1
EXHIBIT 4.1
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
WFS FINANCIAL AUTO LOANS, INC.,
WFS INVESTMENTS, INC.,
FINANCIAL SECURITY ASSURANCE INC.
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
Dated as of March __, 1998
================================================================================
2
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS
Section 1.01. Capitalized Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.03. Usage of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.04. Section References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.05. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE TWO
ORGANIZATION
Section 2.01. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.02. Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.03. Purposes and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.04. Appointment of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.05. Initial Capital Contribution of Owner Trust Estate . . . . . . . . . . . . . . 7
Section 2.06. Declaration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.07. Title to Trust Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.08. Situs of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.09. Representations and Warranties of the Depositor and the Company . . . . . . . 8
Section 2.10. Federal Income Tax Allocations . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE THREE
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01. Initial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.02. The Trust Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.03. Authentication and Delivery of Trust Certificates . . . . . . . . . . . . . . 12
Section 3.04. Registration of Transfer and Exchange of Trust Certificates . . . . . . . . . 13
Section 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates . . . . . . . . . . . 14
Section 3.06. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.07. Access to List of Certificateholders' Names and Addresses . . . . . . . . . . 14
Section 3.08. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.09. Temporary Trust Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.10. Appointment of Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . 15
(i)
3
Page
----
Section 3.11. Ownership by the Company of Trust Certificates . . . . . . . . . . . . . . . . 16
Section 3.12. Book-Entry Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.13. Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.14. Definitive Trust Certificates . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE FOUR
ACTIONS BY OWNER TRUSTEE
Section 4.01. Prior Notice to Owners with Respect to Certain Matters . . . . . . . . . . . . 19
Section 4.02. Action by Owners with Respect to Certain Matters . . . . . . . . . . . . . . . 19
Section 4.03. Action by Owners with Respect to Bankruptcy . . . . . . . . . . . . . . . . . 20
Section 4.04. Restrictions on Owners' Power . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.05. Majority Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE FIVE
APPLICATION OF TRUST FUNDS;
CERTAIN DUTIES
Section 5.01. Establishment of Trust Account . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.02. Application of Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.03. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.04. No Segregation of Monies; No Interest . . . . . . . . . . . . . . . . . . . . 22
Section 5.05. Accounting and Reports to the Noteholders, Owners,
the Internal Revenue Service and Others . . . . . . . . . . . . . . . 22
Section 5.06. Signature on Returns; Tax Matters Partner . . . . . . . . . . . . . . . . . . 22
ARTICLE SIX
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01. General Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.02. General Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.03. Action Upon Instruction . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.04. No Duties Except as Specified in this Agreement or in Instructions . . . . . . 24
Section 6.05. No Action Except Under Specified Documents or Instructions . . . . . . . . . . 25
Section 6.06. Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(ii)
4
Page
----
ARTICLE SEVEN
CONCERNING THE OWNER TRUSTEE
Section 7.01. Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.02. Furnishing of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.03. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.04. Reliance; Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.05. Not Acting in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.06. Owner Trustee Not Liable for Trust Certificates, Notes or Contracts . . . . . 28
Section 7.07. Owner Trustee May Own Trust Certificates and Notes . . . . . . . . . . . . . . 29
Section 7.08. Pennsylvania Motor Vehicle Sales Finance Act Licenses . . . . . . . . . . . . 29
ARTICLE EIGHT
COMPENSATION OF OWNER TRUSTEE
Section 8.01. Owner Trustee's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . 30
Section 8.02. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 8.03. Payments to the Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE NINE
TERMINATION OF TRUST AGREEMENT
Section 9.01. Termination of Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE TEN
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.01. Eligibility Requirements for Owner Trustee . . . . . . . . . . . . . . . . . 33
Section 10.02. Resignation or Removal of Owner Trustee . . . . . . . . . . . . . . . . . . . 33
Section 10.03. Successor Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 10.04. Merger or Consolidation of Owner Trustee . . . . . . . . . . . . . . . . . . 34
Section 10.05. Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . . . . . . 34
(iii)
5
Page
----
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 11.02. No Legal Title to Trust Estate in Owners . . . . . . . . . . . . . . . . . . . 38
Section 11.03. Limitations on Rights of Others . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.05. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.06. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.07. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.08. No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.09. No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.10. Certificates Nonassessable and Fully Paid . . . . . . . . . . . . . . . . . . . 40
Section 11.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.13. Depositor Payment Obligation . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.14. Insurer Default or Insolvency . . . . . . . . . . . . . . . . . . . . . . . . . 40
EXHIBITS
Exhibit A - Form of Certificate Depository Agreement . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Certificate of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
Exhibit C - Form of Trust Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
(iv)
6
This AMENDED AND RESTATED TRUST AGREEMENT, dated as of March __, 1998,
is among WFS FINANCIAL AUTO LOANS, INC., a California corporation (the
"Depositor"), WFS INVESTMENTS, INC., a California corporation (the "Company"),
FINANCIAL SECURITY ASSURANCE INC., a New York corporation ("Financial
Security"), and CHASE MANHATTAN BANK DELAWARE, a Delaware corporation, as owner
trustee (the "Owner Trustee").
WHEREAS, in connection herewith, the Depositor is willing to assume
certain obligations pursuant hereto;
WHEREAS, in connection herewith, the Company is willing to purchase
the Company Trust Certificate (as defined herein) to be issued pursuant hereto
and to assume certain obligations pursuant hereto; and
WHEREAS, Financial Security is willing to issue a financial guaranty
insurance policy in respect of certain payments made on the Trust Certificates
to be issued pursuant hereto;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. Capitalized Terms. Except as otherwise provided in
this Agreement, whenever used in this Agreement the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
"Administration Agreement" means the administration agreement, dated
as of March 1, 1998, among the Trust, the Company, the Depositor, the Indenture
Trustee and WFS, as administrator.
"Agreement" means this Trust Agreement, as the same may be amended and
supplemented from time to time.
"Applicants" shall have the meaning assigned to such term in Section
3.07.
"Benefit Plan" means (i) an employee benefit plan (as such term is
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity.
"Book-Entry Trust Certificate" means a beneficial interest in the
Trust Certificates, the ownership of which shall be evidenced, and transfers of
which shall be made, through book entries by a Clearing Agency as described in
Section 3.12.
7
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as the same may be amended from time
to time.
"Certificate Depository Agreement" means the agreement dated March __,
1998, among the Trust, the Owner Trustee and DTC, as the initial Clearing
Agency, substantially in the form attached as Exhibit A hereto, relating to all
Trust Certificates other than the Company Trust Certificate, as the same may be
amended and supplemented from time to time.
"Certificate Distribution Account" means the account established and
maintained as such pursuant to Section 5.01.
"Certificate of Trust" means the Certificate of Trust filed for the
Trust pursuant to Section 3810(a) of the Business Trust Statute, substantially
in the form of Exhibit B hereto.
"Certificate Owner" means, with respect to a Book-Entry Trust
Certificate, the Person who is the owner of such Book-Entry Trust 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 or as an indirect
participant, in either case in accordance with the rules of such Clearing
Agency) and shall mean, with respect to a Definitive Trust Certificate, the
related Certificateholder.
"Certificate Register" and "Certificate Registrar" mean the register
maintained and the registrar (or any successor thereto) appointed pursuant to
Section 3.04.
"Certificateholder" or "Holder" means the Person in whose name a Trust
Certificate is registered in the Certificate Register, except that, solely for
the purposes of giving any consent, waiver, request or demand pursuant to this
Agreement or the other Basic Documents, the interest evidenced by any Trust
Certificate registered in the name of the Depositor, the Company, WFS or any of
their respective Affiliates shall not be taken into account in determining
whether the requisite percentage necessary to effect such consent, waiver,
request or demand in respect of the Trust Certificates shall have been
obtained.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"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 March __, 1998.
"Code" means the Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.
2
8
"Company" means WFS Investments, Inc., a California corporation, in
its capacity as Owner of the Company Trust Certificate hereunder, and its
successors.
"Company Trust Certificate" means the Trust Certificate purchased by
the Company on the Closing Date pursuant to Section 3.11, having an initial
principal balance equal to $__________.
"Definitive Trust Certificates" shall have the meaning assigned to
such term in Section 3.12.
"Depositor" means WFS Financial Auto Loans, Inc. in its capacity as
depositor hereunder, and its successors.
"DTC" means The Depository Trust Company, and its successors.
"ERISA" means the Employment Retirement Income Security Act of 1974,
as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expenses" shall have the meaning assigned to such term in Section
8.02.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.02.
"Indenture" means the indenture dated as of March 1, 1998, among the
Trust and Bankers Trust Company, as Indenture Trustee.
"Instructing Party" shall have the meaning assigned to such term in
Section 6.03(a).
"Insurer" means Financial Security Assurance, Inc., and its
successors.
"Note Depository Agreement" means the agreement dated March __, 1998,
among the Trust, the Indenture Trustee and DTC, as the initial Clearing Agency,
relating to the Notes, as the same may be amended and supplemented from time to
time.
"Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes, in each case issued pursuant to the Indenture.
"Original Certificate Balance" means $___________.
"Owner" means each Holder of a Trust Certificate.
"Owner Trustee" means Chase Manhattan Bank Delaware, a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
3
9
"Owner Trustee Corporate Trust Office" means the office of the Owner
Trustee at which its corporate trust business shall be administered, which
initially shall be Chase Manhattan Bank Delaware, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Administration
Department, with a copy to The Chase Manhattan Bank, 000 Xxxx 00xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Services (ABS),
or such other office at such other address as the Owner Trustee may designate
from time to time by notice to the Certificateholders, the Master Servicer, the
Depositor, the Company and the Insurer. The foregoing address of The Chase
Manhattan Bank shall be its address for purposes of its acting as Certificate
Registrar and as agent of the Owner Trustee pursuant to Sections 3.04 and 3.08,
or such other office at such other address as the Owner Trustee may designate
from time to time by notice to the Certificateholders, the Master Servicer, the
Depositor, the Company and the Insurer.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 3.10.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Record Date" means, with respect to any Distribution Date, the day
immediately preceding such Distribution Date or, if Definitive Trust
Certificates are issued, the 15th day of the month preceding the month in which
such Distribution Date occurs.
"Sale and Servicing Agreement" means the sale and servicing agreement,
dated as of March 1, 1998, among the Trust, as Issuer, the Depositor, as Seller
and WFS, as Master Servicer, as the same may be amended or supplemented from
time to time.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Seller" means WFS Financial Auto Loans, Inc., in its capacity as
seller under the Sale and Servicing Agreement, and its successors.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" means the trust established by this Agreement.
"Trust Certificates" means the trust certificates evidencing the
beneficial interest of an Owner in the Trust, substantially in the form of
Exhibit C hereto.
"Trust Estate" means all right, title and interest of the Trust in and
to the property and rights assigned to the Trust pursuant to Article Two of the
Sale and Servicing Agreement, all funds on deposit from time to time in the
Trust Accounts and all other property of the Trust
4
10
from time to time, including any rights of the Owner Trustee and the Trust
pursuant to the Sale and Servicing Agreement and the Administration Agreement.
"Underwriters" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation and ______________________________.
"WFS" means WFS Financial Inc, and its successors.
Section 1.02. Other Definitional Provisions. Capitalized terms
used that are not otherwise defined herein shall have the meanings ascribed
thereto in the Sale and Servicing Agreement or, if not defined therein, in the
Indenture.
Section 1.03. Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
amendments, modifications and supplements thereto or any changes therein
entered into in accordance with their respective terms and not prohibited by
this Agreement; references to Persons include their permitted successors and
assigns; and the term "including" means "including without limitation".
Section 1.04. Section References. All section references, unless
otherwise indicated, shall be to Sections in this Agreement.
Section 1.05. Accounting Terms. All accounting terms used but not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States.
5
11
ARTICLE TWO
ORGANIZATION
Section 2.01. Name. The Trust created hereby shall be known as
"WFS Financial 1998-A Owner Trust", in which name the Owner Trustee may conduct
the activities of the Trust, make and execute contracts and other instruments
on behalf of the Trust and xxx and be sued.
Section 2.02. Office. The office of the Trust shall be in care of
the Owner Trustee at the Owner Trustee Corporate Trust Office or at such other
address in Delaware as the Owner Trustee may designate by written notice to the
Owners, the Depositor and the Insurer.
Section 2.03. Purposes and Powers.
(a) The sole purpose of the Trust is to conserve the Trust Estate
and collect and disburse the periodic income therefrom for the use and benefit
of the Owners, and in furtherance of such purpose to engage in the following
ministerial activities:
(i) to issue the Notes pursuant to the Indenture and the
Trust Certificates pursuant to this Agreement and to sell the Notes
and the Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the
Trust Certificates, to purchase the Contracts, to fund the Spread
Account and to pay the organizational, start-up and transactional
expenses of the Trust and to pay the balance to the Depositor pursuant
to the Sale and Servicing Agreement;
(iii) to Grant the Trust Estate pursuant to the Indenture
and to hold, manage and distribute to the Owners pursuant to the Sale
and Servicing Agreement any portion of the Trust Estate released from
the Lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the
Basic Documents to which it is to be a party;
(v) to engage in those activities, including entering
into agreements, that are necessary to accomplish the foregoing or are
incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Trust Estate and the making of distributions to
the Owners and the Noteholders.
The Trust shall not engage in any activities other than in connection with the
foregoing. Nothing contained herein shall be deemed to authorize the Owner
Trustee, on behalf of the Trust, to engage in any business operations or any
activities other than those set forth in the
6
12
introductory sentence of this Section. Specifically, the Owner Trustee, on
behalf of the Trust, shall have no authority to engage in any business
operations, acquire any assets other than those specifically included in the
Trust Estate under Section 1.01 or otherwise vary the assets held by the Trust.
Similarly, the Owner Trustee shall have no discretionary duties other than
performing those ministerial acts set forth above necessary to accomplish the
purpose of the Trust as set forth in the introductory sentence of this Section.
Section 2.04. Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein, and the
Owner Trustee hereby accepts such appointment.
Section 2.05. Initial Capital Contribution of Owner Trust Estate.
The Depositor hereby sells, assigns, transfers, conveys and sets over to the
Owner Trustee, as of the date hereof, the sum of $1.00. The Owner Trustee
hereby acknowledges receipt in trust from the Depositor, as of the date hereof,
of the foregoing contribution, which shall constitute the initial Trust Estate
and shall be deposited in the Certificate Distribution Account. The Depositor
shall pay organizational expenses of the Trust as they may arise or shall, upon
the request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
Section 2.06. Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Trust Estate in trust upon and subject to the
conditions set forth herein for the sole purpose of conserving the Trust Estate
and collecting and disbursing the periodic income therefrom for the use and
benefit of the Owners, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that the Trust constitute
a business trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such business trust. It is the
intention of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall be treated as a partnership, with the assets of the
partnership being the Contracts and other assets held by the Trust and with the
partners of the partnership being the Certificateholders (including the
Company) and the Notes being debt of the partnership. The parties agree that,
unless otherwise required by appropriate tax authorities, the Trust will file
or cause to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as a partnership for such tax
purposes. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and duties set forth herein and in the Business Trust Statute
for the sole purpose and to the extent necessary to accomplish the purpose of
the Trust as set forth in the introductory sentence of Section 2.03.
Section 2.07. Title to Trust Property. Legal title to the Trust
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust Estate to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
Section 2.08. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall
7
13
be located in the State of California, the State of Delaware or the State of
New York. The Trust shall not have any employees in any state other than
Delaware; provided, however, that nothing herein shall restrict or prohibit the
Owner Trustee from having employees within or without the State of Delaware.
Payments will be received by the Trust only in Delaware or New York and
payments will be made by the Trust only from Delaware or New York. The only
office of the Trust will be at the Owner Trustee Corporate Trust Office.
Section 2.09. Representations and Warranties of the Depositor and
the Company.
(a) The Depositor hereby represents and warrants to the Owner
Trustee and the Insurer that:
(i) The Depositor is duly organized and validly existing
as a corporation organized and existing and in good standing under the
laws of the State of California, with power and authority to own its
properties and to conduct its business and had at all relevant times,
and has, power, authority and legal right to acquire and own the
Contracts.
(ii) 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 requires such
qualifications.
(iii) The Depositor has the power and authority to execute
and deliver this Agreement and to carry out its terms; the Depositor
has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Owner Trustee on behalf of
the Trust as part of the Trust Estate and has duly authorized such
sale and assignment and deposit with the Owner Trustee on behalf of
the Trust by all necessary corporate action; and the execution,
delivery and performance of this Agreement have been duly authorized
by the Depositor by all necessary corporate action.
(iv) The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict
with, result in the breach of any of the terms and provisions of, nor
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; nor result in the creation or
imposition of any Lien upon any of the properties of the Depositor
pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate
any law or 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.
(v) There are no proceedings or investigations pending,
or to the Depositor's best knowledge threatened, before any court,
regulatory body, administrative
8
14
agency or other governmental instrumentality having jurisdiction over
the Depositor or its properties: (A) asserting the invalidity of this
Agreement, any of the other Basic Documents or the Trust Certificates,
(B) seeking to prevent the issuance of the Trust Certificates or the
consummation of any of the transactions contemplated by this Agreement
or any of the other Basic Documents, (C) 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, any of the other Basic Documents or
the Trust Certificates or (D) involving the Depositor and which might
adversely affect the federal income tax or other federal, state or
local tax attributes of the Trust Certificates.
(b) The Company hereby represents and warrants to the Owner
Trustee and the Insurer that:
(i) The Company is duly organized and validly existing as
a corporation organized and existing and in good standing under the
laws of the State of California, with power and authority to own its
properties and to conduct its business and had at all relevant times,
and has, power, authority and legal right to acquire and own the
Contracts.
(ii) The Company 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 requires such
qualifications.
(iii) The Company has the power and authority to execute
and deliver this Agreement and to carry out its terms; and the
execution, delivery and performance of this Agreement have been duly
authorized by the Company by all necessary corporate action.
(iv) 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, nor
constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or bylaws of the Company, or any
indenture, agreement or other instrument to which the Company is a
party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of the properties of the Company
pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate
any law or any order, rule or regulation applicable to the Company of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
the Company or its properties.
(v) There are no proceedings or investigations pending,
or to the Company's best knowledge threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Company or its
properties: (A) asserting the invalidity of this Agreement, any of the
other Basic
9
15
Documents or the Trust Certificates, (B) seeking to prevent the
issuance of the Trust Certificates or the consummation of any of the
transactions contemplated by this Agreement or any of the other Basic
Documents, (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Company of its
obligations under, or the validity or enforceability of, this
Agreement, any of the other Basic Documents or the Trust Certificates
or (D) involving the Company and which might adversely affect the
federal income tax or other federal, state or local tax attributes of
the Trust Certificates.
Section 2.10. Federal Income Tax Allocations.
(a) Net income of the Trust for any calendar quarter as determined
for federal income tax purposes (and each item of income, gain, loss and
deduction entering into the computation thereof) shall be allocated:
(i) among the Certificate Owners as of the first day
following the end of such quarter, in proportion to their ownership of
the principal amount of Trust Certificates on such date, net income in
an amount up to the sum of (A) the Certificate Interest Distributable
Amount for such quarter, (B) interest on the excess, if any, of the
Certificate Interest Distributable Amount for the preceding
Distribution Date over the amount in respect of interest that is
actually deposited in the Certificate Distribution Account on such
preceding Distribution Date, to the extent permitted by law, at the
Pass-Through Rate from such preceding Distribution Date through the
current Distribution Date, (C) the portion of the market discount on
the Contracts accrued during such quarter that is allocable to the
excess, if any, of the initial aggregate principal amount of the Trust
Certificates over their initial aggregate issue price and (D) any
other amounts of income payable to the Certificateholders for such
quarter; such sum to be reduced by any amortization by the Trust of
premium on Contracts that corresponds to any excess of the issue price
of Trust Certificates over their principal amount; and
(ii) to the Depositor and the Company in the proportion of
99% and 1%, respectively, to the extent of any remaining net income.
(b) If the net income of the Trust for any calendar quarter is
insufficient for the allocations described in Section 2.11(a)(i), subsequent
net income shall first be allocated to make up such shortfall before being
allocated as provided in Section 2.11(a)(ii). Net losses of the Trust, if any,
for any calendar quarter as determined for federal income tax purposes (and
each item of income, gain, loss and deduction entering into the computation
thereof) shall be allocated to the Depositor and the Company in the proportion
of 99% and 1%, respectively, to the extent the Depositor and the Company are
reasonably expected to bear the economic burden of such net losses, and any
remaining net losses shall be allocated among the Certificate Owners as of the
first day following the end of such quarter in proportion to their ownership of
the principal amount of Trust Certificates on such day. The Depositor and the
Company are authorized to modify the allocations in this paragraph if necessary
or appropriate, in its sole discretion, for the allocations to fairly reflect
the income, gain, loss and
10
16
deduction to the Depositor and the Company or to the Certificate Owners, or as
otherwise required by the Code.
11
17
ARTICLE THREE
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01. Initial Ownership. Upon the formation of the Trust
by the contribution by the Depositor pursuant to Section 2.05 and until the
issuance of the Trust Certificates, the Depositor shall be the sole beneficiary
of the Trust.
Section 3.02. The Trust Certificates. The Trust Certificates shall
be substantially in the form of Exhibit C hereto. The Trust Certificates shall
be issuable in minimum denominations of $1,000 and integral multiples of $1,000
in excess thereof; provided, however, that the Trust Certificates issued to the
Company pursuant to Section 3.11 may be issued in such denomination as required
to include any residual amount. The Trust Certificates shall be executed by
the Owner Trustee on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee and attested on behalf of the Owner
Trustee by the manual or facsimile signature of an authorized officer of the
Owner Trustee and shall be deemed to have been validly issued when so executed.
Trust Certificates bearing the manual or facsimile signatures of individuals
who were, at the time when such signatures were affixed, authorized to sign on
behalf of the Owner Trustee shall be valid and binding obligations of the
Trust, notwithstanding that such individuals or any of them have ceased to be
so authorized prior to the authentication and delivery of such Trust
Certificates or did not hold such offices at the date of such Trust
Certificates. All Trust Certificates shall be dated the date of their
authentication.
Section 3.03. Authentication and Delivery of Trust Certificates.
The Owner Trustee shall cause to be authenticated and delivered upon the order
of the Depositor, in exchange for the Contracts and the other assets of the
Trust, simultaneously with the sale, assignment and transfer to the Trust of
the Contracts, and the constructive delivery to the Owner Trustee of the
Contract Files and the other assets of the Trust, Trust Certificates duly
authenticated by the Owner Trustee, in authorized denominations equaling in the
aggregate the Original Certificate Balance evidencing the entire ownership of
the Trust and Notes issued by the Owner Trustee and authenticated by the
Indenture Trustee in aggregate principal amount of, in the case of the (i)
Class A-1 Notes, $____________, (ii) Class A-2 Notes, $___________, (iii) Class
A-3 Notes, $__________ and (iv) Class A-4 Notes, $__________. No Trust
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Trust Certificate a certificate
of authentication substantially in the form set forth in the form of Trust
Certificate attached hereto as Exhibit C, executed by the Owner Trustee or its
authenticating agent, by manual signature, and such certificate upon any Trust
Certificate shall be conclusive evidence, and the only evidence, that such
Trust Certificate has been duly authenticated and delivered hereunder. Upon
issuance, authentication and delivery pursuant to the terms hereof, the Trust
Certificates will be entitled to the benefits of this Agreement.
12
18
Section 3.04. Registration of Transfer and Exchange of Trust
Certificates.
(a) The Certificate Registrar shall keep or cause to be kept, a
Certificate Register, subject to such reasonable regulations as it may
prescribe. The Certificate Register shall provide for the registration of
Trust Certificates and transfers and exchanges of Trust Certificates as
provided herein. The Chase Manhattan Bank, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Services (ABS) as agent
for the Owner Trustee, is hereby initially appointed Certificate Registrar for
the purpose of registering Trust Certificates and transfers and exchanges of
Trust Certificates as herein provided. In the event that, subsequent to the
Closing Date, the Owner Trustee notifies the Master Servicer that The Chase
Manhattan Bank is unable to act as Certificate Registrar, the Master Servicer
shall appoint another bank or trust company, having an office or agency located
in The City of New York, agreeing to act in accordance with the provisions of
this Agreement applicable to it, and otherwise acceptable to the Owner Trustee,
to act as successor Certificate Registrar hereunder.
(b) Upon surrender for registration of transfer of any Trust
Certificate at the office of the Certificate Registrar, the Owner Trustee shall
execute, authenticate and deliver (or shall cause its authenticating agent to
authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Trust Certificates in authorized denominations of
a like aggregate principal amount.
(c) At the option of a Certificateholder, Trust Certificates may
be exchanged for other Trust Certificates in authorized denominations of a like
aggregate principal amount, upon surrender of the Trust Certificates to be
exchanged at the office of the Certificate Registrar. Whenever any Trust
Certificates are so surrendered for exchange, the Owner Trustee on behalf of
the Trust shall execute, authenticate and deliver (or shall cause its
authenticating agent to authenticate and deliver) the Trust Certificates that
the Certificateholder making the exchange is entitled to receive. Every Trust
Certificate presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer in form satisfactory
to the Owner Trustee and the Certificate Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing.
(d) No service charge shall be made for any registration of
transfer or exchange of Trust Certificates, but the Owner 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 Trust Certificates.
(e) The Trust Certificates may not be acquired by or for the
account of a Benefit Plan. By accepting and holding a Trust Certificate, the
Holder thereof shall be deemed to have represented and warranted that it is not
a Benefit Plan nor will it hold such Trust Certificate for the account of a
Benefit Plan.
(f) All Trust Certificates surrendered for registration of
transfer or exchange, if surrendered to the Company or any agent of the Owner
Trustee or the Company under this Agreement, shall be delivered to the Owner
Trustee and promptly cancelled by it, or, if
13
19
surrendered to the Owner Trustee, shall be promptly cancelled by it, and no
Trust Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Owner Trustee shall
dispose of cancelled Trust Certificates in accordance with the normal industry
practice.
Section 3.05. Mutilated, Destroyed, Lost or Stolen Trust
Certificates. If (i) any mutilated Trust Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate, and
(ii) there is delivered to the Certificate Registrar and the Owner 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 Trust Certificate has been acquired by
a bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute
and the Owner Trustee or its authenticating agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Certificate, a new Trust Certificate of like tenor and fractional
undivided interest. In connection with the issuance of any new Trust
Certificate under this Section, the Owner Trustee may require the payment by
the Holder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto. Any duplicate Trust Certificate
issued pursuant to this Section shall constitute complete and indefeasible
evidence of ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Trust Certificate shall be found at any time.
Section 3.06. Persons Deemed Owners. Prior to due presentation of
a Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar, any Paying Agent and any of their respective agents may
treat the Person in whose name any Trust Certificate is registered as the owner
of such Trust Certificate for the purpose of receiving distributions pursuant
to Section 5.02 and for all other purposes whatsoever, and none of the Owner
Trustee, the Certificate Registrar, any Paying Agent or any of their respective
agents shall be affected by any notice to the contrary.
Section 3.07. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Master Servicer, the Insurer and the Depositor, within 15 days after receipt by
the Certificate Registrar of a written request therefor from the Master
Servicer, the Insurer or the Depositor, a list, in such form as the Master
Servicer or the Depositor 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 Trust Certificates evidencing not
less than 25% of the percentage interests of the Trust Certificates
(hereinafter referred to as "Applicants"), apply in writing to the Owner
Trustee, and such application states that the Applicants desire to communicate
with other Certificateholders with respect to their rights hereunder or under
the Trust Certificates and such application is accompanied by a copy of the
communication that such Applicants propose to transmit, then the Owner Trustee
shall, within five Business Days after the receipt of such application, afford
such Applicants access, during normal business hours, to the current list of
Certificateholders. Every Certificateholder, by receiving and holding a Trust
Certificate, agrees with the Master Servicer, the Depositor and the Owner
Trustee that none of the Master Servicer, the Depositor or the Owner Trustee
shall be held accountable by reason
14
20
of the disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 3.08. Maintenance of Office or Agency. The Chase Manhattan
Bank, as agent for the Owner Trustee, shall maintain in the Borough of
Manhattan, The City of New York, an office or offices or agency or agencies
where Trust Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Owner Trustee in respect
of the Trust Certificates and the Basic Documents may be served. The Owner
Trustee hereby designates the office of The Chase Manhattan Bank at the address
provided under the definition of the term "Owner Trustee Corporate Trust
Office" as its office for such purposes. The Owner Trustee shall give prompt
written notice to the Depositor, the Master Servicer and to Certificateholders
of any change in the location of the Certificate Register or any such office or
agency.
Section 3.09. Temporary Trust Certificates. Pending the
preparation of definitive Trust Certificates, the Owner Trustee, on behalf of
the Trust, may execute, authenticate and deliver, temporary Trust Certificates
that are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Trust Certificates in lieu of which they are issued. If temporary
Trust Certificates are issued, the Depositor will cause definitive Trust
Certificates to be prepared without unreasonable delay. After the preparation
of definitive Trust Certificates, the temporary Trust Certificates shall be
exchangeable for definitive Trust Certificates upon surrender of the temporary
Trust Certificates at the office or agency to be maintained as provided in
Section 3.08, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Trust Certificates, the Owner Trustee shall execute
and authenticate and deliver in exchange therefor a like principal amount of
definitive Trust Certificates in authorized denominations. Until so exchanged,
the temporary Trust Certificates shall in all respects be entitled to the same
benefits hereunder as definitive Trust Certificates.
Section 3.10. Appointment of Paying Agent. The Paying Agent shall
make distributions to Certificateholders from the Certificate Distribution
Account pursuant to Section 5.02(a) and shall report the amounts of such
distributions to the Owner Trustee. Any Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Owner Trustee may
revoke such power and remove the Paying Agent if the Owner Trustee determines
in its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Paying Agent
initially shall be The Chase Manhattan Bank and any co-paying agent chosen by
the Paying Agent that is acceptable to the Owner Trustee. Each Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to
the Owner Trustee. In the event that The Chase Manhattan Bank shall no longer
be the Paying Agent, the Owner Trustee shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company). The Owner Trustee shall
cause such successor Paying Agent or any additional Paying Agent appointed by
the Owner Trustee to execute and deliver to the Owner Trustee an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Owner Trustee that, as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums,
15
21
if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be
paid to such Certificateholders. The Paying Agent shall return all unclaimed
funds to the Owner Trustee and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the Owner Trustee. The
provisions of Sections 7.01, 7.03, 7.04 and 8.01 shall apply to the Owner
Trustee also in its role as Paying Agent, for so long as the Owner Trustee
shall act as Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Agreement to the Paying Agent
shall include any co- paying agent unless the context requires otherwise. If
the long term debt rating of the Paying Agent shall not be at least Baa3 from
Xxxxx'x and BBB- from Standard & Poor's, the Rating Agencies shall be given
notice of such lower long term debt rating.
Section 3.11. Ownership by the Company of Trust Certificates. The
Company shall on the Closing Date purchase from the Underwriters Trust
Certificates representing at least 1% of the Original Certificate Balance and
shall thereafter retain beneficial and record ownership of Trust Certificates
representing at least 1% of the Certificate Balance. Any attempted transfer of
any Trust Certificate that would reduce such interest of the Company below 1%
of the Certificate Balance shall be void. The Owner Trustee shall cause any
Trust Certificate issued to the Company on the Closing Date (and any Trust
Certificate issued in exchange therefor) to contain a legend stating "THIS
TRUST CERTIFICATE IS NON- TRANSFERABLE".
Section 3.12. Book-Entry Certificates. The Trust Certificates upon
original issuance will be issued in the form of one or more typewritten
certificates representing the Book-Entry Trust Certificates, to be delivered to
DTC, the initial Clearing Agency, by, or on behalf of, the Trust; provided,
however, that one Definitive Trust Certificate (as defined below) may be issued
to the Company pursuant to Section 3.11. The certificate or certificates
delivered to DTC evidencing such Trust Certificates 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 (other than the
Company) will receive a definitive certificate representing such Certificate
Owner's interest in the Trust Certificates, except as provided in Section 3.14.
Unless and until definitive, fully registered Trust Certificates (the
"Definitive Trust Certificates") have been issued to Certificate Owners
pursuant to Section 3.14:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Depositor, the Master Servicer, the Certificate
Registrar and the Owner Trustee, subject to the provisions and
limitations of Sections 2.03 and 2.06, may deal with the Clearing
Agency for all purposes (including the making of distributions on the
Trust Certificates) as the authorized representative of the
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;
16
22
(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency (or through procedures established by
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 Certificate
Depository Agreement, unless and until Definitive Trust Certificates
are issued pursuant to Section 3.14, the Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal and interest on the
Trust 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 Trust
Certificates evidencing a specified percentage of the percentage
interests thereof, the Clearing Agency shall be deemed to represent
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 Trust Certificates and has
delivered such instructions to the Owner Trustee.
Section 3.13. Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required hereunder, unless and until
Definitive Trust Certificates shall have been issued to Certificate Owners
pursuant to Section 3.14, the Owner Trustee and the Master Servicer shall give
all such notices and communications specified herein to be given to Holders of
the Trust Certificates to the Clearing Agency.
Section 3.14. Definitive Trust Certificates. If (i)(A) the
Administrator advises the Owner Trustee in writing that the Clearing Agency is
no longer willing or able to properly discharge its responsibilities as
described in the Certificate Depository Agreement and (B) the Trustee or the
Administrator is unable to locate a qualified successor, (ii) the
Administrator, at its option, advises the Owner 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 or a Servicer Default, Certificate
Owners representing beneficial interests aggregating not less than 51% of the
Certificate Balance advise the Owner Trustee and the Clearing Agency through
the Clearing Agency Participants 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 Owner Trustee of the occurrence of any such event
and of the availability of Definitive Trust Certificates to Certificate Owners
requesting the same. Upon surrender to the Owner Trustee by the Clearing
Agency of the certificates evidencing the Book-Entry Trust Certificates,
accompanied by registration instructions from the Clearing Agency for
registration, the Owner Trustee shall issue the Definitive Trust Certificates
and deliver such Definitive Trust Certificates in accordance with the
instructions of the Clearing Agency. Neither the Depositor, the Certificate
Registrar nor the Owner 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 Trust
Certificates, the Owner Trustee shall recognize the Holders of the Definitive
Trust Certificates as Certificateholders hereunder. The Owner Trustee shall
not be liable if the Owner Trustee or the Administrator is unable to locate a
qualified successor Clearing Agency. The Definitive Trust Certificates shall
be printed, lithographed or engraved
17
23
or may be produced in any manner as is reasonably acceptable to the Owner
Trustee, as evidenced by its execution thereof.
18
24
ARTICLE FOUR
ACTIONS BY OWNER TRUSTEE
Section 4.01. Prior Notice to Owners with Respect to Certain
Matters. Subject to the provisions and limitations of Section 4.04, with
respect to the following matters, the Owner Trustee shall not take action
unless at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders in writing of the proposed action
and the Owners shall not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that such Owners have withheld consent
or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the collection
of the Contracts) and the compromise of any action, claim or lawsuit
brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of the Contracts);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
required;
(d) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interest
of the Owners;
(e) the amendment, change or modification of the
Administration Agreement, except to cure any ambiguity or to amend or
supplement any provision in a manner or add any provision that would
not materially adversely affect the interests of the Owners; or
(f) the appointment pursuant to the Indenture of a
successor Note Registrar, paying agent for the Notes or Indenture
Trustee or pursuant to this Agreement of a successor Certificate
Registrar, or the consent to the assignment by the Note Registrar,
Paying Agent, Indenture Trustee or Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable.
Section 4.02. Action by Owners with Respect to Certain Matters.
Subject to the provisions and limitations of Section 4.04, the Owner Trustee
shall not have the power, except upon the direction of the Owners and with the
prior written consent of the Insurer (so long as no Insurer Default shall have
occurred and be continuing), to (a) remove the Administrator pursuant to
Section 8 of the Administration Agreement, (b) appoint a successor
Administrator pursuant to Section 8 of the Administration Agreement, (c) remove
the Master Servicer pursuant to Section 8.01 of the Sale and Servicing
Agreement, (d) except as expressly provided in the Basic Documents, sell the
Contracts after the termination of the Indenture, (e) initiate any claim, suit
or proceeding by the Trust or compromise any claim, suit or
19
25
proceeding brought by or against the Trust, (f) authorize the merger or
consolidation of the Trust with or into any other business trust or entity
(other than in accordance with Section 3.10 of the Indenture) or (g) amend the
Certificate of Trust. The Owner Trustee shall take the actions referred to in
the preceding sentence only upon written instructions signed by the Owners.
Section 4.03. Action by Owners with Respect to Bankruptcy. The
Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the prior written consent of the
Insurer and the unanimous prior approval of all Owners and the delivery to the
Owner Trustee by each such Owner of a certificate certifying that such Owner
reasonably believes that the Trust is insolvent.
Section 4.04. Restrictions on Owners' Power. The Owners shall not
direct the Owner Trustee to take or to refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the
Owner Trustee under this Agreement or any of the other Basic Documents or would
be contrary to the purpose of this Trust as set forth in Section 2.03, nor
shall the Owner Trustee be obligated to follow any such direction, if given.
Section 4.05. Majority Control. Except as expressly provided
herein, any action that may be taken by the Owners under this Agreement may be
taken by the Holders of Trust Certificates evidencing not less than a majority
of the Certificate Balance. Except as expressly provided herein, any written
notice of the Owners delivered pursuant to this Agreement shall be effective if
signed by Holders of Trust Certificates evidencing not less than a majority of
the Certificate Balance at the time of the delivery of such notice.
20
26
ARTICLE FIVE
APPLICATION OF TRUST FUNDS;
CERTAIN DUTIES
Section 5.01. Establishment of Trust Account. The Owner Trustee,
for the benefit of the Certificateholders, shall establish and maintain in the
name of the Trust an Eligible Account (the "Certificate Distribution Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Certificateholders.
The Owner Trustee shall possess all right, title and interest in funds
on deposit from time to time in the Certificate Distribution Account and in the
proceeds thereof. Except as otherwise expressly provided herein, the
Certificate Distribution Account shall be under the sole dominion and control
of the Owner Trustee for the benefit of the Certificateholders. If, at any
time, the Certificate Distribution Account ceases to be an Eligible Account,
the Owner Trustee (or the Depositor on behalf of the Owner Trustee, if the
Certificate Distribution Account is not then held by the Owner Trustee or an
Affiliate thereof) shall within ten Business Days (or such longer period, not
to exceed 30 calendar days, as to which each Rating Agency or the Insurer must
consent) establish a new Certificate Distribution Account as an Eligible
Account and shall transfer any cash and/or any investments to such new
Certificate Distribution Account.
Section 5.02. Application of Trust Funds.
(a) On each Distribution Date, the Owner Trustee will distribute
to Certificateholders, on a pro rata basis, amounts deposited in the
Certificate Distribution Account pursuant to Sections 5.02 and 5.05 of the Sale
and Servicing Agreement with respect to such Distribution Date.
(b) On each Distribution Date, the Owner Trustee shall send to
each Certificateholder the statement or statements provided to the Owner
Trustee by the Master Servicer pursuant to Section 5.07 of the Sale and
Servicing Agreement with respect to such Distribution Date.
(c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to an Owner, such tax shall reduce
the amount otherwise distributable to the Owner in accordance with this
Section. The Owner Trustee is hereby authorized and directed to retain from
amounts otherwise distributable to the Owners sufficient funds for the payment
of any tax that is legally owed by the Trust (but such authorization shall not
prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed
with respect to an Owner shall be treated as cash distributed to such Owner at
the time it is withheld by the Trust and remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is payable with
respect to a distribution, the Owner Trustee may in its sole discretion
withhold such amounts in accordance with this paragraph (c).
21
27
Section 5.03. Method of Payment. Subject to Section 9.01(c)
respecting the final payment upon retirement of each Trust Certificate,
distributions required to be made to each Certificateholder of record on the
related Record Date shall be made by check mailed to such Certificateholder at
the address of such Holder appearing in the Certificate Register (or, if DTC,
its nominee or a Clearing Agency is the relevant Certificateholder, by wire
transfer of immediately available funds or pursuant to other arrangements), the
amount to be distributed to such Certificateholder pursuant to such Holder's
Trust Certificates.
Section 5.04. No Segregation of Monies; No Interest. Subject to
Sections 5.01 and 5.02, monies received by the Owner Trustee hereunder need not
be segregated in any manner except to the extent required by law or the Sale
and Servicing Agreement and may be deposited under such general conditions as
may be prescribed by law, and the Owner Trustee shall not be liable for any
interest thereon.
Section 5.05. Accounting and Reports to the Noteholders, Owners,
the Internal Revenue Service and Others. The Owner Trustee shall (a) maintain
(or cause to be maintained) the books of the Trust on a calendar year basis and
the accrual method of accounting, (b) deliver to each Owner, as may be required
by the Code and applicable Treasury Regulations, such information as may be
required (including Schedule K-1) to enable each Owner to prepare its federal
and state income tax returns, (c) file such tax returns relating to the Trust
(including a partnership information return, IRS Form 1065) and make such
elections as from time to time may be required or appropriate under any
applicable state or federal statute or any rule or regulation thereunder so as
to maintain the Trust's characterization as a partnership for federal income
tax purposes, (d) cause such tax returns to be signed in the manner required by
law and (e) collect or cause to be collected any withholding tax as described
in and in accordance with Section 5.02(c) with respect to income or
distributions to Owners. The Owner Trustee shall elect under Section 1278 of
the Code to include in income currently any market discount that accrues with
respect to the Contracts. The Owner Trustee shall not make the election
provided under Section 754 of the Code.
Section 5.06. Signature on Returns; Tax Matters Partner.
(a) The Company shall sign on behalf of the Trust the tax returns
of the Trust.
(b) The Company shall be designated the "tax matters partner" of
the Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury
Regulations.
22
28
ARTICLE SIX
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01. General Authority. Subject to the provisions and
limitations of Sections 2.03 and 2.06, the Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to be
a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party and any
amendment or other agreement, as evidenced conclusively by the Owner Trustee's
execution thereof. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents. The Owner Trustee is further authorized
from time to time to take such action as the Administrator recommends with
respect to the Basic Documents.
Section 6.02. General Duties. Subject to the provisions and
limitations of Sections 2.03 and 2.06, it shall be the duty of the Owner
Trustee to discharge (or cause to be discharged through the Administrator or
such agents as shall be appointed with the consent of the Insurer) all of its
responsibilities pursuant to the terms of this Agreement and the other Basic
Documents to which the Trust is a party and to administer the Trust in the
interest of the Owners, subject to the Basic Documents and in accordance with
the provisions of this Agreement. Without limiting the foregoing, the Owner
Trustee shall on behalf of the Trust file and prove any claim or claims that
may exist against the Company in connection with any claims paying procedure as
part of an insolvency or receivership proceeding involving the Company.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the other Basic
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be held
liable for the default or failure of the Administrator to carry out its
obligations under the Administration Agreement.
Section 6.03. Action Upon Instruction.
(a) Subject to Article Four, in accordance with the terms of the
Basic Documents, the Insurer (so long as an Insurer Default shall not have
occurred and be continuing) or the Owners (if an Insurer Default shall have
occurred and be continuing) (the "Instructing Party") may by written
instruction direct the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the
Instructing Party pursuant to Article Four.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any other Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any other Basic Document or is otherwise
contrary to law.
23
29
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or under any other Basic Document, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Instructing Party requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Instructing Party received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten days
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Agreement and the other Basic Documents, as it shall
deem to be in the best interests of the Owners, and shall have no liability to
any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any other Basic Document or
any such provision is ambiguous as to its application, or is, or appears to be,
in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have
received appropriate instruction within ten days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Agreement or the
other Basic Documents, as it shall deem to be in the best interests of the
Owners, and shall have no liability to any Person for such action or inaction.
Section 6.04. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of or
otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly provided by
the terms of this Agreement or in any document or written instruction received
by the Owner Trustee pursuant to Section 6.03; and no implied duties or
obligations shall be read into this Agreement or any other Basic Document
against the Owner Trustee. The Owner Trustee shall have no responsibility for
filing any financing or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security interest or
lien granted to it hereunder or to prepare or file any Commission filing for
the Trust or to record this Agreement or any other Basic Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any liens (other than the lien
of the Indenture) on any part of the Trust Estate that result from actions by,
or claims against, the Owner Trustee that are not related to the ownership or
the administration of the Trust Estate.
24
30
Section 6.05. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Trust Estate except in accordance
with (i) the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) the other Basic Documents and (iii)
any document or instruction delivered to the Owner Trustee pursuant to Section
6.03.
Section 6.06. Restrictions. The Owner Trustee shall not take any
action (i) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (ii) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for federal or state
income tax purposes. The Owners shall not direct the Owner Trustee to take
action that would violate the provisions of this Section.
25
31
ARTICLE SEVEN
CONCERNING THE OWNER TRUSTEE
Section 7.01. Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The
Owner Trustee also agrees to disburse all monies actually received by it
constituting part of the Trust Estate upon the terms of this Agreement and the
other Basic Documents. The Owner Trustee shall not be answerable or
accountable hereunder or under any other Basic Document under any
circumstances, except (i) for its own willful misconduct or negligence or (ii)
in the case of the inaccuracy of any representation or warranty contained in
Section 7.03 expressly made by the Owner Trustee. In particular, but not by
way of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Owner Trustee shall not be liable for any error
of judgment made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
instructions of the Administrator or any Owner;
(c) no provision of this Agreement or any other Basic
Document shall require the Owner Trustee to expend or risk funds or
otherwise incur any financial liability in the performance of any of
its rights or powers hereunder or under any other Basic Document if
the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes or the
Trust Certificates;
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the
due execution hereof by the Depositor or the Insurer or for the form,
character, genuineness, sufficiency, value or validity of any of the
Trust Estate, or for or in respect of the validity or sufficiency of
the Basic Documents, other than the certificate of authentication on
the Trust Certificates, and the Owner Trustee shall in no event assume
or incur any liability, duty or obligation to any Noteholder or to any
Owner, other than as expressly provided for herein or expressly agreed
to in the other Basic Documents;
(f) the Owner Trustee shall not be liable for the default
or misconduct of the Administrator, WFS Financial Auto Loans, Inc., as
Seller or Depositor, the Insurer, the Indenture Trustee or the Master
Servicer under any of the Basic Documents or otherwise and the Owner
Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the other Basic
Documents that are
26
32
required to be performed by the Administrator under the Administration
Agreement, the Indenture Trustee under the Indenture or the Master
Servicer or WFS Financial Auto Loans, Inc. as Seller or Depositor
under the Sale and Servicing Agreement; and
(g) the Owner 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
or otherwise or in relation to this Agreement or any other Basic
Document, at the request, order or direction of the Instructing Party,
unless such Instructing Party has offered to the Owner Trustee
security or indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred by the Owner Trustee therein or
thereby; the right of the Owner Trustee to perform any discretionary
act enumerated in this Agreement or in any other Basic Document shall
not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of any such act.
Section 7.02. Furnishing of Documents. The Owner Trustee shall
furnish to the Owners promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
Section 7.03. Representations and Warranties. The Owner Trustee
hereby represents and warrants to the Depositor, the Owners and the Insurer
that:
(a) It is a banking corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware. It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to
authorize the execution and delivery by it of this Agreement, and this
Agreement will be executed and delivered by one of its officers who is
duly authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Delaware law, governmental rule or
regulation governing the banking or trust powers of the Owner Trustee
or any judgment or order binding on it, or constitute any default
under its charter documents or bylaws or any indenture, mortgage,
contract, agreement or instrument to which it is a party or by which
any of its properties may be bound or result in the creation or
imposition of any lien, charge or encumbrance on the Trust Estate
resulting from actions by or claims against the Owner Trustee
individually which are unrelated to this Agreement or the other Basic
Documents.
27
33
Section 7.04. Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of determination of
which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted to be taken by
it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this Agreement or the
other Basic Documents, the Owner Trustee (i) may act directly or through its
agents or attorneys pursuant to agreements entered into with any of them, and
the Owner Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been selected by the
Owner Trustee with reasonable care, and (ii) may consult with counsel,
accountants and other skilled persons to be selected with reasonable care and
employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written opinion
or advice of any such counsel, accountants or other such persons and not
contrary to this Agreement or any other Basic Document.
Section 7.05. Not Acting in Individual Capacity. Except as
otherwise provided in this Article Seven, in accepting the trusts hereby
created, Chase Manhattan Bank Delaware acts solely as Owner Trustee hereunder
and not in its individual capacity, and all Persons having any claim against
the Owner Trustee by reason of the transactions contemplated by this Agreement
or any other Basic Document shall look only to the Trust Estate for payment or
satisfaction thereof.
Section 7.06. Owner Trustee Not Liable for Trust Certificates,
Notes or Contracts. The recitals contained herein and in the Trust
Certificates (other than the signature of the Owner Trustee and the certificate
of authentication on the Trust Certificates) shall be taken as the statements
of the Depositor, and the Owner Trustee assumes no responsibility for the
correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, any other Basic Document or the
Trust Certificates (other than the signature of the Owner Trustee and the
certificate of authentication on the Trust Certificates and the representations
and warranties in Section 7.03) or the Notes, or of any Contract or related
documents. The Owner Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Contract, or the perfection and priority of any security interest created
by any Contract in any Financed Vehicle or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Estate or its ability to generate the payments to be distributed to
Certificateholders
28
34
under this Agreement or the Noteholders under the Indenture, including, without
limitation, the existence, condition and ownership of any Financed Vehicle; the
existence and enforceability of any insurance thereon; the existence and
contents of any Contract on any computer or other record thereof; the validity
of the assignment of any Contract to the Trust or of any intervening
assignment; the completeness of any Contract; the performance or enforcement of
any Contract; the compliance by the Depositor, the Insurer or the Master
Servicer with any warranty or representation made under any Basic Document or
in any related document or the accuracy of any such warranty or representation;
or any action of the Administrator, the Indenture Trustee or the Master
Servicer or any subservicer taken in the name of the Owner Trustee.
Section 7.07. Owner Trustee May Own Trust Certificates and Notes.
The Owner Trustee in its individual or any other capacity may become the owner
or pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Insurer, the Administrator, the Indenture Trustee and the Master Servicer in
banking transactions with the same rights as it would have if it were not Owner
Trustee.
Section 7.08. Pennsylvania Motor Vehicle Sales Finance Act
Licenses. The Owner Trustee, in its individual capacity, shall use its best
efforts to maintain, and the Owner Trustee, as Owner Trustee, shall cause the
Trust to use its best efforts to maintain, the effectiveness of all licenses
required under the Pennsylvania Motor Vehicle Sales Finance Act in connection
with this Agreement and the other Basic Documents and the transactions
contemplated hereby and thereby until such time as the Trust shall terminate in
accordance with the terms hereof.
29
35
ARTICLE EIGHT
COMPENSATION OF OWNER TRUSTEE
Section 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Depositor and the
Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
Depositor for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder.
Section 8.02. Indemnification. The Company shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from and
against, any and all liabilities, obligations, losses, damages, taxes, claims,
actions and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature
whatsoever (collectively, "Expenses") which may at any time be imposed on,
incurred by or asserted against the Owner Trustee or any Indemnified Party in
any way relating to or arising out of this Agreement, the other Basic
Documents, the Trust Estate, the administration of the Trust Estate or the
action or inaction of the Owner Trustee hereunder, except only that the Company
shall not be liable for or required to indemnify an Indemnified Party from and
against Expenses arising or resulting from any of the matters described in the
third sentence of Section 7.01. The indemnities contained in this Section
shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement. In the event of any claim, action or proceeding
for which indemnity will be sought pursuant to this Section, the Owner
Trustee's choice of legal counsel shall be subject to the approval of the
Depositor, which approval shall not be unreasonably withheld.
Section 8.03. Payments to the Owner Trustee. Any amounts paid to
the Owner Trustee pursuant to this Article shall be deemed not to be a part of
the Trust Estate immediately after such payment.
30
36
ARTICLE NINE
TERMINATION OF TRUST AGREEMENT
Section 9.01. Termination of Trust Agreement.
(a) This Agreement (other than Article Eight) and the Trust shall
terminate and be of no further force or effect upon the earlier of (i) final
distribution by the Owner Trustee of all monies or other property or proceeds
of the Trust Estate in accordance with the terms of the Indenture, the Sale and
Servicing Agreement and Article Five, (ii) the expiration of 21 years from the
death of the 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
hereof and (iii) the time provided in Section 9.02. The bankruptcy,
liquidation, dissolution, death or incapacity of any Owner, other than the
Company as described in Section 9.02, shall not (i) operate to terminate this
Agreement or the Trust, (ii) entitle such Owner's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of all or any part of the Trust or Trust Estate
or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto. Notwithstanding the foregoing, the obligation of the Owner
Trustee to make draws upon the Certificate Policy shall survive the termination
of the Trust until the end of any preference period associated with the
payments previously made with respect to the Trust Certificates or termination
of the Trust.
(b) Except as provided in Section 9.01(a), neither the Depositor,
the Company, the Insurer 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 Trust
Certificates to the Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of
such termination from the Master Servicer given pursuant to Section 9.01(c) of
the Sale and Servicing Agreement, stating (i) the Distribution Date upon or
with respect to which final payment of the Trust Certificates shall be made
upon presentation and surrender of the Trust Certificates at the office of the
Paying Agent in the City of New York therein designated, (ii) the amount of any
such final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Trust Certificates at the office of the Paying Agent
therein specified. The Owner Trustee shall give such notice to the Certificate
Registrar (if other than the Owner Trustee) and the Paying Agent at the time
such notice is given to Certificateholders. Upon presentation and surrender of
the Trust Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.02. In addition, the Owner Trustee shall notify the Rating Agencies
upon the final payment of the Trust Certificates.
(d) In the event that all of the Certificateholders shall not
surrender their Trust Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Owner Trustee shall
give a second written notice to the remaining
31
37
Certificateholders to surrender their Trust Certificates for cancellation and
receive the final distribution with respect thereto. If within one year after
the second notice all the Trust Certificates shall not have been surrendered
for cancellation, the Owner Trustee may take appropriate steps, or may appoint
an agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Trust 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 Owner Trustee to the Depositor.
(e) Upon the winding up of the Trust and its termination, the
Owner Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
32
38
ARTICLE TEN
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; authorized 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 Moody's and
A-1 by Standard & Poor's. 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 Owner Trustee shall cease
to be eligible in accordance with the provisions of this Section, the Owner
Trustee shall resign immediately in the manner and with the effect specified in
Section 10.02.
Section 10.02. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Administrator and the Insurer. Upon
receiving such notice of resignation, the Administrator shall promptly appoint
a successor Owner Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Owner Trustee and one copy
to the successor Owner Trustee; provided that the Depositor shall have received
written confirmation from each Rating Agency that the proposed appointment will
not result in an increased capital charge to the Insurer by either Rating
Agency. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Insurer may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator, with the consent of the
Insurer (so long as an Insurer Default shall not have occurred and be
continuing) may remove the Owner Trustee. If the Administrator shall remove
the Owner Trustee under the authority of the immediately preceding sentence,
the Administrator shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the outgoing Owner Trustee so removed and one copy to the successor Owner
Trustee, and shall pay all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.03
33
39
and payment of all fees and expenses owed to the outgoing Owner Trustee. The
Administrator shall provide notice of such resignation or removal of the Owner
Trustee to each Rating Agency.
Section 10.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Administrator, the Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective,
and such successor Owner 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 Owner Trustee. The predecessor Owner Trustee shall, upon payment of
its fees and expenses, deliver to the successor Owner Trustee all documents and
statements and monies held by it under this Agreement; and the Administrator
and the predecessor Owner 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 Owner Trustee all such rights, powers,
duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Administrator shall mail notice thereof to all
Certificateholders, the Insurer, the Indenture Trustee, the Noteholders and
each Rating Agency. If the Administrator shall fail to mail such notice within
ten days after acceptance of such appointment by the successor Owner Trustee,
the successor Owner Trustee shall cause such notice to be mailed at the expense
of the Administrator.
Section 10.04. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner 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 Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, 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; provided, that such corporation shall be eligible pursuant to
Section 10.01 and, provided, further, that the Owner Trustee shall mail notice
of such merger or consolidation to each Rating Agency.
Section 10.05. 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 Estate or any Financed Vehicle may at the time be located, the
Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Administrator and Owner Trustee to act as co-trustee, jointly
with the Owner Trustee, or as separate trustee or separate trustees, of all or
any part of the Trust Estate, and
34
40
to vest in such Person, in such capacity, 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 Administrator and the Owner
Trustee may consider necessary or desirable. If the Administrator shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, the Owner 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 Owner Trustee pursuant
to Section 10.01 except that such co-trustee or successor trustee shall have
(or have a parent that has) a rating of at least Baa3 by Moody's and A-1 by
Standard & Poor's, and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) all rights, powers, duties and obligations conferred
or imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner 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 Owner
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 Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Owner Trustee;
(b) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(c) the Administrator and the Owner 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 Owner 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
Owner 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 Owner Trustee. Each such instrument shall be filed with the
Owner Trustee and a copy thereof given to the Administrator and the Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as 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
35
41
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
36
42
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Supplements and Amendments.
(a) This Agreement may be amended by the Depositor, the Company
and the Owner Trustee, with the prior written consent of the Insurer (so long
an Insurer Default shall not have occurred and be continuing), without the
consent of any of the Noteholders or the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions in this Agreement or to add
any other provisions with respect to matters or questions arising under this
Agreement that shall not be inconsistent with the provisions of this Agreement;
provided, however, that any such action shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time with the
prior written consent of the Insurer (so long as an Insurer Default shall not
have occurred and be continuing) by the Depositor, the Company and the Owner
Trustee, with the consent of the Holders of Trust Certificates evidencing not
less than 51% of the Certificate Balance (which consent of any Holder of a Note
or Trust Certificate given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder and
on all future Holders of such Note or Trust Certificate, as the case may be,
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made thereon) and, if such amendment
materially and adversely affects the interests of the Noteholders, with the
consent of Holders (as such term is defined in the Indenture) of Notes
evidencing not less than 51% of the Outstanding Amount of the Notes, 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 shall increase or reduce in any manner the amount of, or
accelerate or delay the timing of, (i) collections of payments on Contracts or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or any Interest Rate or the Pass- Through
Rate or (ii) reduce the aforesaid percentage of the Outstanding Amount of the
Notes and the Certificate Balance required to consent to any such amendment,
without the consent of the Insurer and the Holders of all outstanding Notes and
Trust Certificates.
(c) Prior to the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent, together with a copy thereof, to the Indenture Trustee,
the Insurer, the Administrator and each Rating Agency.
(d) Promptly after the execution of any such amendment or consent,
the Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder. It shall not be necessary for
the consent of Certificateholders, Noteholders or the Indenture Trustee
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
37
43
the substance thereof. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement or in any other
Basic Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the
Owner Trustee may prescribe.
(e) Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.
(f) In connection with the execution of any amendment to this
Agreement or any other Basic Document to which the Issuer is a party and for
which amendment the Owner Trustee's consent is sought, the Owner Trustee shall
be entitled to receive and conclusively rely upon an Opinion of Counsel to the
effect that such amendment is authorized or permitted by the Basic Documents
and that all conditions precedent in the Basic Documents for the execution and
delivery thereof by the Issuer or the Owner Trustee, as the case may be, have
been satisfied. The Owner Trustee may, but shall not be obligated to, enter
into any such amendment that affects the Owner Trustee's own rights, duties or
immunities under this Agreement or otherwise.
Section 11.02. No Legal Title to Trust Estate in Owners. The Owners
shall not have legal title to any part of the Trust Estate. The Owners shall
be entitled to receive distributions with respect to their undivided ownership
interest therein only in accordance with Articles Five and Nine. No transfer,
by operation of law or otherwise, of any right, title or interest of the Owners
to and in their ownership interest in the Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to
an accounting or to the transfer to it of legal title to any part of the Trust
Estate.
Section 11.03. Limitations on Rights of Others. Except for Section
2.07, the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Company, the Owners, the Administrator and, to the
extent expressly provided herein, the Indenture Trustee and the Noteholders,
and nothing in this Agreement (other than Section 2.07), whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
Section 11.04. Notices. All demands, notices and communications
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 in the case of (a) the Owner Trustee, at the Owner Trustee
Corporate Trust Office; (b) the Depositor, at 00 Xxxxxxx Xxxx, Xxxxxx,
Xxxxxxxxxx 00000, Attention: Legal Department; (c) the Company, at 00 Xxxxxxx
Xxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention: Legal Department; (d) the Insurer,
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Surveillance
Department, Telex No.: (000) 000-0000, Confirmation: (000) 000-0000, Telecopy
Nos.: (000) 000-0000, (000) 000-0000 (in each case in which notice or other
communication to Financial Security refers to an Event of Default, a claim on
the Certificate Policy or the Note Policy or with respect to which failure on
the part of Financial Security to respond shall be deemed to constitute consent
or acceptance, then a copy of such other notice or other communication
38
44
should also be sent to the attention of the General Counsel and the Head --
Financial Guaranty Group "URGENT MATERIAL ENCLOSED"); (e) the Certificate
Registrar or the agent for the Owner Trustee, at the address indicated under
the definition of "Owner Trustee Corporate Trust Office"; or (f) as to each
party, at such other address as shall be designated by such party in a written
notice to each other party. 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 receives
such notice.
Section 11.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the Trust
Certificates or the rights of the Holders thereof.
Section 11.06. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 11.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the Depositor, the Company, the Insurer, the Owner Trustee and their respective
successors and permitted assigns and each Owner and its successors and
permitted assigns, all as herein provided. Any request, notice, direction,
consent, waiver or other instrument or action by an Owner shall bind the
successors and assigns of such Owner.
Section 11.08. No Petition.
(a) The Depositor will not at any time institute against the Trust
or the Company any bankruptcy proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Trust Certificates, the Notes, this Agreement or any of the other Basic
Documents.
(b) The Owner Trustee, by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, and the Indenture Trustee
and each Noteholder, by accepting the benefits of this Agreement, hereby
covenant and agree that they will not at any time institute against the Seller,
the Depositor, the Company or the Trust, or join in any institution against the
Seller, the Depositor, the Company or the Trust of, any bankruptcy proceedings
under any United States federal or state bankruptcy or similar law in
connection with any obligations relating to the Trust Certificates, the Notes,
this Agreement or any of the other Basic Documents.
(c) The Company will not at any time institute against the Trust,
the Seller or the Depositor any bankruptcy proceedings under any United States
federal or state bankruptcy or
39
45
similar law in connection with any obligations relating to the Trust
Certificates, the Notes, the Agreement or any of the other Basic Documents.
Section 11.09. No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Depositor, the Company, the Master Servicer, the
Seller, the Administrator, the Owner Trustee, the Indenture Trustee or any of
their respective Affiliates and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated in this
Agreement, the Trust Certificates or the other Basic Documents.
Section 11.10. 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, and, upon
authentication thereof pursuant to Section 3.03, the Certificates shall be
deemed fully paid.
Section 11.11. 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 11.12. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, 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.
Section 11.13. Depositor Payment Obligation. The Depositor shall be
responsible for payment of the Administrator's compensation pursuant to Section
3 of the Administration Agreement and shall reimburse the Administrator for all
expenses and liabilities of the Administrator incurred thereunder.
Section 11.14. Insurer Default or Insolvency. If a default under the
Note Policy or the Certificate Policy has occurred and is continuing or a
Insurer Insolvency has occurred, any provision of this Agreement or any other
Basic Document giving the Insurer the right to direct, appoint or consent to,
approve of, or take any action under this Agreement, shall be inoperative
during the period of such default or the period from and after such Insurer
Insolvency and such consent or approval shall be deemed to have been given for
the purpose of such provisions.
40
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
WFS FINANCIAL AUTO LOANS, INC.,
as Depositor
By: ____________________________________
Name:
Title:
WFS INVESTMENTS, INC.
By: ____________________________________
Name:
Title:
FINANCIAL SECURITY ASSURANCE INC.
By: ____________________________________
Name:
Title:
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
By: ____________________________________
Name:
Title:
47
EXHIBIT A
FORM OF CERTIFICATE DEPOSITORY AGREEMENT
A-1
48
EXHIBIT B
CERTIFICATE OF TRUST OF
WFS FINANCIAL 1998-A OWNER TRUST
This Certificate of Trust of WFS Financial 1998-A Owner Trust (the
"Trust"), dated as of March __, 1998, is being duly executed and filed by Chase
Manhattan Bank Delaware, a Delaware corporation, as trustee, to form a business
trust under the Delaware Business Trust Act (12 Del. Code, Section 3801 et
seq.).
1. Name. The name of the business trust formed hereby is WFS
Financial 1998-A Owner Trust.
2. Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware is Chase Manhattan Bank Delaware,
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration Department.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as Owner Trustee
By: ____________________________________
Name:
Title:
B-1
49
EXHIBIT C
THIS TRUST CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES TO THE
EXTENT DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
UNLESS THIS TRUST 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 TRUST
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.
[TO BE INSERTED ON COMPANY CERTIFICATE--
THIS TRUST CERTIFICATE IS NON-TRANSFERABLE]
WFS FINANCIAL 1998-A OWNER TRUST
____% AUTO RECEIVABLE BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes, among other things, (i) a pool of retail
installment sale contracts secured by new and used automobiles and light duty
trucks sold to the Trust by WFS Financial Auto Loans, Inc. and (ii) a
Financial Guaranty Insurance Policy issued by Financial Security Assurance Inc.
(the "Certificate Policy"). The Certificate Final Distribution Date is _______
__, 20__.
(This Trust Certificate does not represent an interest in or obligation of WFS
Financial Auto Loans, Inc., WFS Financial Inc, WFS Investments, Inc. or any of
their respective affiliates, and is not a deposit and is not insured by the
Federal Deposit Insurance Corporation.)
Full and complete payment of the Certificate Distributable Amount on each
Distribution Date is unconditionally and irrevocably guaranteed pursuant to the
Certificate Policy.
NUMBER C-1 $___________
CUSIP NO. _________
THIS CERTIFIES THAT Cede & Co. is the registered owner of a
________________ Dollar ($___________) nonassessable, fully-paid, fractional
undivided interest in the WFS Financial 1998-A Owner Trust (the "Trust") formed
by WFS Financial Auto Loans, Inc., a California corporation (the "Depositor").
C-1
50
The Trust was created pursuant to a Trust Agreement, dated as of March
__, 1998, as amended and restated as of March __, 1998 (as amended and
supplemented from time to time, the "Trust Agreement"), among WFS Financial
Auto Loans, Inc. (the "Depositor"), WFS Investments, Inc. (the "Company"),
Financial Security Assurance Inc. (the "Insurer") and Chase Manhattan Bank
Delaware, as owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. Capitalized terms used
herein that are not otherwise defined shall have the meanings ascribed thereto
in the Trust Agreement.
This Trust Certificate is one of the duly authorized Trust
Certificates designated as "____% Auto Receivable Backed Certificates" (the
"Trust Certificates"). Issued under the Indenture, dated as of March 1, 1998
(the "Indenture"), between the Trust and Bankers Trust Company as Indenture
Trustee, are four classes of Notes designated as "_____% Auto Receivable Backed
Notes, Class A-1", "_____% Auto Receivable Backed Notes, Class A-2", "_____%
Auto Receivable Backed Notes, Class A-3" and "_____% Auto Receivable Backed
Notes, Class A-4" (collectively, the "Notes"). This Trust Certificate is
issued under and is subject to the terms, provisions and conditions of the
Trust Agreement, to which Trust Agreement the Holder of this Trust Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
The property of the Trust includes, among other things, (i) a pool of retail
installment sale contracts (the "Contracts") for new and used automobiles and
light duty trucks (the "Financed Vehicles") and (ii) the Certificate Policy.
Under the Trust Agreement, there will be distributed on each
____________ 20, ____________ 20, ____________ 20 and ____________ 20 of each
year or, if any such day is not a Business Day, the next succeeding Business
Day (each, a "Distribution Date"), commencing on ____________ 20, 1998 and
ending no later than __________ __, 20__ to the person in whose name this Trust
Certificate is registered at the close of business on the last calendar day
immediately preceding the related Distribution Date or, if Definitive Trust
Certificates are issued, the 15th day of the immediately preceding calendar
month (each, a "Record Date"), such Certificateholder's fractional undivided
interest in the amount to be distributed to Certificateholders on such
Distribution Date.
The holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders to the extent described in the
Sale and Servicing Agreement and the Indenture.
It is the intent of the Seller, the Master Servicer, the Company 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 partnership and the Certificateholders (including the Company)
will be treated as partners in that partnership. The Company and the other
Certificateholders, by acceptance of a Trust Certificate, agree to treat, and
to take no action inconsistent with the treatment of, the Trust Certificates
for such tax purposes as partnership interests in the Trust.
Each Certificateholder or Certificate Owner, by its acceptance of a
Trust Certificate or, in the case of a Certificate Owner, a beneficial interest
in a Trust Certificate, covenants and
C-2
51
agrees that such Certificateholder or Certificate Owner, as the case may be,
will not at any time institute against the Trust, the Seller, the Depositor or
the Company, or join in any institution against the Trust, the Seller, the
Depositor or the Company of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificates, the Notes, the Trust Agreement
or any of the other Basic Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Owner Trustee by wire transfer or check mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Trust Certificate or the making of any
notation hereon, except that with respect to Trust 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 Trust Agreement and notwithstanding the above, the
final distribution on this Trust Certificate will be made after due notice by
the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Trust Certificate at the office of the
Paying Agent or the office or agency maintained for that purpose by the Owner
Trustee in The City of New York.
Reference is hereby made to the further provisions of this Trust
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 Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or any other Basic Document or be valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, 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.
C-3
52
[REVERSE OF CERTIFICATE]
The Trust Certificates do not represent an obligation of, or an
interest in, the Seller, the Depositor, the Company, the Master Servicer, the
Owner Trustee or any of their respective Affiliates and no recourse may be had
against such parties or their assets, except as expressly set forth or
contemplated herein or in the Trust Agreement or the other Basic Documents. In
addition, this Trust 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 Contracts (and certain other amounts), and
amounts payable under the Certificate Policy, in each case as more specifically
set forth herein and in the Sale and Servicing Agreement. Copies of the Sale
and Servicing Agreement and the Trust 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 Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Trust
Agreement at any time by the parties thereto with the consent of Holders of
Trust Certificates evidencing not less than 51% of the Certificate Balance and,
if such amendment materially and adversely affects the interests of the
Noteholders, with the consent of Holders of Notes evidencing not less than 51%
of the Outstanding Amount of the Notes. Any such consent by the Holder of this
Trust Certificate shall be conclusive and binding on such Holder and on all
future Holders of this Trust Certificate and of any Trust 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 Trust Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the Holders of any of the Trust Certificates or the
Notes.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in
the Certificate Register upon surrender of this Trust Certificate for
registration of transfer at the offices or agencies of the Certificate
Registrar maintained in The City of New York, accompanied by a written
instrument of transfer in form satisfactory to the Owner 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 Trust
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 Trust Agreement is The Chase
Manhattan Bank.
Except as provided in the Trust Agreement, the Trust Certificates are
issuable only as registered Trust Certificates without coupons in denominations
of $1,000 and in integral multiples of $1,000 in excess thereof. As provided
in the Trust Agreement and subject to certain limitations therein set forth,
Trust Certificates are exchangeable for new Trust 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 Owner Trustee or the Certificate
Registrar may
C-4
53
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee, the Certificate Registrar, the Paying Agent and any
of their respective agents may treat the Person in whose name this Trust
Certificate is registered as the owner hereof for all purposes, and none of the
Owner Trustee, the Certificate Registrar, the Paying Agent or any such agent
shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust 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
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Trust Estate. The Seller may at its option
purchase the Trust Estate at a price specified in the Sale and Servicing
Agreement, and such purchase of the Contracts and other property of the Trust
will effect early retirement of the Trust Certificates; however, such right of
purchase is exercisable only as of any Distribution Date as of which (i) the
Aggregate Scheduled Balance is less than or equal to 10% of the Cut-Off Date
Aggregate Scheduled Balance and (ii) the aggregate outstanding principal amount
of the Securities is less than 5% of the aggregate outstanding principal amount
of the Securities as of the Closing Date.
The Trust Certificates may not be acquired by a Benefit Plan. By
accepting and holding this Trust Certificate, the Holder hereof or, in the case
of Book-Entry Trust Certificate, by accepting a beneficial interest in this
Trust Certificate, the related Certificate Owner, shall be deemed to have
represented and warranted that it is not a Benefit Plan and is not acquiring
this Trust Certificate or an interest therein for the account of a Benefit
Plan.
C-5
54
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Trust Certificate to be duly
executed.
Dated: March __, 1998 WFS FINANCIAL 1998-A OWNER TRUST
By: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By: ___________________________________
Authorized Signatory
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the
within-mentioned Trust Agreement.
THE CHASE MANHATTAN BANK, CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
as Certificate Registrar but solely as Owner Trustee
OR
By: ________________________________ By: ____________________________________
Authorized Signatory Authorized Signatory
C-6
55
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 Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
________________________________________________________________________________
to transfer said Trust Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated: _____________________
Signature Guaranteed:
________________________________________ ________________________________
NOTICE: Signature(s) must be guaranteed NOTICE: The signature to this
by an eligible guarantor institution. assignment must correspond with
the name of the registered owner
as it appears on the face of the
within Trust Certificate in
every particular, without
alteration or enlargement or any
change whatever.
C-7
