EXECUTION COPY
EXHIBIT 10.1
REINVESTMENT CONTRACT
AGREEMENT dated as of 1, 200 by and among WESTERN FINANCIAL BANK,
a federally chartered savings association formerly known as Western Financial
Savings Bank, F.S.B. (including its successors and assigns, the "Bank"), WFS
FINANCIAL AUTO LOANS 2, INC., a California corporation (including its successors
and assigns, "WFAL 2"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its
individual capacity but solely in its respective capacities as trustee (the
"Indenture Trustee") and as Collateral Agent, under the Indenture dated as of
1, 200 (the "Indenture"), between the Trust and the Indenture Trustee.
R E C I T A L S
WFS Financial 2003- Owner Trust (the "Trust"), created by the Trust
Agreement dated as of , 200 , as amended and restated as of ,
200 , between WFS Receivables Corporation and Chase Manhattan Bank USA, N.A.,
has issued $ aggregate principal amount of % Class A-1 Notes (the
"Class A-1 Notes"), $ aggregate principal amount of Class A-2 Notes
(the "Class A-2 Notes"), $ aggregate principal amount of % Class A-3
Notes (the "Class A-3"), $ Class A-3 Notes (the "Class A-3 Notes") and
$ aggregate principal amount of % Class A-4 Notes (the "Class A-4
Notes, and, collectively with the Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, the "Class A Notes"), $ aggregate principal amount of %
Class B Notes (the "Class B Notes), $ aggregate principal amount of %
Class C Notes (the "Class C Notes) and $ aggregate principal amount of %
Class D Notes (the "Class D Notes and with the Class A Notes, Class B Notes and
Class C Notes the "Notes"). The Contracts will be transferred to the Trust and
serviced by the Master Servicer pursuant to the Sale and Servicing Agreement,
dated as of 1, 200 (the "Sale and Servicing Agreement"), among the Trust,
WFS Receivables Corporation and WFS Financial Inc. (the "Master Servicer"). The
Indenture Trustee as trustee under the Indenture desires to assure that the
funds deposited in or credited to the Collection Account, the Note Distribution
Account and the Certificate Distribution Account (collectively, the "Specified
Accounts") from time to time are invested and applied in accordance with the
Sale and Servicing Agreement, and the Indenture Trustee as collateral agent
desires to assure that funds on deposit from time to time in the Spread Account
are invested. Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in (i) the Master Security Agreement dated as
of 1, 2003 among Western Financial Bank, WFS Financial Auto Loans 2, Inc.
and the Collateral Agent. (as may be amended, the "Master Security Agreement")
and (ii) the Indenture.
A G R E E M E N T S
The parties hereto agree as follows:
Section 1. Investments by the Indenture Trustee. In accordance with,
but subject to, Section 2, the Indenture Trustee shall invest pursuant to this
Agreement with the Bank or WFAL 2 or both, as directed by the Master Servicer,
(i) all funds credited to the Specified Accounts, from time to time, on the
Business Day on which such funds are so credited (such funds so invested being
herein referred to as the "Specified Account Invested Funds"), and (ii) all
funds credited to the Spread Account, from time to time, on the Business Day on
which such funds are so credited (such funds so invested being herein referred
to as the "Spread Account Invested Funds"). Each of the Indenture Trustee, WFAL
2 and the Bank agrees that the aggregate amount of funds that are permitted to
be invested hereunder with WFAL 2 that are Specified Account Invested Funds on
any day shall not exceed twenty-five percent (25%) of the aggregate amount of
Specified Account Invested Funds on such day. The Specified Account Invested
Funds and the Spread Account Invested Funds are herein referred to collectively
as the "Invested Funds."
Section 2. Investment of Invested Funds. (a) The Master Servicer will
deposit in the Collection Account upon receipt certain collections on the
Contracts as described in Sections 4.01 and 5.02 of the Sale and Servicing
Agreement and the Indenture Trustee will deposit in the Spread Account, the Note
Distribution Account, and the Certificate Distribution Account amounts from time
to time required to be deposited in such Accounts pursuant to Article Five of
the Sale and Servicing Agreement. Subject to paragraphs (b) and (c) below, each
of the Bank and WFAL 2, as the case may be, may invest the Invested Funds
received by it in investments selected by it at its discretion (including,
without limitation, in the case of the Bank, the use of such funds in its
operations, or, in the case of WFAL 2, the use of such funds to purchase
Contracts as permitted by its Articles) so long as this Agreement is an Eligible
Investment. Except as specified in paragraphs (b) below, it shall not be
necessary for the Bank or WFAL2 to segregate the Invested Funds deposited with
it hereunder. If on any date this Agreement shall cease to be an Eligible
Investment or is terminated, then on such date and on each date thereafter funds
in the Specified Accounts will not be delivered to and invested by the Bank
and/or WFAL 2 but will instead be invested by the Indenture Trustee in Eligible
Investments pursuant to the Sale and Servicing Agreement and funds in the Spread
Account will (in each case) not be invested by the Bank or WFAL 2 but will
instead be invested by the Indenture Trustee as collateral agent in Eligible
Investments pursuant to the Sale and Servicing Agreement.
(b) If on any date the Collateral Agent, acting in its sole
discretion, shall have notified the Bank and WFAL 2 and the Indenture Trustee
(in its capacity as Indenture Trustee under the Indenture) in writing that the
Specified Account Invested Funds are to be held in a segregated trust account,
then on such date (or, if such date is not a Business Day, the next succeeding
Business Day) and on each day thereafter during the term of this Agreement all
Specified Account Invested Funds shall be held in segregated trust accounts
established by the Indenture Trustee as Eligible Accounts at Deutsche Bank
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Trust Company Americas or at another depositary institution approved by the
Collateral Agent. All Invested Funds held in an account established pursuant to
this paragraph shall be invested in Eligible Investments, except pursuant to
paragraph (a) above, pursuant to instructions by the Bank or WFAL 2 in its
discretion or, in the absence of such instructions by the Bank or WFAL 2, as the
case may be, or if any Event of Default shall have occurred and is continuing,
pursuant to instructions by the Collateral Agent.
(c) If on any date the Collateral Agent, acting in its sole
discretion, shall have notified the Bank and WFAL 2 and the Indenture Trustee
(in its capacity as collateral agent) in writing that the Spread Account
Invested Funds are to be held in a segregated trust account, then on such date
(or, if such date is not a Business Day, the next succeeding Business Day) and
on each day thereafter during the term of this Agreement all Spread Account
Invested Funds shall be held in a segregated trust account established by the
Indenture Trustee as an Eligible Account at Deutsche Bank Trust Company Americas
or at another depositary institution approved by the Collateral Agent. All
Invested Funds held in an account established pursuant to this paragraph shall
be invested in Eligible Investments, except pursuant to paragraph (a) above,
pursuant to instructions by the Master Servicer or, in the absence of such
instructions, as otherwise provided in Section 5.06(c) of the Sale and Servicing
Agreement.
Section 3. Payments by the Bank and WFAL 2. Each of the Bank and WFAL
2 shall be obligated to make payments in accordance with this Section until this
Agreement shall have terminated and all amounts owing by it under this Agreement
shall have been paid by it in full. On the fifth Business Day prior to each
Distribution Date, the Bank and/or WFAL 2, as the case may be, shall deposit,
and each shall cause the other to deposit, its Proportionate Share (as defined
below), if any, of the following amounts in the following accounts: (A) in the
related Specified Account, the portion of the Specified Account Invested Funds
allocable to such Specified Account with respect to such Distribution Date plus
the amount, if any (the "Reinvestment Earnings"), by which the Interest Payment
(as defined below) for such Distribution Date exceeds the sum of (i) the
aggregate amount of interest collected on the Contracts (adjusted with respect
to each Contract to % per annum (the fixed rate payable by the Issuer under the
Interest Rate in respect of the Class D Notes) and exclusive of such collections
that have been paid to the Master Servicer in reimbursement of a previous
Advance) that is part of the Net Collections for such Distribution Date and (ii)
the amount of the interest portion of the Advance for the related Due Period
(assuming for this purpose that an Advance was made in respect of each
delinquent Contract); (B) in the Spread Account, the Spread Account Invested
Funds; provided, however, that if Invested Funds are held in one or more
segregated trust accounts at the Indenture Trustee or another depositary
institution pursuant to paragraph (b), (c), or (d) of Section 2, then the
Indenture Trustee shall, on the fifth Business Day prior to each Distribution
Date, make or cause to be made the following respective deposits (as paragraphs
(b), (c), and (d) of Section 2 are then applicable, respectively): (A) in each
Specified Account, the Specified Account Invested Funds with respect to such
Specified Account and such Distribution Date plus the net reinvestment income,
if any, thereon, (B) in the Spread Account, the Spread Account Invested Funds
plus the net reinvestment income, if any, thereon; provided, further, that
solely for purposes of this Agreement the Interest Payment for the first
Distribution Date
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shall be calculated as interest for the period from , 200 to and including
, 200 .
"Interest Payment" means, with respect to any Distribution Date, an
amount equal to the sum of (i) interest at the Class A-1 Rate on the outstanding
principal balance of the Class A-1 Notes as of the immediately preceding
Distribution Date (or in the case of the first Distribution Date from, and
including, the Closing Date), (ii) interest at the Class A-2 Rate on the
outstanding principal balance of Class A-2 Notes as of the immediately preceding
Distribution Date (or in the case of the first Distribution Date from, and
including, the Closing Date), (iii) interest at the Class A-3 Rate on the
outstanding principal balance of Class A-3 Notes as of the immediately preceding
Distribution Date (or in the case of the first Distribution Date from, and
including, the Closing Date), (iv) interest at the Class A-4 Rate on the
outstanding principal balance of Class A-4 Notes as of the immediately preceding
Distribution Date (or in the case of the first Distribution Date from, and
including, the Closing Date), (v) interest at the Class B Rate on the
outstanding principal balance of Class B Notes as of the immediately preceding
Distribution Date (or in the case of the first Distribution Date from, and
including, the Closing Date), (vi) interest at the Class C Rate on the
outstanding principal balance of Class C Notes as of the immediately preceding
Distribution Date (or in the case of the first Distribution Date from, and
including, the Closing Date) and (vii) interest at the Class D Rate on the
outstanding principal balance of Class D Notes as of the immediately preceding
Distribution Date (or in the case of the first Distribution Date from, and
including, the Closing Date).
"Proportionate Share" means, with respect to the Specified Account
Invested Funds, the Spread Account Invested Funds and with respect to the Bank
or WFAL 2, as applicable, the amount of Specified Account Invested Funds or
Spread Account Invested Funds invested hereunder, either with the Bank or WFAL
2, as applicable, divided by the total amount of the Specified Account Invested
Funds, the Spread Account Invested Funds invested or deposited hereunder as of
the fifth Business Day before a Distribution Date.
Section 4. Timing of Payments. On the fifth Business Day immediately
prior to each Distribution Date (each, a "RIC Maturity Date"), (i) the
investment pursuant to this Agreement of Specified Account Invested Funds with
respect to such Distribution Date and of all Spread Account Invested Funds shall
mature and be due and payable.
Section 5. Manner of Payments. Deposits into any Specified Account by
the Bank and WFAL 2 in accordance with this Agreement shall be made in
immediately available funds to such Specified Account under advice to the
Indenture Trustee at its address set forth in Section 8. Deposits into the
Spread Account by the Bank and WFAL 2 in accordance with this Agreement shall be
made in immediately available funds to the Spread Account under advice to the
Indenture Trustee as collateral agent at its address set forth in Section 8.
Section 6. Term of Agreement. This Agreement shall terminate on the
first date on which (i) the Notes shall have been paid in full as provided in
the Sale and
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Servicing Agreement, (ii) each of the Bank and WFAL 2 shall have paid the
aggregate amount of all Specified Account Invested Funds hereunder to the
Indenture Trustee and the aggregate amount of all Spread Account Invested Funds
hereunder to the Indenture Trustee as collateral agent, and (iii) each of the
Bank and WFAL 2 shall have paid all other remaining amounts owing by it
hereunder. This Agreement may be terminated by the Bank and WFAL 2, with the
prior written consent of the Collateral Agent, upon written notice to the
Collateral Agent and the Indenture Trustee on any date following receipt by the
Bank and WFAL 2 of a notice from the Collateral Agent pursuant to paragraph (b)
of Section 2 hereof; provided that such termination by the Bank and WFAL 2 may
occur on any RIC Maturity Date without such consent of the Collateral Agent if
(i) each of the Bank and WFAL 2 shall have made all of the payments referred to
in clauses (ii) and (iii) of the immediately preceding sentence, and (ii) each
of the Bank and WFAL 2 shall have paid the amount of the Proportionate Share of
Reinvestment Earnings and net reinvestment income accrued under Section 3 but
not otherwise owing on such RIC Maturity Date. If on any date this Agreement
shall cease to be an Eligible Investment, then (A) on such date and on each date
thereafter funds in the Specified Accounts and in the Spread Account will be
invested in the manner specified in the last sentence of Section 2(a), (B) on
the next succeeding RIC Maturity Date, the Bank and WFAL 2 shall make all of the
payments referred to in clause (ii) of the second preceding sentence (other than
Specified Account Invested Funds, if any, relating to the second Distribution
Date immediately following such RIC Maturity Date) and clause (iii) of the
second preceding sentence, and (C) on the RIC Maturity Date next succeeding the
RIC Maturity Date referred to in clause (B) of this sentence, the Bank and WFAL
2 shall pay the aggregate amount of any remaining Specified Account Invested
Funds hereunder to the Indenture Trustee and shall pay all remaining amounts
owing by the Bank or WFAL 2 hereunder, including its Proportionate Share of the
Reinvestment Earnings and net reinvestment income accrued under Section 3 for
the period ending on such date, to the Indenture Trustee, as trustee under the
Indenture and as collateral agent, respectively, in the manner specified in
Section 5, and upon the making of all such payments pursuant to clauses (B) and
(C) of this sentence this Agreement shall terminate.
Section 7. Representations. (a) Each of the Bank and WFAL 2 hereby
makes the representations and warranties set forth in the Master Security
Agreement, on and as of the date hereof as if set forth in full herein.
(b) Each of the Indenture Trustee, solely in its respective capacities
as trustee under the Indenture and as collateral agent and not in its individual
capacity, the Bank and WFAL 2 represent and warrant, each as to itself to the
other, that this Agreement has been duly authorized, executed and delivered and
constitutes a valid and binding agreement and that neither the execution and
delivery of this Agreement by it nor the performance of its obligations under
this Agreement will contravene any federal or state law or any order, decree,
license, permit or the like which is applicable to it or to which it is a party
or by which it is bound.
Section 8. Notices. All notices and other communications given
pursuant to this Agreement shall be communicated to the addresses listed below,
or to such other
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address or to the attention of such other person as such party shall have
designated for such purpose in a written notice to the other:
If to the Indenture Deutsche Bank Trust Company Americas
Trustee, as trustee 00 Xxxx Xxxxxx
under the Indenture Xxx Xxxx, Xxx Xxxx 00000
and as collateral Attention: Corporate Trust & Agency Services -
agent Structured Finance Services
cc: Deutsche Bank Trust Company
Americas c/o DB Services New Jersey
Inc.
Attention: Corporate Trust & Agency Services -
Structured Finance Services
100 Plaza One, MS JCY03-0606
Xxxxxx Xxxx, Xxx Xxxxxx 00000
If to the Bank: Western Financial Bank
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxx XxXxxx, Esq.
General Counsel
If to WFAL 2: WFS Financial Auto Loans 2, Inc.
00 Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxx XxXxxx, Esq.
General Counsel
Section 9. Terms. All capitalized terms used herein and not defined
herein shall have the meanings assigned to them in the Sale and Servicing
Agreement or, if not otherwise defined in the Sale and Servicing Agreement, in
the Indenture, as applicable.
Section 10. Amendments. This Agreement may not be amended except with
the prior written consent of the Collateral Agent pursuant to an instrument
signed by each party hereto.
Section 11. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors, transferees and assigns; provided that neither the Bank nor WFAL 2
may assign all or any part of this Agreement without the prior written consent
of the Collateral Agent.
Section 12. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF CALIFORNIA, EXCEPT THAT THE DUTIES OF THE INDENTURE
TRUSTEE, AS TRUSTEE UNDER THE INDENTURE AND AS COLLATERAL AGENT, SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the day and year first
written above.
WESTERN FINANCIAL BANK
By: ____________________________________
Name:
Title:
WFS FINANCIAL AUTO LOANS 2, INC.
By: ____________________________________
Name:
Title:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
not in its individual capacity
but solely as Indenture Trustee under
the Indenture and as collateral agent
By: ____________________________________
Name:
Title:
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