conveyance of Receivables
Section 2.01. Conveyance of Receivables.......................................................2
Section 2.02. The Closing.....................................................................2
Article III
Representations and Warranties
Section 3.01. Representations and Warranties of the Depositor.................................3
Section 3.02. Representations and Warranties of the Seller....................................4
Article IV
Conditions
Section 4.01. Conditions to Obligation of the Depositor.......................................9
Section 4.02. Conditions to Obligation of the Seller.........................................10
Article V
Covenants of the Seller
Section 5.01. Protection of Right, Title and Interest........................................11
Section 5.02. Other Liens or Interests.......................................................12
Section 5.03. Costs and Expenses.............................................................12
Section 5.04. Hold Harmless..................................................................12
Article VI
Indemnification
Section 6.01. Indemnification................................................................12
Section 6.02. Contribution...................................................................14
Article VII
Miscellaneous Provisions
Section 7.01. Obligations of Seller..........................................................15
Section 7.02. Repurchase Events..............................................................15
Section 7.03. Depositor Assignment of Repurchased Receivables................................15
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Section 7.04. Transfer to the Issuer.........................................................15
Section 7.05. Amendment......................................................................16
Section 7.06. Waivers........................................................................16
Section 7.07. Notices........................................................................16
Section 7.08. Costs and Expenses.............................................................17
Section 7.09. Representations of the Seller and the Depositor................................17
Section 7.10. Confidential Information.......................................................17
Section 7.11. Headings and Cross-References..................................................17
Section 7.12. GOVERNING LAW..................................................................17
Section 7.13. Counterparts...................................................................17
Section 7.14. Third Party Beneficiary........................................................17
Section 7.15. No Proceedings.................................................................17
Exhibit A Matters Addressed in Opinion of Seller's Counsel
Schedule A Schedule of Receivables
Schedule B Location of Receivable Files
Appendix A Definitions and Usage
ii
RECEIVABLES PURCHASE AGREEMENT dated as of July 1, 2004 (as from time to
time amended, supplemented or otherwise modified and in effect, this
"Agreement"), between USAA FEDERAL SAVINGS BANK, a federally chartered savings
association, as seller (in such capacity, together with its permitted
successors and permitted assigns in such capacity, the "Seller") and USAA
ACCEPTANCE, LLC, a Delaware limited liability company, as depositor (together
with its successors and permitted assigns, the "Depositor").
RECITALS
WHEREAS, the Depositor desires to purchase a portfolio of receivables
and related property consisting of motor vehicle installment loan contracts
originated by the Seller in the ordinary course of its business;
WHEREAS, the Seller and the Depositor wish to set forth the terms
pursuant to which such portfolio of receivables and related property are to be
sold by the Seller to the Depositor; and
WHEREAS, the Depositor intends, concurrently with its purchase
hereunder, to convey all of its right, title and interest in and to all of
such portfolio of receivables and related property to USAA Auto Owner Trust
2004-2, a Delaware statutory trust (the "Issuer") pursuant to a Sale and
Servicing Agreement dated as of July 1, 2004 (the "Sale and Servicing
Agreement"), by and among the Issuer, the Depositor, USAA Federal Savings
Bank, as Seller and Servicer, and the Issuer intends to pledge all of its
right, title and interest in and to such portfolio of receivables and related
property to JPMorgan Chase Bank, as Indenture Trustee (the "Indenture
Trustee") pursuant to the Indenture dated as of July 20, 2004 (the
"Indenture"), by and between the Issuer and the Indenture Trustee.
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein,
the parties hereto agree as follows:
Article I
Interpretation
Section 1.01. Definitions and Usage. Except as otherwise specified herein
or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Appendix A hereto, which also contains
rules as to usage that shall be applicable herein.
Article II
Conveyance of Receivables
Section 2.01. Conveyance of Receivables.
(a) In consideration of the Depositor's delivery to or upon the
order of the Seller on the Closing Date of $1,473,857,273.92 (the "Purchase
Price"), the Seller does hereby irrevocably sell, transfer, assign, set over
and otherwise convey to the Depositor, without recourse (subject to the
obligations of the Seller set forth herein) all right, title, and interest of
the Seller, whether now or hereinafter acquired, in and to the Trust Property.
(b) The transfer, assignment and conveyance made hereunder shall not
constitute and is not intended to result in an assumption by the Depositor of
any obligation of the Seller to the Obligors or any other Person in connection
with the Receivables and the other Trust Property or any agreement, document
or instrument related thereto.
(c) The Seller and the Depositor intend that the transfer of assets
by the Seller to the Depositor pursuant to this Agreement be a sale of the
ownership interest in such assets to the Depositor, rather than the mere
granting of a security interest to secure a borrowing. In the event, however,
that such transfer is deemed not to be a sale but to be of a mere security
interest to secure a borrowing, the Seller shall be deemed to have hereby
granted to the Depositor a security interest in all accounts, money, chattel
paper, securities, instruments, documents, deposit accounts, certificates of
deposit, letters of credit, advices of credit, banker's acceptances,
uncertificated securities, general intangibles, contract rights, goods and
other property consisting of, arising from or relating to such Trust Property,
which security interest shall be perfected and of first priority, and this
Agreement shall constitute a security agreement under applicable law. Pursuant
to the Sale and Servicing Agreement and Section 7.04 hereof, the Depositor may
sell, transfer and assign to the Issuer (i) all or any portion of the assets
assigned to the Depositor hereunder, (ii) all or any portion of the
Depositor's rights against the Seller under this Agreement and (iii) all
proceeds thereof. Such assignment may be made by the Depositor with or without
an assignment by the Depositor of its rights under this Agreement, and without
further notice to or acknowledgement from the Seller. The Seller waives, to
the extent permitted under applicable law, all claims, causes of action and
remedies, whether legal or equitable (including any right of setoff), against
the Depositor or any assignee of the Depositor relating to such action by the
Depositor in connection with the transactions contemplated by the Sale and
Servicing Agreement.
Section 2.02. The Closing. The sale and purchase of the Trust Property
shall take place at a closing at the office of Sidley Xxxxxx Xxxxx & Xxxx LLP,
New York, New York on the Closing Date, simultaneously with the closing under
(a) the Sale and Servicing Agreement, (b) the Indenture and (c) the Trust
Agreement.
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Article III
Representations and Warranties
Section 3.01. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants as follows to the Seller and the
Indenture Trustee as of the date hereof and the Transfer Date:
(a) Organization and Good Standing. The Depositor is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware, with all requisite power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted.
(b) Due Qualification. The Depositor is duly qualified to do
business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions where the
failure to do so would materially and adversely affect the Depositor's ability
to acquire the Receivables or the other Trust Property or the validity or
enforceability of the Receivables or the other Trust Property.
(c) Power and Authority. The Depositor has all the limited liability
company power and authority to execute, deliver and perform this Agreement and
the other Basic Documents to which it is a party and to carry out their
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 Issuer,
and the Depositor shall have duly authorized such sale and assignment to the
Issuer by all necessary limited liability company action; and the execution,
delivery and performance of this Agreement and the other Basic Documents to
which the Depositor is a party have been duly authorized by the Depositor by
all necessary limited liability company action.
(d) Binding Obligation. This Agreement and the other Basic Documents
to which the Depositor is a party, when duly executed and delivered by the
other parties hereto and thereto, shall constitute legal, valid and binding
obligations of the Depositor, enforceable against the Depositor in accordance
with their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and
to general principles of equity (whether applied in a proceeding at law or in
equity).
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof 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 or both) a default under,
the limited liability company agreement of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it
is bound, or violate any law, rules or regulation applicable to the Depositor
of any court or federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened against the Depositor
before any court, regulatory body,
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administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties (i) asserting the invalidity
of this Agreement or any other Basic Document to which the Depositor is a
party, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any other Basic Document to which the
Depositor is a party or (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 any
other Basic Document to which the Depositor is a party.
(g) No Consents. The Depositor is not required to obtain the consent
of any other party or any consent, license, approval, registration,
authorization, or declaration of or with any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity, or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
Section 3.02. Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants as follows to the
Depositor and the Indenture Trustee as of the date hereof and as of the
Transfer Date:
(i) Organization and Good Standing. The Seller is a 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, and has the power to own
its assets and to transact the business in which it is currently engaged.
The Seller is duly authorized to transact business and has obtained all
necessary licenses and approvals, 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.
(ii) Power and Authority. The Seller has the power and authority
to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement and the other Basic
Documents to which the Seller is a party, and has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement and the other Basic Documents to which the Seller is a party.
When executed and delivered, this Agreement and the other Basic Documents
to which the Seller is a party will constitute legal, valid and binding
obligations of the Seller enforceable in accordance with their respective
terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies and except as
enforcement of such terms may be limited by receivership, conservatorship
and supervisory powers of bank regulatory agencies generally.
(iii) No Violation. The execution, delivery and performance by
the Seller of this Agreement and the other Basic Documents to which the
Seller is a party will not violate any provision of any existing state,
federal or, to the best knowledge of the Seller, local law or regulation
or any order or decree of any court applicable to the Seller or any
provision of the articles of association or incorporation or the bylaws
of the Seller, or constitute a breach of any mortgage, indenture,
contract or other agreement to
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which the Seller is a party or by which the Seller may be bound or result
in the creation or imposition of any lien upon any of the Seller's
properties pursuant to any such mortgage, indenture, contract or other
agreement (other than this Agreement).
(iv) No Proceedings. There are no proceedings or investigations
pending or, to the Seller's knowledge, threatened against the Seller
before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties (i) asserting the invalidity of this Agreement or any other
Basic Document to which the Seller is a party, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement or any other Basic Document to which the Seller is a party or
(iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its obligations under,
or the validity or enforceability of, this Agreement or any other Basic
Document to which the Seller is a party.
(v) Chief Executive Office. The chief executive office of the
Seller is located at 00000 XxXxxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxx 00000.
(vi) No Consents. The Seller is not required to obtain the
consent of any other party or any consent, license, approval,
registration, authorization, or declaration of or with any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity, or enforceability of this Agreement or any other
Basic Document to which it is a party that has not already been obtained.
(vii) No Notice. The Seller represents and warrants that it
acquired title to the Receivables and the other Trust Property in good
faith, without notice of any adverse claim.
(viii) Bulk Transfer. The Seller represents and warrants that the
transfer, assignment and conveyance of the Receivables and the other
Trust Property by the Seller pursuant to this Agreement are not subject
to the bulk transfer laws or any similar statutory provisions in effect
in any applicable jurisdiction.
(ix) Seller Information. No certificate of an officer, statement
or document furnished in writing or report delivered pursuant to the
terms hereof by the Seller contains any untrue statement of a material
fact or omits to state any material fact necessary to make the
certificate, statement, document or report not misleading.
(x) Ordinary Course. The transactions contemplated by this
Agreement and the other Basic Documents to which the Seller is a party
are in the ordinary course of the Seller's business.
(xi) Solvency. The Seller is not insolvent, nor will the Seller
be made insolvent by the transfer of the Trust Property, nor does the
Seller anticipate any pending insolvency.
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(xii) Legal Compliance. The Seller is not in violation of, and
the execution and delivery by the Seller of this Agreement and the other
Basic Documents to which the Seller is a party and its performance and
compliance with the terms of this Agreement and the other Basic Documents
to which the Seller is a party will not constitute a violation with
respect to, any order or decree of any court or any order or regulation
of any federal, state, municipal or governmental agency having
jurisdiction, which violation would materially and adversely affect the
Seller's condition (financial or otherwise) or operations or any of the
Seller's properties or materially and adversely affect the performance of
any of its duties under the Basic Documents.
(xiii) Creditors. The Seller did not sell the Receivables or the
other Trust Property to the Depositor with any intent to hinder, delay or
defraud any of its creditors.
(b) The Seller makes the following representations and
warranties with respect to the Receivables, on which the Depositor relies in
accepting the Receivables and in transferring the Receivables to the Issuer
under the Sale and Servicing Agreement, and on which the Issuer relies in
pledging the same to the Indenture Trustee. Such representations and
warranties speak as of the execution and delivery of this Agreement and as of
the Transfer Date, but shall survive the sale, transfer and assignment of the
Receivables to the Depositor, the subsequent sale, transfer and assignment of
the Receivables by the Depositor to the Issuer pursuant to the Sale and
Servicing Agreement and the pledge of the Receivables by the Issuer to the
Indenture Trustee pursuant to the Indenture.
(i) Schedule of Receivables. The information set forth in
Schedule A to this Agreement with respect to each Receivable is true and
correct in all material respects, and no selection procedures adverse to
the Securityholders have been used in selecting the Receivables from all
receivables owned by the Seller which meet the selection criteria
specified herein.
(ii) No Sale or Transfer. No Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person other than
the Depositor.
(iii) Good Title. Immediately prior to the transfer and
assignment of the Receivables to the Depositor herein contemplated, the
Seller 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 Depositor, has either (i) good and marketable title to each
Receivable, free and clear of all of all Liens and rights of others, and
the transfer has been perfected under applicable law or (ii) a first
priority perfected security interest in each Receivable.
(iv) Receivable Files. The Receivable Files shall be kept at one
or more of the locations specified in Schedule B hereto.
(v) Characteristics of Receivables. Each Receivable (a) has been
originated for the retail financing of a Financed Vehicle by an Obligor
located in one of the States of the United States or the District of
Columbia; (b) contains customary and
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enforceable provisions such that the rights and remedies of the holder
thereof are adequate for realization against the collateral of the
benefits of the security; and (c) provides for fully amortizing level
scheduled monthly payments (provided that the payment in the last month
in the life of the Receivable may be different from the level scheduled
payment) and for accrual of interest at a fixed rate according to the
simple interest method.
(vi) Compliance with Law. Each Receivable and each sale of the
related Financed Vehicle complied at the time it was originated or made,
and complies on and after the Cut-off Date, in all material respects with
all requirements of applicable federal, state, and local laws, and
regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Federal Trade Commission Act, the Xxxxxxxx-Xxxx
Warranty Act, Federal Reserve Board Regulations B and Z, state
adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and any other consumer credit, equal opportunity, and
disclosure laws applicable to such Receivable and sale.
(vii) Binding Obligation. Each Receivable constitutes the legal,
valid, and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in all material respects in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, liquidation and other similar laws and
equitable principles relating to or affecting the enforcement of
creditors' rights.
(viii) No Government Obligor. No Receivable is due from the
United States of America or any state or from any agency, department,
instrumentality or political subdivision of the United States of America
or any state or local municipality and no Receivable is due from a
business except to the extent that such receivable has a personal
guaranty.
(ix) Security Interest in Financed Vehicle. Immediately prior to
the sale and assignment thereof to the Depositor as herein contemplated,
each Receivable was secured by a validly perfected first priority
security interest in the Financed Vehicle in favor of the Seller as
secured party or all necessary and appropriate action with respect to
such Receivable had been taken to perfect a first priority security
interest in the related Financed Vehicle in favor of the Seller as
secured party, which security interest is assignable and has been so
assigned by the Seller to the Depositor.
(x) Receivables in Force. No Receivable has been satisfied,
subordinated, or rescinded, nor has any Financed Vehicle been released
from the Lien granted by the related Receivable in whole or in part.
(xi) No Waiver. No provision of a Receivable has been waived in
such a manner that such Receivable fails either to meet all of the
representations and warranties made by the Seller herein with respect
thereto pursuant to this Section 3.02.
(xii) No Amendments. No Receivable has been amended except
pursuant to instruments included in the Receivable Files and no such
amendment has
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caused such Receivable either to fail to meet all of the representations
and warranties made by the Seller herein with respect thereto pursuant to
this Section 3.02.
(xiii) No Defenses. As of the Cut-off Date, there are no rights
of rescission, setoff, counterclaim, or defense, and the Seller has no
knowledge of the same being asserted or threatened, with respect to any
Receivable.
(xiv) No Liens. As of the Cut-off Date, the Seller has no
knowledge of any Liens or claims that have been filed, including Liens
for work, labor, materials or unpaid taxes relating to a Financed
Vehicle, that would be Liens prior to, or equal or coordinate with, the
Lien granted by the Receivable.
(xv) No Default. Except for payment defaults continuing for a
period of not more than thirty (30) days as of the Cut-off Date, the
Seller has no knowledge that a default, breach, violation, or event
permitting acceleration under the terms of any Receivable exists; the
Seller has no knowledge that a continuing condition that with notice or
lapse of time would constitute a default, breach, violation, or event
permitting acceleration under the terms of any Receivable exists; and the
Seller has not waived any of the foregoing.
(xvi) Insurance. Each Receivable requires that the Obligor
thereunder obtain comprehensive and collision insurance covering the
Financed Vehicle.
(xvii) Lawful Assignment. No Receivable has been originated in,
or is subject to the laws of, any jurisdiction under which the sale,
transfer, and assignment of such Receivable under this Agreement is
unlawful, void or voidable.
(xviii) All Filings Made. No filings (other than UCC filings
which have been made or will be made at the Closing Date) or other
actions are necessary in any jurisdiction to give the Issuer a first
priority perfected security interest in the Receivables and to give the
Indenture Trustee a first priority perfected security interest in the
Receivables.
(xix) One Original. With respect to any Receivable for which an
original executed copy exists, there is no more than one original
executed copy of such Receivable which, immediately prior to the delivery
thereof to the Servicer, as custodian for the Indenture Trustee, was in
the possession of the Seller.
(xx) Security. Each Receivable is secured by a new or used
automobile or light-duty truck.
(xxi) Maturity of Receivables. Each Receivable has a remaining
maturity, as of the Cut-off Date, of not less than 6 months nor greater
than 72 months and an original maturity of at not less than 10 months and
not more than 72 months. No Receivable has a scheduled maturity later
than July 20, 2010.
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(xxii) Annual Percentage Rate. Each Receivable is a
fully-amortizing fixed rate simple interest contract that provides for
level scheduled monthly payments (except for the last payment, which may
be minimally different from the level payments) over its respective
remaining term, and is not secured by any interest in real estate, and
has not been identified on the computer files of the Seller as relating
to Obligors who have requested a reduction in the periodic finance
charges, as of the Cut-off Date, by application of the Servicemembers
Civil Relief Act.
(xxiii) No Repossessions. Each Receivable is secured by a
Financed Vehicle that, as of the Cut-off Date, has not been repossessed
without reinstatement of such Receivable.
(xxiv) Obligor Not Subject to Bankruptcy Proceedings. Each
Receivable has been entered into by an Obligor who has not been
identified on the computer files of the Seller as being a debtor in any
bankruptcy proceeding as of the Cut-off Date.
(xxv) No Overdue Payments. No Receivable has any payment that is
more than 30 days past due as of the Cut-off Date.
(xxvi) Tangible Chattel Paper. The Receivables constitute
"tangible chattel paper" within the meaning of UCC Section 9-102.
(xxvii) Remaining Principal Balance. Each Receivable had a
remaining principal balance, as of the Cut-off Date, of at least $800.00.
Article IV
Conditions
Section 4.01. Conditions to Obligation of the Depositor. The obligation
of the Depositor to purchase the Receivables is subject to the satisfaction of
the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Seller hereunder shall be true and correct in all material
respects on the Transfer Date with the same effect as if then made, and the
Seller shall have performed all obligations to be performed by it hereunder on
or prior to the Transfer Date.
(b) Computer Files Marked. The Seller shall, at its own expense, on
or prior to the Transfer Date, indicate in its computer files that the
Receivables have been sold to the Depositor pursuant to this Agreement and
deliver to the Depositor the Schedule of Receivables, certified by the
Seller's President, Vice President or Treasurer to be true, correct and
complete.
(c) Documents to be Delivered by the Seller on the Transfer Date:
(i) Evidence of UCC Filing. On or prior to the Closing Date, the
Seller shall record and file, at its own expense, a UCC-1 financing
statement in the State of Texas, naming the Seller as seller, and naming
the Depositor as
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secured party, describing the Receivables and the other assets assigned
to the Depositor pursuant to Section 2.01, meeting the requirements of
the laws of each such jurisdiction and in such manner as is necessary to
perfect the sale, transfer, assignment and conveyance of the Receivables
and such other assets to the Depositor. The Seller shall deliver to the
Depositor a file-stamped copy or other evidence satisfactory to the
Depositor of such filing on or prior to the Transfer Date.
(ii) Opinions of Seller's Counsel. On or prior to the Closing
Date, the Depositor shall have received the opinions of counsel to the
Seller, in form and substance satisfactory to the Depositor, as to the
matters set forth in Exhibit A hereto and such other matters as the
Depositor has heretofore requested or may reasonably request.
(iii) Other Documents. Such other documents as the Depositor may
reasonably request.
(d) Other Transactions. The transactions contemplated by the Sale
and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Transfer Date shall be consummated on such date.
Section 4.02. Conditions to Obligation of the Seller. The
obligation of the Seller to sell the Receivables to the Depositor is subject
to the satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Depositor hereunder shall be true and correct on the
Transfer Date with the same effect as if then made, and the Depositor shall
have performed all obligations to be performed by it hereunder on or prior to
the Transfer Date.
(b) Receivables Purchase Price. On the Transfer Date, the Depositor
shall have delivered to the Seller the purchase price specified in Section
2.01 hereof.
(c) Opinion of Counsel. The Depositor shall have furnished to the
Seller an Opinion of Counsel, dated the Closing Date, to the effect that:
(i) the Depositor has been duly formed and is validly existing
in good standing as a limited liability company under the laws of the
State of Delaware and has all necessary limited liability company power
and authority to execute, deliver and perform its obligations under the
Underwriting Agreement, the Trust Agreement, the Sale and Servicing
Agreement and this Agreement (the "Transaction Documents");
(ii) each of the Transaction Documents have been duly
authorized, executed and delivered by the Depositor;
(iii) Neither the execution, delivery and performance by the
Depositor of the Transaction Documents, nor the consummation by the
Depositor of any of the transactions contemplated thereby, requires the
consent or approval of, the withholding of
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objection on the part of, the giving of notice to, the filing,
registration or qualification with, or the taking of any other action in
respect of, any governmental authority or agency of the State of
Delaware, other than the filing of UCC-1 financing statements relating to
the grant of the security interest in the Receivables and the other Trust
Property by USAA Federal Savings Bank as the sole equity member of the
Depositor, to the Depositor and by the Depositor to the Trust with the
Secretary of State, and the filing of the LLC Certificate and the
Certificate of Trust of the Trust with the Secretary of State; and
(iv) Neither the execution, delivery and performance by the
Depositor of the Transaction Documents, nor the consummation by the
Depositor of the transactions contemplated thereby, violates the amended
and restated limited liability company agreement of the Depositor, dated
as of July 8, 2004, or any law, rule or regulation of the State of
Delaware applicable to the Depositor.
(d) Other Transactions. The transactions contemplated by the Sale
and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Transfer Date shall be consummated on such date.
Article V
Covenants of the Seller
The Seller agrees with the Depositor and the Indenture Trustee as
follows:
Section 5.01. Protection of Right, Title and Interest.
(a) Filings. The Seller shall cause at its own expense all financing
statements and continuation statements and any other necessary documents
covering the right, title and interest of the Seller, the Depositor, the Trust
and the Indenture Trustee, respectively, in and to the Receivables and the
other property included in the Trust Estate to be promptly filed and at all
times to be kept recorded, registered and filed, all in such manner and in
such places as may be required by law fully to preserve and protect the right,
title and interest of the Depositor hereunder, the Trust under the Sale and
Servicing Agreement and the Indenture Trustee under the Indenture in and to
the Receivables and the other property included in the Trust Property. The
Seller shall deliver to the Depositor and the Indenture Trustee file stamped
copies of, or filing receipts for, any document recorded, registered or filed
as provided above, as soon as available following such recordation,
registration or filing. The Depositor shall cooperate fully with the Seller in
connection with the obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of this paragraph.
(b) Name Change. If the Seller makes any change in its name,
identity or corporate structure that would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the applicable provisions of the UCC or any title statute or
if the Seller changes the jurisdiction under whose laws it is formed, the
Seller shall give the Depositor, the Indenture Trustee and the Owner Trustee
written notice
11
thereof at least 45 days prior to such change and shall promptly file such
financing statements or amendments as may be necessary to continue the
perfection of the Depositor's interest in the property conveyed pursuant to
Section 2.01.
Section 5.02. Other Liens or Interests. Except for the conveyances
hereunder and pursuant to the Basic Documents, the Seller shall not sell,
pledge, assign or transfer to any Person, or grant, create, incur, assume, or
suffer to exist any Lien on, or any interest in, to or under the Receivables,
and the Seller shall defend the right, title and interest of the Depositor,
the Trust and the Indenture Trustee in, to and under the Receivables against
all claims of third parties claiming through or under the Seller.
Section 5.03. Costs and Expenses. The Seller agrees to pay all reasonable
costs and disbursements in connection with the perfection, as against all
third parties claiming through or under the Seller, of the Depositor's, the
Issuer's and the Indenture Trustee's right, title and interest in and to the
Receivables and the other property included in the Trust Property.
Section 5.04. Hold Harmless. The Seller shall protect, defend, indemnify
and hold the Depositor, the Issuer and their respective assigns and their
employees, officers, directors and agents harmless from and against all
losses, liabilities, claims and damages of every kind and character, including
any legal or other expenses reasonably incurred, as incurred, resulting from
or relating to or arising out of (i) the inaccuracy, nonfulfillment or breach
of any representation, warranty, covenant or agreement made by the Seller in
this Agreement, (ii) any legal action, including, without limitation, any
counterclaim, that has either been settled by the litigants or has proceeded
to judgment by a court of competent jurisdiction, in either case to the extent
it is based upon alleged facts that, if true, would constitute a breach of any
representation, warranty, covenant or agreement made by the Seller in this
Agreement, (iii) any actions or omissions of the Seller occurring prior to the
Transfer Date with respect to any of the Receivables or Financed Vehicles or
(iv) any failure of a Receivable to be originated in compliance with all
applicable requirements of law. These indemnity obligations shall be in
addition to any obligation that the Seller may otherwise have.
Article VI
Indemnification
Section 6.01. Indemnification.
(a) The Seller agrees to indemnify and hold harmless the Depositor,
each of its respective directors, each officer of the Depositor who signed the
Registration Statement, and each person or entity who controls the Depositor
or any such person, within the meaning of Section 15 of the Securities Act,
against any and all losses, claims, damages or liabilities, joint and several,
to which the Depositor, or any such person or entity may become subject, under
the Securities Act or otherwise, and will reimburse the Depositor, and each
such controlling person for any legal or other expenses reasonably incurred by
the Depositor or such controlling person in connection with investigating or
defending any such loss, claims, damages or liabilities insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are
12
based upon any untrue statement or alleged untrue statement of any material
fact made by the Seller contained in the Prospectus Supplement or any
amendment or supplement to the Prospectus Supplement or the omission or the
alleged omission to state therein a material fact necessary in order to make
the statements in the Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement, in the light of the circumstance under which they
were made, not misleading, but, in each case, only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to the information contained in the Prospectus Supplement under the
captions: "Summary of Terms of the Securities--Composition of the
Receivables"; "Risk Factors"; and "The Receivables Pool"; and in the Base
Prospectus under the caption "The Bank's Portfolio of Motor Vehicle Loans"
(such information, the "Seller Information"). This indemnity agreement will be
in addition to any liability which the Seller may otherwise have to the
Depositor or any Affiliate thereof pursuant to Section 5.04 of this Agreement
or otherwise.
(b) The Depositor agrees to indemnify and hold harmless the Seller
and each Person who controls the Seller within the meaning of Section 15 of
the Securities Act against any and all losses, claims, damages or liabilities,
joint and several, to which the Seller, or any such person or entity may
become subject, under the Securities Act or otherwise, and will reimburse the
Seller and each such controlling Person for any legal or other expenses
reasonably incurred by the Seller or such controlling Person in connection
with investigating or defending any such losses, claims, damages or
liabilities insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of material fact contained in the Registration
Statement or any amendment or supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of any material fact contained in the
Prospectus Supplement or the Prospectus or any amendment or supplement to the
Prospectus Supplement or the Prospectus or the omission or the alleged
omission to state therein a material fact necessary in order to make the
statements in the Prospectus Supplement or the Prospectus or any amendment or
supplement to the Prospectus Supplement, in the light of the circumstances
under which they were made, not misleading, but only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to the information contained in the Prospectus Supplement or the
Prospectus other than the Seller Information. This indemnity agreement will be
in addition to any liability which the Depositor may otherwise have.
(c) Promptly after receipt by any indemnified party under this
Article VI of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Article VI, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article VI except to the extent it has
been materially prejudiced by such failure; provided, further, that the
failure to notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Article VI.
13
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Article VI for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by
the indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
appropriate for such indemnified party to employ separate counsel; or (iii)
the indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party, it being understood,
however, the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to local counsel) at any time for all such indemnified
parties, which firm shall be designated in writing by the Depositor, if the
indemnified parties under this Article VI consist of the Depositor, or by the
Seller, if the indemnified parties under this Article VI consist of the
Seller.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 6.01(a) and (b), shall use its commercially reasonable
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from
all liability arising out of such claim, action, suit or proceeding.
Section 6.02. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in this Article VI is for any reason held to be unenforceable
although applicable in accordance with its terms, the Seller, on the one hand,
and the Depositor, on the other, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Seller and the Depositor in such
proportions as shall be appropriate to reflect the relative benefits
14
received by the Seller on the one hand and the Depositor on the other from the
sale of the Receivables such that the Depositor is responsible for that
portion represented by the underwriting discount set forth on the cover page
of the Prospectus Supplement, and the Seller shall be responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6.02, each Person,
if any, who controls the Depositor within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as the Depositor and
each Person, if any, who controls the Seller within the meaning of Section 15
of the Securities Act shall have the same rights to contribution as the
Seller. Notwithstanding anything in this Section 6.02 to the contrary, the
Depositor shall not be required to contribute an amount in excess of the
amount of the underwriting discount appearing on the cover page of the
Prospectus Supplement.
Article VII
Miscellaneous Provisions
Section 7.01. Obligations of Seller. The obligations of the Seller
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable.
Section 7.02. Repurchase Events. The Seller hereby covenants and
agrees with the Depositor for the benefit of the Depositor, the Indenture
Trustee, the Issuer, the Owner Trustee, the Certificateholders and the
Noteholders that the occurrence of a breach of any of the Seller's
representations and warranties contained in Section 3.02(b) that materially
and adversely affects the interests of the Issuer, the Indenture Trustee, the
Owner Trustee, the Certificateholders or the Noteholders in any Receivable,
without regard to any limitation set forth in such representation or warranty
concerning the knowledge of the Seller as to the facts stated therein, shall
constitute an event obligating the Seller to repurchase the Receivables to
which such failure or breach is applicable (each, a "Repurchase Event"), at
the Purchase Amount, from the Depositor, unless any such failure or breach
shall have been cured by the last day of the first Collection Period
commencing after the discovery or notice thereof by or to the Seller or the
Servicer.
Section 7.03. Depositor Assignment of Repurchased Receivables. With
respect to all Receivables repurchased by the Seller pursuant to this
Agreement, the Depositor shall assign, without recourse, representation or
warranty, to the Seller all of the Depositor's right, title and interest in
and to such Receivables and all security and documents relating thereto.
Section 7.04. Transfer to the Issuer. The Seller acknowledges and
agrees that (1) the Depositor will, pursuant to the Sale and Servicing
Agreement, transfer and assign the Receivables and assign its rights under
this Agreement with respect thereto to the Issuer and, pursuant to the
Indenture, the Issuer will pledge the Receivables to the Indenture Trustee,
and (2) the representations and warranties contained in this Agreement and the
rights of the Depositor under this Agreement, including under Section 7.02,
are intended to benefit the Issuer, the Indenture Trustee, the Noteholders and
the Certificateholder. The Seller hereby consents to such transfers and
assignments and agrees that enforcement of a right or remedy hereunder by
15
the Indenture Trustee, the Owner Trustee or the Issuer shall have the same
force and effect as if the right or remedy had been enforced or executed by
the Depositor.
Section 7.05. Amendment. This Agreement may be amended from time to
time, with prior written notice to the Rating Agencies, but without the
consent of the Noteholders or the Certificateholders, by a written amendment
duly executed and delivered by the Seller and the Depositor, 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
Noteholders or Certificateholders; provided that (i) such amendment shall not,
as evidenced by an Opinion of Counsel or an Officer's Certificate, materially
and adversely affect the interest of any Noteholder or Certificateholder and
(ii) the person requesting the amendment obtains a letter from the Rating
Agencies stating that the amendment would not result in the downgrading or
withdrawal of the ratings then assigned to the Notes and the Certificates.
This Agreement may also be amended by the Seller and the Depositor, with the
prior written notice to the Rating Agencies and the prior written consent of
(a) the Holders of Notes evidencing at least a majority of (i) the Outstanding
principal amount of the Class A-1 Notes, (ii) the Outstanding principal amount
of the Class A-2 Notes, (iiii) the Outstanding principal amount of the Class
A-3 Notes, (iv) the Outstanding principal amount of the Class A-4 Notes and
(b) the Certificateholders of Certificates evidencing at least a majority of
the Certificate Balance (excluding, for purposes of this Section 7.05,
Certificates held by the Seller, the Depositor or any of their respective
Affiliates) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying
in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that no such amendment may (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made for
the benefit of any Noteholders or Certificateholders or (ii) reduce the
aforesaid majority requirement that is required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
Certificates.
Section 7.06. Waivers. No failure or delay on the part of the
Depositor, the Issuer or the Indenture Trustee in exercising any power, right
or remedy under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power, right or remedy preclude any
other or further exercise thereof or the exercise of any other power, right or
remedy.
Section 7.07. Notices. All demands, notices and communications under
this Agreement shall be in writing, personally delivered, faxed and followed
by first class mail, 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 0000 Xxxxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000,
Attention: Vice President, Legal Counsel; (b) in the case of the Servicer,
Administrator and Custodian, to 00000 XxXxxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxx
00000, Attention: Xxxx Broker, Vice President, (c) in the case of the Seller,
00000 XxXxxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxx 00000, Attention: Xxxx Broker,
Vice President; (d) in the case of the Issuer or the Owner Trustee, at the
Corporate Trust Office (as defined in the Trust Agreement); (e) in the case of
Xxxxx'x Investors Service, Inc., at the following address: Xxxxx'x Investors
Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, and (f) in the case of Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc., at the
16
following address: Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Asset Backed Surveillance Department; or, as to each of the
foregoing, at such other address as shall be designated by written notice to
the other parties.
Section 7.08. Costs and Expenses. The Seller shall pay all expenses
incident to the performance of its obligations under this Agreement and the
Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Depositor, in connection with the perfection of the Depositor's, the Issuer's
and the Indenture Trustee's right, title and interest in and to the
Receivables and the enforcement of any obligation of the Seller hereunder as
contemplated by the Basic Documents.
Section 7.09. Representations of the Seller and the Depositor. The
respective agreements, representations, warranties and other statements by the
Seller and the Depositor set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the closing under Section
2.02 and the transfers and assignments referred to in Section 7.04.
Section 7.10. Confidential Information. The Depositor agrees that it
will neither use nor disclose to any Person the names and addresses of the
Obligors or any other personally identifiable information of an Obligor,
except in connection with the enforcement of the Depositor's rights hereunder,
under the Receivables, under the Sale and Servicing Agreement or any other
Basic Document, or as required by any of the foregoing or by law.
Section 7.11. Headings and Cross-References. The various headings in
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in
this Agreement to section names or numbers are to such Sections of this
Agreement.
Section 7.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 7.13. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 7.14. Third Party Beneficiary. The Indenture Trustee is an
express third party beneficiary of this Agreement and shall be entitled to
enforce the provisions of this Agreement as if it were a party hereto.
Section 7.15. No Proceedings. So long as this Agreement is in effect, and
for one year plus one day following its termination, (i) each of the Seller
and the Depositor agrees that it will not file any involuntary petition or
otherwise institute any bankruptcy, reorganization arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or state
bankruptcy law or similar law against the Trust and (ii) the Seller agrees
that it will not file
17
any involuntary petition or otherwise institute any bankruptcy, reorganization
arrangement, insolvency or liquidation proceeding or other proceedings under
any federal or state bankruptcy law or similar law against the Depositor.
18
IN WITNESS WHEREOF, the parties hereto have caused this Receivables
Purchase Agreement to be executed by their respective duly authorized officers
as of the date and year first above written.
USAA FEDERAL SAVINGS BANK, as Seller
By: /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Senior Vice President
USAA ACCEPTANCE, LLC, as Depositor
By: /s/ Xxxxx X. XxXxxxxxx
--------------------------------
Name: Xxxxx X. XxXxxxxxx
Title: Vice President
EXHIBIT A
MATTERS ADDRESSED IN OPINION OF SELLER'S COUNSEL
(a) the enforceability of the Basic Documents (other than the Trust
Agreement and the Note Depository Agreement);
(b) the validity of the security interests created thereby;
(c) the due issuance and enforceability of the Notes;
(d) the qualification of the Indenture under the Trust Indenture Act;
(e) no violations of law;
(f) compliance with applicable federal securities laws;
(g) exemption of the Bank, the Depositor and the Issuer from registration
as an investment company under the Investment Company Act of 1940;
(h) the conformity in all material respects of each of the Basic
Documents to the description thereof contained in the Registration Statement
and the Prospectus;
(i) negative assurances concerning the Prospectus, in each case in form
and substance reasonably satisfactory to the Representatives and their
counsel;
(j) certain matters relating to the transfer of the Receivables by the
Seller to the Depositor, in form and substance reasonably satisfactory to the
Representatives and their counsel;
(k) the Issuer will not be an association (or a publicly traded
partnership) taxable as a corporation for federal income tax purposes; and
(l) the Notes will be characterized as indebtedness for federal income
tax purposes and (iii) the statements set forth in the Prospectus under the
heading "Certain Federal Income Tax Consequences", to the extent that they are
statements of law are true and correct in all material respects, in form and
substance reasonably satisfactory to the Representatives and their counsel.
A-1
SCHEDULE A
Schedule of Receivables
[On file with the Indenture Trustee]
S-A-1
SCHEDULE B
Location of Receivable Files
----------------------------
c/o USAA Federal Savings Bank
00000 XxXxxxxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000
S-B-1
APPENDIX A
Definitions and Usage
(attached to the Sale and Servicing Agreement as Appendix A)
Appendix A-1
