1
EXHIBIT 10.1
================================================================================
FORM OF
SALE AND SERVICING AGREEMENT
among
XXXXX FARGO AUTO TRUST 200_-_
as Issuer
XXXXX FARGO AUTO RECEIVABLES CORPORATION
as Seller
XXXXX FARGO BANK, N.A.
as Servicer
and
-------------------------
as Indenture Trustee
Dated as of __________, 200__
================================================================================
2
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS.
SECTION 1.1. Definitions.................................................................................1
SECTION 1.2. Other Interpretive Provisions...............................................................1
ARTICLE II.
CONVEYANCE OF RECEIVABLES.
SECTION 2.1. Conveyance of Receivables...................................................................2
ARTICLE III.
THE RECEIVABLES.
SECTION 3.1. Representations and Warranties as to Each Receivable........................................3
SECTION 3.2. Representations and Warranties as to the Receivables in the Aggregate.......................6
SECTION 3.3. Repurchase upon Breach......................................................................6
SECTION 3.4. Custodian of Receivable Files...............................................................7
ARTICLE IV.
ADMINISTRATION AND SERVICING OF RECEIVABLES.
SECTION 4.1. Duties of Servicer.........................................................................10
SECTION 4.2. Collection of Receivable Payments..........................................................11
SECTION 4.3. Realization upon Receivables...............................................................11
SECTION 4.4. Physical Damage Insurance..................................................................12
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles.....................................12
SECTION 4.6. Covenants of Servicer......................................................................13
SECTION 4.7. Purchase by Servicer upon Breach...........................................................13
SECTION 4.8. Servicing Fee..............................................................................14
SECTION 4.9. Servicer's Report..........................................................................14
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.......................................14
SECTION 4.11. Annual Independent Certified Public Accountants' Report....................................15
SECTION 4.12. Access to Certain Documentation and Information Regarding Receivables......................15
SECTION 4.13. Reports to the Commission..................................................................16
SECTION 4.14. Reports to the Rating Agencies.............................................................16
SECTION 4.15. Servicer Expenses..........................................................................16
ARTICLE V.
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS.
SECTION 5.1. Establishment of Trust Accounts............................................................16
SECTION 5.2. Collections................................................................................18
SECTION 5.3. [Reserved].................................................................................19
SECTION 5.4. Additional Deposits........................................................................19
SECTION 5.5. Distributions..............................................................................19
ii
3
TABLE OF CONTENTS
(continued)
Page
----
SECTION 5.6. Statements to Certificateholders and Noteholders...........................................21
SECTION 5.7. Net Deposits...............................................................................22
SECTION 5.8. Reserve Account............................................................................22
ARTICLE VI.
SELLER.
SECTION 6.1. Representations of Seller..................................................................24
SECTION 6.2. Continued Existence........................................................................26
SECTION 6.3. Liability of Seller; Indemnities...........................................................26
SECTION 6.4. Merger or Consolidation of, or Assumption of the Obligations of, Seller....................27
SECTION 6.5. Limitation on Liability of Seller and Others...............................................28
SECTION 6.6. Seller May Own Certificates or Notes.......................................................28
SECTION 6.7. Indebtedness of Seller.....................................................................28
ARTICLE VII.
SERVICER.
SECTION 7.1. Representations of Servicer................................................................28
SECTION 7.2. Indemnities of Servicer....................................................................30
SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations of, Servicer..................31
SECTION 7.4. Limitation on Liability of Servicer and Others.............................................31
SECTION 7.5. Xxxxx Fargo Not To Resign as Servicer......................................................32
SECTION 7.6. Existence..................................................................................32
SECTION 7.7. Servicer May Own Notes or Certificates.....................................................32
ARTICLE VIII.
SERVICER TERMINATION EVENTS.
SECTION 8.1. Servicer Termination Event.................................................................32
SECTION 8.2. Appointment of Successor...................................................................34
SECTION 8.3. Payment of Servicing Fee...................................................................35
SECTION 8.4. Notification to Noteholders and Certificateholders.........................................35
SECTION 8.5. Waiver of Past Defaults....................................................................35
ARTICLE IX.
TERMINATION.
SECTION 9.1. Optional Purchase of All Receivables; Termination Notice...................................35
ARTICLE X.
MISCELLANEOUS PROVISIONS.
SECTION 10.1. Amendment..................................................................................36
SECTION 10.2. Protection of Title to Trust Property......................................................37
SECTION 10.3. Notices....................................................................................39
SECTION 10.4. Assignment.................................................................................40
SECTION 10.5. Limitations on Rights of Others............................................................40
SECTION 10.6. Severability...............................................................................40
SECTION 10.7. Separate Counterparts......................................................................40
SECTION 10.8. Headings...................................................................................40
iii
4
TABLE OF CONTENTS
(continued)
Page
----
SECTION 10.9. Governing Law..............................................................................40
SECTION 10.10. Assignment to Indenture Trustee............................................................40
SECTION 10.11. Nonpetition Covenant.......................................................................40
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture Trustee.............................41
SECTION 10.13. Further Assurances.........................................................................41
SECTION 10.14. No Waiver; Cumulative Remedies.............................................................41
SCHEDULES
Schedule A -- Schedule of Receivables
Schedule B -- Location of Receivables
EXHIBITS
Exhibit A -- Form of Monthly Certificateholder Statement
Exhibit B -- Form of Monthly Noteholder Statement
Exhibit C -- Form of Servicer's Report
APPENDIX
Appendix X -- Definitions
iv
5
SALE AND SERVICING AGREEMENT dated as of __________, 200_ (this
"Agreement") among XXXXX FARGO AUTO TRUST 200_-_, a Delaware business trust
("Issuer"), XXXXX FARGO AUTO RECEIVABLES CORPORATION, a Delaware corporation (in
its capacity as seller, "Seller"), XXXXX FARGO BANK, N.A., a national banking
association organized under the laws of the United States of America (in its
capacity as servicer, "Servicer") and ___________________, a
_____________________ (in its capacity as indenture trustee, "Indenture
Trustee").
WHEREAS, Issuer desires to purchase from Seller a portfolio of
receivables arising in connection with Motor Vehicle Loans purchased or
originated by the Seller Affiliates and sold to Seller by Xxxxx Fargo under the
Purchase Agreement;
WHEREAS, Seller is willing to sell such receivables to Issuer; and
WHEREAS, Servicer is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms are used in this Agreement
as defined in Appendix X to this Agreement.
SECTION 1.2. Other Interpretive Provisions. For purposes of this
Agreement, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles; (b) terms defined in
Article 9 of the UCC as in effect in the relevant jurisdiction and not otherwise
defined in this Agreement are used as defined in that Article; (c) the words
"hereof," "herein" and "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement; (d)
references to any Article, Section, Schedule, Appendix or Exhibit are references
to Articles, Sections, Schedules, Appendices and Exhibits in or to this
Agreement and references to any paragraph, subsection, clause or other
subdivision within any Section or definition refer to such paragraph,
subsection, clause or other subdivision of such Section or definition; (e) the
term "including" means "including without limitation"; (f) except as otherwise
expressly provided herein, references to any law or regulation refer to that law
or regulation as amended from time to time and include any successor law or
regulation; (g) references to any Person include that Person's successors and
assigns; and (h) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
6
ARTICLE II.
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables. In consideration of Issuer's
delivery to, or upon the order of, Seller of Notes and Certificates, in
aggregate principal amounts equal to the initial principal amounts of the Notes
and the initial Certificate Balance, respectively, Seller does hereby sell,
transfer, assign, set over and otherwise convey to Issuer, without recourse,
subject to the obligations herein (collectively, the "Trust Property"):
(a) all right, title and interest of Seller in and to the Receivables,
and all moneys received thereon [on or] after the Cutoff Date;
(b) all right, title and interest of Seller in the security interests
in the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of Seller in the Financed Vehicles and any other property that
shall secure the Receivables;
(c) the interest of Seller in any proceeds with respect to the
Receivables from claims on any Insurance Policies covering Financed Vehicles or
the Obligors or from claims under any lender's single interest insurance policy
naming any Seller Affiliate as an insured;
(d) rebates of premiums relating to Insurance Policies and rebates of
other items such as extended warranties financed under the Receivables, in each
case, to the extent the Servicer would, in accordance with its customary
practices, apply such amounts to the Principal Balance of the related
Receivable;
(e) the interest of Seller in any proceeds from (i) any Receivable
repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach
of representation or warranty in the related Dealer Agreement, (ii) a default by
an Obligor resulting in the repossession of the Financed Vehicle under the
applicable Motor Vehicle Loan or (iii) any Dealer Recourse or other rights
relating to the Receivables under Dealer Agreements;
(f) all right, title and interest in all funds on deposit from time to
time in the Certificate Distribution Account and the Trust Accounts, and in all
investments and proceeds thereof (but excluding all investment income thereon);
(g) all right, title and interest of Seller under each Purchase
Agreement, including the right of Seller to cause a Seller Affiliate to
repurchase Receivables from Seller;
(h) all right, title and interest of Seller in any instrument or
document relating to the Receivables; and
(i) the proceeds of any and all of the foregoing.
The sale, transfer, assignment, setting over and conveyance made
hereunder shall not constitute and is not intended to result in an assumption by
Issuer of any obligation of any Seller Affiliates to the Obligors, the Dealers
or any other Person in connection with the Receivables
2
7
and the other assets and properties conveyed hereunder or any agreement,
document or instrument related thereto.
ARTICLE III.
THE RECEIVABLES
SECTION 3.1. Representations and Warranties as to Each Receivable.
Seller hereby makes the following representations and warranties as to each
Receivable conveyed by it to Issuer hereunder on which Issuer shall rely in
acquiring the Receivables. Unless otherwise indicated, such representations and
warranties shall speak as of the Closing Date, but shall survive the sale,
transfer and assignment of the Receivables to Issuer and the pledge thereof to
Indenture Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. The Receivable has been fully and
properly executed by the parties thereto and (i) is a Direct Loan made by an
Originator or has been originated by a Dealer in the ordinary course of such
Dealer's business and has been purchased by an Originator, in either case, in
the ordinary course of such Originator's business and in accordance with such
Originator's underwriting standards to finance the retail sale by a Dealer of
the related Financed Vehicle, (ii) was acquired by Xxxxx Fargo from the
Originator in the ordinary course of business of each such party, (iii) the
Originator of which has underwriting standards that require physical damage
insurance to be maintained on the related Financed Vehicle, (iv) is secured by a
valid, subsisting, binding and enforceable first priority security interest in
favor of a Seller Affiliate in the Financed Vehicle (subject to administrative
delays and clerical errors on the part of the applicable government agency and
to any statutory or other lien arising by operation of law after the Closing
Date which is prior to such security interest), which security interest is
assignable together with such Receivable, and has been so assigned to Seller,
and subsequently assigned by Seller to Issuer, (v) contains customary and
enforceable provisions such that the rights and remedies of the holder thereof
are adequate for realization against the collateral of the benefits of the
security, (vi) provided, at origination, for level monthly payments (provided,
that the amount of the last payment may be different), which fully amortize the
Initial Principal Balance over the original term, (vii) provides for interest at
the Contract Rate specified in the Schedule of Receivables, (viii) was
originated in the United States, (ix) constitutes "chattel paper" as defined in
the UCC and (x) has not been identified on the computer files of Xxxxx Fargo's
auto finance group as relating to an Obligor who was the subject of a bankruptcy
proceeding as of the Cut-Off Date.
(b) Individual Characteristics. The Receivables have the following
individual characteristics as of the Cutoff Date; (i) each Receivable is secured
by a Motor Vehicle; (ii) each Receivable has a Contract Rate of at least ____%
and not more than ____%; (iii) each Receivable had a remaining term, as of the
Cutoff Date, of not less than [36] months and not more than [84] months; (iv)
each Receivable had an Initial Principal Balance of not less than [$6,000] and
not more than [$50,000]; (v) no Receivable was more than 30 days past due as of
the Cutoff Date; (vi) no Financed Vehicle had been repossessed as of the Cutoff
Date; (vii) no Receivable is subject to a force placed Physical Damage Insurance
Policy on the related Financed Vehicle; (viii) each Receivable is a Simple
Interest Receivable [or an Actuarial Receivable, Rule of 78's Receivable or Sum
of Periodic Balances Receivable]; (xi) the Dealer of
3
8
the Financed Vehicle has no participation in, or other right to receive, any
proceeds of the Receivable; [and (x) no Receivable has Payaheads with respect to
payments due more than ____ months after the Cut-Off Date]. The Receivables were
selected using selection procedures that were not intended by Xxxxx Fargo or
Seller to be adverse to the Holders.
(c) Schedule of Receivables. The information with respect to each
Receivable set forth in the Schedule of Receivables, including (without
limitation) the account number of the Obligor, the Initial Principal Balance,
and the Contract Rate, was true and correct in all material respects as of the
close of business on the Cutoff Date.
(d) Compliance with Law. The Receivable complied at the time it was
originated or made, and will comply as of the Closing Date, in all material
respects with all requirements of applicable federal, state and local laws, and
regulations thereunder, including, to the extent applicable, usury laws, the
Federal Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Federal Trade Commission Act,
the Xxxxxxxx-Xxxx Warranty Act, the Fair Debt Collection Practices Act, Federal
Reserve Board Regulations B and Z and any other consumer credit, consumer
protection, equal opportunity and disclosure laws.
(e) Binding Obligation. The Receivable constitutes the genuine, legal,
valid and binding payment obligation in writing of the Obligor, enforceable in
all material respects by the holder thereof in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally, and the
Receivable is not subject to any right of rescission, setoff, counterclaim or
defense, including the defense of usury.
(f) Lien in Force. Neither Seller nor any Seller Affiliate has taken
any action which would have the effect of releasing the related Financed Vehicle
from the Lien granted by the Receivable in whole or in part.
(g) No Amendment or Waiver. No material provision of the Receivable has
been amended, waived, altered or modified in any respect, except such waivers as
would be permitted under this Agreement, and no amendment, waiver, alteration or
modification causes such Receivable not to conform to the other representations
or warranties contained in this Section.
(h) No Liens. Neither Seller nor any Seller Affiliate has received
notice of any Liens or claims, including Liens for work, labor, materials or
unpaid state or federal taxes, relating to the Financed Vehicle securing the
Receivable, that are or may be prior to or equal to the Lien granted by the
Receivable.
(i) No Default. Except for payment delinquencies continuing for a
period of not more than 30 days as of the Cutoff Date, to the knowledge of
Seller, no default, breach, violation or event permitting acceleration under the
terms of the Receivable exists and no continuing condition that with notice or
lapse of time, or both, would constitute a default, breach, violation or event
permitting acceleration under the terms of the Receivable has arisen.
4
9
(j) Insurance. The Receivable requires the Obligor to insure the
Financed Vehicle under a Physical Damage Insurance Policy, pay the premiums for
such insurance and keep such insurance in full force and effect.
(k) Good Title. It is the intention of Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from Seller
to Issuer and that the beneficial interest in and title to the Receivables not
be part of Seller's estate in the event of the filing of a bankruptcy petition
by or against Seller under any bankruptcy law. No Receivable has been sold,
transferred, assigned, or pledged by Seller to any Person other than Issuer.
Immediately prior to the transfer and assignment herein contemplated, Seller had
good and marketable title to the Receivable free and clear of any Lien and had
full right and power to transfer and assign the Receivable to Issuer and
immediately upon the transfer and assignment of the Receivable to Issuer, Issuer
shall have good and marketable title to the Receivable, free and clear of any
Lien; and Issuer's interest in the Receivable resulting from the transfer has
been perfected under the UCC.
(l) Obligations. Each Seller Affiliate has duly fulfilled all material
obligations on its part to be fulfilled under, or in connection with, the
Receivable.
(m) Possession. There is only one original executed Receivable, and
immediately prior to the Closing Date, Xxxxx Fargo will have possession of such
original executed Receivable.
(n) No Government Obligor. The Obligor on the Receivable is not the
United States of America or any state thereof or any local government, or any
agency, department, political subdivision or instrumentality of the United
States of America or any state thereof or any local government.
(o) Marking Records. By the Closing Date, Seller shall have caused the
portions of Seller's and each Seller Affiliate's electronic master record of
Motor Vehicle Loans relating to the Receivables to be clearly and unambiguously
marked to show that the Receivable is owned by Issuer in accordance with the
terms of this Agreement.
(p) No Assignment. As of the Closing Date, Seller shall not have taken
any action to convey any right to any Person that would result in such Person
having a right to payments received under the Insurance Policies or Dealer
Agreements, or payments due under the Receivable, that is senior to, or equal
with, that of Issuer.
(q) Lawful Assignment. The Receivable has not been originated in, and
is not subject to the laws of, any jurisdiction under which the sale, transfer
or assignment of such Receivable hereunder or pursuant to transfers of the Notes
or Certificates are unlawful, void or voidable. Neither Seller nor any Seller
Affiliate has entered into any agreement with any Obligor that prohibits,
restricts or conditions the assignment of any portion of the Receivables.
(r) Dealer Agreements. A Dealer Agreement for each Receivable is in
effect whereby the Dealer warrants title to the Motor Vehicle and indemnifies
the Seller Affiliate that is a party to said Dealer Agreement against the
unenforceability of each Receivable sold thereunder, and the rights of such
Seller Affiliate thereunder, with regard to the Receivable sold
5
10
hereunder, have been validly assigned to and are enforceable against the Dealer
by the Seller and then to and by the Issuer, along with any Dealer Recourse.
(s) Composition of Receivable. No Receivable has a Principal Balance
which includes capitalized interest or late charges.
(t) Database File. The information included with respect to each
Receivable in the database file delivered pursuant to Section 4.9(b) is accurate
and complete in all material respects.
SECTION 3.2. Representations and Warranties as to the Receivables in
the Aggregate. Seller hereby makes the following representations and warranties
as to the Receivables conveyed by it to Issuer hereunder on which Issuer shall
rely in acquiring the Receivables. Unless otherwise indicated, such
representations and warranties shall speak as of the Closing Date, but shall
survive the sale, transfer and assignment of the Receivables to Issuer and the
pledge thereof to Indenture Trustee pursuant to the Indenture.
(a) Amounts. The Original Pool Balance was $_______________.
(b) Aggregate Characteristics. The Receivables had the following
characteristics in the aggregate as of the Cutoff Date: (i) approximately ____%
of the Original Pool Balance was attributable to loans for purchases of new
Financed Vehicles, and approximately ____% of the Original Pool Balance was
attributable to loans for purchases of used Financed Vehicles; (ii)
approximately ____% of the Original Pool Balance was attributable to Receivables
the mailing addresses of the Obligors with respect to which are located in the
State of ________ and ____% of the Original Pool Balance was attributable to
Receivables the mailing addresses of the Obligors with respect to which are
located in the State of _____, ____% in the State of _______, ____% in the State
of ______, and ____% in the State of ______, and no other state accounts for
more than ____% of the Original Pool Balance; (iii) the weighted average
Contract Rate of the Receivables was _____%; (iv) there are _____ Receivables
being conveyed by Seller to Issuer; (v) the average Cutoff Date Principal
Balance of the Receivables was $______; and (vi) the weighted average original
term and weighted average remaining term of the Receivables were _____ months
and _____ months, respectively.
SECTION 3.3. Repurchase upon Breach. Seller, Servicer, Indenture
Trustee or Owner Trustee, as the case may be, shall inform the other parties to
this Agreement promptly, in writing, upon the discovery (or, with respect to the
Indenture Trustee or Owner Trustee, upon actual knowledge of a Responsible
Officer) of any breach or failure to be true of the representations or
warranties made by Seller in Section 3.1, provided that the failure to give such
notice shall not affect any obligation of Seller. If the breach or failure shall
not have been cured by the last day of the Collection Period which includes the
60th day (or if Seller elects, the 30th day) after the date on which Seller
becomes aware of, or receives written notice from Owner Trustee, Indenture
Trustee or Servicer of, such breach or failure, and such breach or failure
materially and adversely affects the interests of Issuer and the Holders in any
Receivable, Seller shall repurchase each such affected Receivable from Issuer as
of such last day of such Collection Period at a purchase price equal to the
Purchase Amount for such Receivable as of such last day of such Collection
Period. Notwithstanding the foregoing, any such breach or failure with
6
11
respect to the representations and warranties contained in Section 3.1 will not
be deemed to have such a material and adverse effect with respect to a
Receivable if the facts resulting in such breach or failure do not affect the
ability of Issuer to receive and retain payment in full on such Receivable. In
consideration of the repurchase of a Receivable hereunder, Seller shall remit
the Purchase Amount of such Receivable, no later than the close of business on
the next Deposit Date, in the manner specified in Section 5.4. The sole remedy
of Issuer, the Owner Trustee, the Indenture Trustee or the Holders with respect
to a breach or failure to be true of the representations or warranties made by
Seller pursuant to Section 3.1 shall be to require Seller to repurchase
Receivables pursuant to this Section.
SECTION 3.4. Custodian of Receivable Files.
(a) Custody. To assure uniform quality in servicing the Receivables and
to reduce administrative costs, Issuer, upon the execution and delivery of this
Agreement, revocably appoints Custodian, as agent, and Custodian accepts such
appointment, to act as agent on behalf of Issuer to maintain custody of the
following documents or instruments, which are hereby constructively delivered to
Issuer with respect to each Receivable (collectively, a "Receivable File"):
(i) the fully executed original of the Receivable;
(ii) any documents customarily delivered to or held by Seller
or Servicer evidencing the existence of any Physical Damage Insurance
Policies;
(iii) the original credit application, fully executed by the
Obligor;
(iv) the original certificate of title, or such other
documents as Xxxxx Fargo keeps on file, in accordance with its
customary procedures, evidencing the security interest of the
applicable Seller Affiliate in the Financed Vehicle;
(v) originals or true copies of all documents, instruments or
writings relating to extensions, amendments or waivers of the
Receivable; and
(vi) any and all other documents or electronic records that
Seller, any Seller Affiliate or Servicer, as the case may be, keeps on
file, in accordance with its customary procedures, relating to the
Receivable, any Insurance Policies, the Obligor or the Financed
Vehicle.
(b) Safekeeping. Servicer, in its capacity as Custodian, shall hold the
Receivable Files as agent on behalf of Issuer and maintain such accurate and
complete accounts, records and computer systems pertaining to each Receivable as
shall enable Servicer and Issuer to comply with the terms and provisions of this
Agreement applicable to them. In performing its duties as Custodian hereunder,
Custodian shall act with reasonable care, exercising the degree of skill,
attention and care that Custodian exercises with respect to receivable files
relating to other similar motor vehicle loans owned and/or serviced by Custodian
and that is consistent with industry standards. In accordance with its customary
practice with respect to its retail installment sale contracts, Custodian shall
conduct, or cause to be conducted, periodic audits of the Receivable Files held
by it under this Agreement, and of the related accounts, records, and
7
12
computer systems, and shall maintain the Receivable Files in such a manner as
shall enable Owner Trustee to verify, if Owner Trustee so elects, the accuracy
of the record keeping of Custodian. Custodian shall promptly report to Owner
Trustee any failure on its part to hold the Receivable Files and maintain its
accounts, records and computer systems as herein provided, and promptly take
appropriate action to remedy any such failure. Custodian hereby acknowledges
receipt of the Receivable File for each Receivable listed on the Schedule of
Receivables. Nothing herein shall be deemed to require Issuer, Owner Trustee or
Indenture Trustee to verify the accuracy of the record keeping of the Custodian.
(c) Maintenance of and Access to Records. Custodian shall maintain each
Receivable File at the location specified in Schedule B to this Agreement, or at
such other office of Custodian within the United States (or, in the case of any
successor Custodian, within the State in which its principal place of business
is located) as shall be specified to Issuer by 30 days' prior written notice. At
the reasonable direction of the Owner Trustee or Indenture Trustee, Custodian
shall make available to Owner Trustee, Indenture Trustee and their respective
agents (or, when requested in writing by Owner Trustee or Indenture Trustee,
their respective attorneys or auditors) the Receivable Files and the related
accounts, records and computer systems maintained by Custodian at such times
during the normal business hours of Custodian for purposes of inspecting,
auditing or making copies of abstracts of the same.
(d) Release of Documents. Upon written instructions from Indenture
Trustee (or, if no Notes are then Outstanding, Owner Trustee), Custodian shall
release any document in the Receivable Files to Indenture Trustee or Owner
Trustee or its respective agent or designee, as the case may be, at such place
or places as Indenture Trustee or Owner Trustee may designate, as soon
thereafter as is practicable. Any document so released shall be handled by
Indenture Trustee or Owner Trustee with due care and returned to Custodian for
safekeeping as soon as Indenture Trustee or Owner Trustee or its respective
agent or designee, as the case may be, shall have no further need therefor.
(e) Title to Receivables. Custodian agrees that, in respect of any
Receivable File held by Custodian hereunder, Custodian will not at any time have
or in any way attempt to assert any interest in such Receivable File or the
related Receivable, other than solely for the purpose of collecting or enforcing
the Receivable for the benefit of Issuer and that the entire equitable interest
in such Receivable and the related Receivable File shall at all times be vested
in Issuer.
(f) Instructions; Authority to Act. Custodian shall be deemed to have
received proper instructions with respect to the Receivable Files upon its
receipt of written instructions signed by an Authorized Officer of Indenture
Trustee or Owner Trustee, as applicable. A certified copy of excerpts of certain
resolutions of the Board of Directors of Indenture Trustee or Owner Trustee, as
applicable, shall constitute conclusive evidence of the authority of any such
Authorized Officer to act and shall be considered in full force and effect until
receipt by Custodian of written notice to the contrary given by Indenture
Trustee or Owner Trustee, as applicable.
(g) Custodian's Indemnification. Custodian shall indemnify and hold
harmless Issuer, Owner Trustee and Indenture Trustee, and each of their
respective officers, directors, employees and agents and the Holders from and
against any and all liabilities, obligations, losses,
8
13
compensatory damages, payments, costs or expenses (including legal fees if any)
of any kind whatsoever that may be imposed on, incurred or asserted against
Issuer, Owner Trustee, Indenture Trustee or the Holders as the result of any
failure of Custodian to perform its obligations hereunder or any negligent act
or omission of Custodian relating to the maintenance and custody of the
Receivable Files; provided that Custodian shall not be liable hereunder to the
Owner Trustee or Indenture Trustee to the extent that such liabilities,
obligations, losses, compensatory damages, payments, costs or expenses result
from the willful misfeasance, bad faith or negligence of Owner Trustee or
Indenture Trustee, as the case may be. Indemnification under this subsection (g)
shall survive termination of this Agreement and the resignation or removal of
Owner Trustee or Indenture Trustee, as the case may be. If Custodian shall have
made any indemnity payments to Owner Trustee or Indenture Trustee pursuant to
this Section and Owner Trustee or Indenture Trustee thereafter shall collect any
of such amounts from Persons other than Custodian, Owner Trustee or Indenture
Trustee, as the case may be, shall, as soon as practicable following such
receipt thereof, repay such amounts to Custodian, without interest.
(h) Effective Period and Termination. Servicer's appointment as
Custodian shall become effective as of the Cutoff Date and shall continue in
full force and effect until terminated pursuant to this subsection (h). If
Servicer shall resign as Servicer in accordance with Section 7.5 or if all of
the rights and obligations of Servicer shall have been terminated under Section
8.1, the appointment of Servicer as Custodian hereunder may be terminated by the
Owner Trustee or Indenture Trustee or by the Holders of Notes evidencing not
less than 50% of the aggregate Outstanding Amount of the Notes (or, if no Notes
are then Outstanding, the Holders of Certificates representing not less than 50%
of the Certificate Balance), in each case in the same manner as Owner Trustee or
Indenture Trustee or such Holders may terminate the rights and obligations of
Servicer under Section 8.1. The Indenture Trustee, at the direction of Holders
of Notes evidencing not less than 50% of the aggregate Outstanding Amount of the
Notes, or, if no Notes are then Outstanding, the Owner Trustee at the direction
of Holders of Certificates evidencing not less than 50% of the Certificate
Balance, may terminate Servicer's appointment as Custodian hereunder at any time
with cause. As soon as practicable after any termination of such appointment
Servicer shall deliver, or cause to be delivered, the Receivable Files to
Indenture Trustee or Owner Trustee, as applicable, or its respective agent or
designee at such place or places as Indenture Trustee or Owner Trustee, as
applicable, may reasonably designate. Notwithstanding any termination of
Servicer as Custodian hereunder (other than in connection with a termination
resulting from the termination of Servicer, as such, pursuant to Section 8.1),
from and after the date of such termination, and for so long as Servicer is
acting as such pursuant to this Agreement, Indenture Trustee shall provide, or
cause the successor Custodian to provide, access to the Receivable Files to
Servicer, at such times as Servicer shall reasonably request, for the purpose of
carrying out its duties and responsibilities with respect to the servicing of
the Receivables hereunder.
(i) Delegation. Custodian may, at any time without notice or consent,
delegate any or all of its duties under the Basic Documents to any Seller
Affiliate; provided that no such delegation shall relieve Custodian of its
responsibility with respect to such duties and Custodian shall remain obligated
and liable to Issuer and the Holders for its duties hereunder as if Custodian
alone were performing such duties.
9
14
ARTICLE IV.
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. Duties of Servicer.
(a) (i) Servicer is hereby authorized to act as agent for Issuer and in
such capacity shall manage, service, administer and make collections on the
Receivables (other than Purchased Receivables), and perform the other actions
required by Servicer under this Agreement, with reasonable care. Without
limiting the standard set forth in the preceding sentence, Servicer shall use a
degree of skill, attention and care that is not less than Servicer exercises
with respect to comparable Motor Vehicle Loans that it services for itself or
others and that is consistent with prudent industry standards. Servicer's duties
shall include the collection and posting of all payments, responding to
inquiries by Obligors on the Receivables, or by federal, state or local
governmental authorities, investigating delinquencies, sending payment coupons
or monthly invoices to Obligors, reporting required tax information to Obligors,
accounting for Collections, monitoring the status of Physical Damage Insurance
Policies with respect to the Financed Vehicles as provided in Section 4.4(a),
furnishing monthly and annual statements to Owner Trustee and Indenture Trustee
with respect to distributions, providing collection and repossession services in
the event of Obligor default and performing the other duties specified herein.
(ii) In accordance with its customary servicing procedures, Servicer
shall also administer and enforce all rights and responsibilities of the holder
of the Receivables provided for in the Physical Damage Insurance Policies as
provided in Section 4.4 and the Dealer Agreements. Without limiting the
generality of the foregoing, Servicer is hereby authorized and empowered by
Issuer to execute and deliver, on behalf of itself, Indenture Trustee, Issuer,
Owner Trustee and the Holders, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables or to the Financed
Vehicles, all in accordance with this Agreement; provided that notwithstanding
the foregoing, Servicer shall not, except pursuant to an order from a court of
competent jurisdiction, release an Obligor from payment of any unpaid amount
under any Receivable or waive the right to collect the unpaid balance of any
Receivable from the Obligor, except in connection with a de minimis deficiency
which Servicer would not attempt to collect in accordance with its customary
procedures. If Servicer shall commence a legal proceeding to enforce a
Receivable, Issuer shall thereupon be deemed to have automatically assigned such
Receivable to Servicer, which assignment shall be solely for purposes of
collection.
(b) Servicer may, at any time without notice (except that Servicer
shall give written notice to each Rating Agency of any delegation outside the
ordinary course of business of the substantial portion of its servicing
business) or consent, delegate (i) any or all duties under this Agreement to any
Person more than 50% of the voting securities of which are owned, directly or
indirectly, by Xxxxx Fargo & Company, so long as Xxxxx Fargo acts as Servicer,
or (ii) specific duties to sub-contractors who are in the business of performing
such duties; provided that no such delegation shall relieve Servicer of its
responsibility with respect to such duties and Servicer shall remain obligated
and liable to Issuer and the Holders for servicing and administering the
Receivables in accordance with this Agreement as if Servicer alone were
performing such duties.
10
15
SECTION 4.2. Collection of Receivable Payments.
(a) Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due, and otherwise act with respect to the Receivables, the
Physical Damage Insurance Policies, the Dealer Agreements and related property
in such manner as will, in the reasonable judgment of Servicer, maximize the
amount to be received by Issuer with respect thereto, in accordance with the
standard of care required by Section 4.1. Servicer shall be entitled to amend or
modify any Receivable in accordance with its customary procedures if Servicer
believes in good faith that such amendment or modification is in Issuer's best
interests; provided that Servicer may not, unless ordered by a court of
competent jurisdiction or otherwise required by applicable law, (i) extend a
Receivable beyond the Final Scheduled Maturity Date or (ii) reduce the Principal
Balance or Contract Rate of any Receivable. If Servicer fails to comply with the
provisions of the preceding sentence, Servicer shall be required to purchase the
Receivable or Receivables affected thereby, for the Purchase Amount, in the
manner specified in Section 4.7 as of the last day of the Collection Period in
which such failure occurs. Servicer may, in its discretion (in accordance with
its customary standards, policies and procedures), waive any prepayment charge,
late payment charge, extension fee or any other fee that may be collected in the
ordinary course of servicing a Receivable.
(b) If in the course of collecting payments under the Receivables,
Servicer determines to set off any obligation of Servicer to an Obligor against
an amount payable by the Obligor with respect to such Receivable, Servicer shall
deposit the amount so set off in the Collection Account, no later than the close
of business on the Deposit Date for the Collection Period in which the set-off
occurs. All references herein to payments or Liquidation Proceeds collected by
Servicer shall include amounts set-off by Servicer.
SECTION 4.3. Realization upon Receivables. On behalf of Issuer,
Servicer shall charge off a Receivable in accordance with its customary
standards (and, in no event later than 120 days after a Receivable shall have
become delinquent) and shall use reasonable efforts to repossess and liquidate
the Financed Vehicle securing any Defaulted Receivable as soon as feasible after
such Receivable becomes a Defaulted Receivable, in accordance with the standard
of care required by Section 4.1. In taking such action, Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of Motor Vehicle Loans, and as are otherwise
consistent with the standard of care required under Section 4.1, which shall
include exercising any rights under the Dealer Agreements and selling the
Financed Vehicle at public or private sale. Servicer shall be entitled to
recover all reasonable expenses incurred by it in the course of repossessing and
liquidating a Financed Vehicle into cash proceeds or pursuing any deficiency
claim against the related Obligor, but only out of the cash proceeds of such
Financed Vehicle or any deficiency obtained from the Obligor. The foregoing
shall be subject to the provision that, in any case in which a Financed Vehicle
shall have suffered damage, Servicer shall not expend funds in connection with
the repair or the repossession of such Financed Vehicle unless it shall
determine in its discretion that such repair and/or repossession will increase
the Liquidation Proceeds of the related Receivable by an amount equal to or
greater than the amount of such expenses.
11
16
If Servicer elects to commence a legal proceeding to enforce a Dealer
Agreement, the act of commencement shall be deemed to be an automatic assignment
from Issuer to Servicer of the rights under such Dealer Agreement. Such
assignment shall be solely for purposes of collection. If, however, in any
enforcement suit or legal proceeding, it is held that Servicer may not enforce a
Dealer Agreement on the grounds that it is not a real party in interest or a
Person entitled to enforce the Dealer Agreement, Owner Trustee, on behalf of
Issuer, at Servicer's expense, or Seller, at Servicer's expense, shall take such
steps as Servicer deems necessary to enforce the Dealer Agreement, including
bringing suit in Issuer's name or the name of Owner Trustee or Indenture
Trustee.
SECTION 4.4. Physical Damage Insurance.
(a) The Receivables require that each Financed Vehicle be insured under
a Physical Damage Insurance Policy. Servicer shall monitor or cause to be
monitored, the status of such physical damage insurance coverage to the extent
consistent with its customary servicing procedures. If Servicer shall determine
that an Obligor has failed to obtain or maintain a Physical Damage Insurance
Policy covering the related Financed Vehicle, Servicer shall use reasonable
efforts in accordance with its customary servicing procedures to enforce the
rights of the holder of the Receivable under the Receivable to require the
Obligor to obtain such physical damage insurance, provided that Servicer shall
not be required to take such actions if there is in place a lender's single
interest policy with respect to the related Financed Vehicle that complies with
Servicer's customary requirements. [It is understood that Servicer will not
"force-place" any Physical Damage Insurance Policy on any Financed Vehicle] [TO
BE CONFIRMED].
(b) Servicer may xxx to enforce or collect upon the Physical Damage
Insurance Policies, in its own name, if possible, or as agent for Issuer. If
Servicer elects to commence a legal proceeding to enforce a Physical Damage
Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of Issuer under such Physical Damage Insurance Policy
to Servicer for purposes of collection only. If, however, in any enforcement
suit or legal proceeding it is held that Servicer may not enforce a Physical
Damage Insurance Policy on the grounds that it is not a real party in interest
or a holder entitled to enforce the Physical Damage Insurance Policy, Owner
Trustee, on behalf of Issuer, at Servicer's expense, or Seller, at Servicer's
expense, shall take such steps as Servicer deems necessary to enforce such
Physical Damage Insurance Policy, including bringing suit in Issuer's name or
the name of Owner Trustee or Indenture Trustee. Servicer shall make all claims
and enforce its rights under any lender's single interest insurance policy (to
the extent such claims or rights relate to Receivables) for the benefit of the
Issuer and shall treat as Collections all related proceeds of such policies.
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles.
Servicer, in accordance with the standard of care required under Section 4.1,
shall take such reasonable steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle for
the benefit of Issuer and the Indenture Trustee. Issuer hereby authorizes
Servicer, and Servicer hereby agrees, to take such reasonable steps as are
necessary to re-perfect such security interest on behalf of Issuer in the event
Servicer receives notice of the relocation of a Financed Vehicle. If there has
been a Servicer Termination Event, Seller and Servicer, at their expense, shall
promptly and duly execute and deliver such documents and
12
17
instruments, and take such other reasonable actions as may be necessary, as
evidenced by an Opinion of Counsel delivered to Issuer, Owner Trustee and
Indenture Trustee to perfect Issuer's and Indenture Trustee's interest in the
Trust Property against all other Persons, including the delivery of the
Receivables and the Receivable Files to Indenture Trustee (or Owner Trustee if
no Notes are then Outstanding) its agent or designee, the endorsement and
delivery of the Physical Damage Insurance Policies or the notification of the
insurers thereunder, the execution of transfer instruments, and the endorsement
to Indenture Trustee (or Owner Trustee if no Notes are then Outstanding) and the
delivery of the certificates of title to the Financed Vehicles to the
appropriate department or departments of motor vehicles (or other appropriate
governmental agency).
SECTION 4.6. Covenants of Servicer. Servicer makes the following
covenants on which Issuer relies in acquiring the Receivables:
(a) Security Interest to Remain in Force. Servicer shall not release
any Financed Vehicle from the security interest granted by the related
Receivable in whole or in part, except upon payment in full of the Receivable or
as otherwise contemplated herein.
(b) No Impairment. Servicer shall not impair in any material respect
the rights of the Issuer or the Holders in the Receivables, the Dealer
Agreements or the Physical Damage Insurance Policies or, subject to clause (c),
otherwise amend or alter the terms thereof if, as a result of such amendment or
alteration, the interests of Issuer and the Holders hereunder would be
materially adversely affected.
(c) Amendments. Servicer shall not amend or otherwise modify any
Receivable (including the grant of any extension thereunder), except in
accordance with Section 4.2.
SECTION 4.7. Purchase by Servicer upon Breach. Seller, Servicer,
Indenture Trustee or Owner Trustee, as the case may be, shall inform the other
parties promptly, in writing, upon the discovery (or, in the case of the
Indenture Trustee or Owner Trustee, upon actual knowledge of a Responsible
Officer) of any breach by Servicer of its covenants under Section 4.5 or 4.6;
provided that the failure to give such notice shall not affect any obligation of
Servicer. Unless the breach shall have been cured by the last day of the
Collection Period which includes the 60th day (or the 30th day, if Servicer so
elects) after the date on which Servicer becomes aware of, or receives written
notice of, such breach, and such breach materially and adversely affects the
interests of Issuer and the Holders in any Receivable, Servicer shall purchase
such Receivable from Issuer as of the last day of the Collection Period at a
purchase price equal to the Purchase Amount for such Receivable as of the last
day of such Collection Period; provided that in the case of a breach of the
covenant contained in Section 4.6(c), Servicer shall be obligated to purchase
the affected Receivable or Receivables on the Deposit Date immediately
succeeding the Collection Period during which Servicer becomes aware of, or
receives written notice of, such breach. In consideration of the purchase of a
Receivable hereunder, Servicer shall remit the Purchase Amount of such
Receivable in the manner specified in Section 5.4. The sole remedy of Issuer,
Owner Trustee, Indenture Trustee or the Holders against Servicer with respect to
a breach pursuant to Section 4.5 or 4.6 shall be to require Servicer to
repurchase Receivables pursuant to this Section.
13
18
SECTION 4.8. Servicing Fee. The servicing fee for (a) the _____________
[ ], 200_ Payment Date shall equal _______ and (b) for each Payment Date
thereafter shall equal the product of (i) one-twelfth, (ii) the Servicing Fee
Rate and (iii) the Pool Balance as of the opening of business on the first day
of the related Collection Period (the "Servicing Fee"). Servicer shall also be
entitled to retain any late fees, extension fees, prepayment charges (including,
in the case of any Rule of 78's Receivable or Sum of Periodic Balances
Receivable that is prepaid in full, amounts received in excess of the
outstanding Principal Balance of such Receivable and accrued interest thereon
calculated as if such Receivable were an Actuarial Receivable) and certain non-
sufficient funds charges and other administrative fees or similar charges
allowed by applicable law with respect to Receivables collected (from whatever
source) on the Receivables (the "Supplemental Servicing Fee"). It is understood
and agreed that Available Interest or Available Principal shall not include any
amounts retained by Servicer which constitute Supplemental Servicing Fees. The
Servicing Fee in respect of a Collection Period (together with any portion of
the Servicing Fee that remains unpaid from prior Payment Dates), if the Rating
Agency Condition is satisfied, may be paid at the beginning of such Collection
Period out of Collections for such Collection Period. As provided in Section
5.5(c), as additional compensation, Servicer shall be entitled to receive on
each Payment Date, any Additional Servicing for such Payment Date.
SECTION 4.9. Servicer's Report.
(a) On each Determination Date, Servicer shall deliver to Owner
Trustee, Indenture Trustee, each Paying Agent and Seller, with a copy to the
Rating Agencies, a Servicer's Report for the immediately preceding Collection
Period, substantially in the form of Exhibit A, containing all information
necessary to make the transfers and distributions pursuant to Sections 5.4, 5.5
and 5.8 on the next Payment Date, together with all information necessary for
the Owner Trustee to send statements to Certificateholders pursuant to Section
5.6 and Indenture Trustee to send copies of statements received by the Indenture
Trustee to Noteholders pursuant to the Indenture and Section 5.6 of this
Agreement. Receivables to be purchased by Servicer or to be repurchased by
Seller shall be identified by Servicer by account number with respect to such
Receivable (as specified in the Schedule of Receivables).
(b) Servicer shall provide Indenture Trustee with a database file for
the Receivables at or prior to the Closing Date (but with information as of the
close of business on the Cutoff Date).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
(a) Servicer shall deliver to Owner Trustee, Indenture Trustee and each
Rating Agency, on or before _________ of each year beginning on ________ [ ],
200_, an Officer's Certificate, dated as of ___________ [ ] of the preceding
year, stating that (i) a review of the activities of Servicer during the
preceding 12- month period (or, in the case of the first such report, during the
period from the Closing Date to ____________ [ ], 200_) and of its performance
under this Agreement has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, Servicer has
fulfilled all its obligations in all material respects under this Agreement
throughout such year or, if there exists any uncured default in the fulfillment
of any such obligation, specifying each such default known to such
14
19
officer and the nature and status thereof. A copy of such certificate and the
report referred to in Section 4.11 may be obtained by any Certificateholder by a
request in writing to Owner Trustee addressed to the Corporate Trust Office or
by any Noteholder by a request in writing to Indenture Trustee addressed to the
Corporate Trust Office. Upon the written request of Owner Trustee, Indenture
Trustee will promptly furnish Owner Trustee a list of Noteholders as of the date
specified by Owner Trustee.
(b) Servicer shall deliver to Owner Trustee, Indenture Trustee and the
Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than five (5) Business Days thereafter, written notice in an
Officer's Certificate of any event which constitutes, or with the giving of
notice or lapse of time, or both, would become a Servicer Termination Event
under Section 8.1.
SECTION 4.11. Annual Independent Certified Public Accountants' Report.
(a) The Servicer shall cause a firm of independent certified public accountants
(who may also render other services to the Servicer or Seller) to deliver to the
Seller, Owner Trustee, Indenture Trustee and each Rating Agency on or before
April 30 of each year beginning on ___________________, a report to the effect
that such firm has examined the Servicer's assertion that it has complied with
the [minimum servicing standards set forth in the Mortgage Banker's Association
of America's Uniform Single Attestation Program for Mortgage Bankers ("USAP")]
for the twelve months ended December 31 of the preceding year (or, in the case
of the first such certificate, from the Closing Date until December 31, 200_),
and that such examination (1) included tests relating to the servicing or
administration of the Receivables in accordance with the requirements of the
[USAP], to the extent the procedures in such program apply to the servicing or
administration of the Receivables and (2) except as described in the report,
disclosed no exceptions or errors in the records relating to the servicing or
administration of the Receivables that, in the firm's opinion, paragraph six of
such program requires such firm to report. (b) In the event such firm requires
the Indenture Trustee or Owner Trustee to agree to the procedures performed by
such firm, Servicer shall direct the Indenture Trustee or Owner Trustee, as the
case may be, in writing to so agree; it being understood and agreed that the
Indenture Trustee or Owner Trustee, as the case may be, will deliver such letter
of agreement in conclusive reliance upon the direction of Servicer, and the
Indenture Trustee or Owner Trustee, as the case may be, need not make any
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.
(c) Such report will also indicate that the firm is independent of
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables. Servicer shall provide to the Certificateholders, Noteholders, Bank
Regulatory Authorities, and the supervisory agents and examiners of Bank
Regulatory Authorities access to the Receivable Files in such cases where the
Certificateholders, Noteholders or Bank Regulatory Authorities shall be required
by applicable statutes or regulations to review such documentation as
demonstrated by evidence satisfactory to Servicer in its reasonable judgment.
Access shall be
15
20
afforded without charge, but only upon reasonable request and during the normal
business hours at the respective offices of Servicer. Nothing in this Section
shall affect the obligation of Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors and the failure of
Servicer to provide access to information as a result of such obligation shall
not constitute a breach of this Section. Any Holder, by its acceptance of a
Certificate or Note, as applicable, shall be deemed to have agreed to keep any
information obtained by it pursuant to this Section confidential and not to use
such information for any other purpose, except as required by applicable law.
SECTION 4.13. Reports to the Commission. Servicer shall, on behalf of
the Issuer, cause to be filed with the Commission any periodic reports required
to be filed under the provisions of the Exchange Act, and the rules and
regulations of the Commission thereunder. Seller shall, at its expense,
cooperate in any reasonable request made by Servicer in connection with such
filings.
SECTION 4.14. Reports to the Rating Agencies. Servicer shall deliver to
each Rating Agency a copy of all reports or notices furnished or delivered
pursuant to this Article and a copy of any amendments, supplements or
modifications to this Agreement and any other information reasonably requested
by such Rating Agency to monitor this transaction.
SECTION 4.15. Servicer Expenses. Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of the Owner Trustee, Indenture Trustee, independent
accountants, taxes imposed on Servicer and expenses incurred in connection with
distributions and reports to Certificateholders and Noteholders.
ARTICLE V.
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS
TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.1. Establishment of Trust Accounts.
(a) Servicer shall cause to be established:
(i) For the benefit of the Noteholders and the
Certificateholders, in the name of Indenture Trustee, an Eligible
Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(ii) For the benefit of the Noteholders, in the name of
Indenture Trustee, an Eligible Deposit Account (the "Note Distribution
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders.
(iii) For the benefit of the Noteholders and the
Certificateholders, in the name of Indenture Trustee, an Eligible
Deposit Account (the "Payahead Account"), bearing a
16
21
designation clearly indicating that the funds therein are held for the
benefit of the Noteholders and the Certificateholders.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account, the Payahead Account and the Reserve Account (collectively the "Trust
Accounts") and the Certificate Distribution Account shall be invested by
Indenture Trustee with respect to the Trust Accounts (or any custodian with
respect to funds on deposit in any such account) in Eligible Investments
selected in writing by Servicer (pursuant to standing instructions or
otherwise); provided that it is understood and agreed that neither Servicer,
Indenture Trustee nor Owner Trustee shall be liable for any loss arising from
such investment in Eligible Investments. All such Eligible Investments shall be
held by or on behalf of Indenture Trustee for the benefit of the Noteholders and
the Certificateholders; provided that on each Payment Date all interest and
other investment income (net of losses and investment expenses) on funds on
deposit in the Trust Accounts shall be distributed to Seller and shall not be
available to pay the distributions provided for in Section 5.5 and shall not
otherwise be subject to any claims or rights of Holders. Other than as permitted
by the Rating Agencies, funds on deposit in the Trust Accounts shall be invested
in Eligible Investments that will mature so that such funds will be available at
the close of business on the Deposit Date preceding the next Payment Date. No
Eligible Investment shall be sold or otherwise disposed of prior to its
scheduled maturity unless a default occurs with respect to such Eligible
Investment and Servicer directs Indenture Trustee in writing to dispose of such
Eligible Investment. Funds deposited in a Trust Account on a Deposit Date which
immediately precedes a Payment Date upon the maturity of any Eligible
Investments are not required to be (but are permitted to be) invested overnight.
(c) Indenture Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Trust Accounts and in all proceeds
thereof (excluding investment income thereon as provided in Section 5.1(e)) and
all such funds, investments and proceeds shall be part of the Owner Trust
Estate. Except as otherwise provided herein, the Trust Accounts shall be under
the sole dominion and control of Indenture Trustee for the benefit of the
Noteholders and the Certificateholders; provided, however, the Indenture Trustee
shall not be charged with any obligation for the benefit of the
Certificateholders except as provided by the terms of this Agreement. If, at any
time, any of the Trust Accounts or the Certificate Distribution Account ceases
to be an Eligible Deposit Account, Indenture Trustee (or Servicer on its behalf)
or Owner Trustee, as applicable, shall within 10 Business Days (or such longer
period as to which each Rating Agency may consent) establish a new Trust Account
or Certificate Distribution Account, as applicable, as an Eligible Deposit
Account and shall transfer any cash and/or any investments to such new Trust
Account or new Certificate Distribution Account, as applicable. In connection
with the foregoing, Servicer agrees that, in the event that any of the Trust
Accounts are not accounts with Indenture Trustee, Servicer shall notify
Indenture Trustee in writing promptly upon any of such Trust Accounts ceasing to
be an Eligible Deposit Account.
(d) With respect to the Trust Account Property, the Indenture Trustee
agrees, by its respective acceptance hereof, that:
(i) any Trust Account Property that is held in deposit
accounts shall be held solely in Eligible Deposit Accounts and, except
as otherwise provided herein, each such Eligible Deposit Account shall
be subject to the exclusive custody and control of
17
22
Indenture Trustee with respect to the Trust Accounts, and, except as
otherwise provided in the Basic Documents, Indenture Trustee shall have
sole signature authority with respect thereto;
(ii) any Trust Account Property that constitutes Physical
Property shall be delivered to Indenture Trustee, in accordance with
paragraph (a) of the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by Indenture Trustee, or a
financial intermediary (as such term is defined in Section 8-313(4) of
the UCC) acting solely for Indenture Trustee;
(iii) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by Indenture Trustee
pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such
paragraph; and
(iv) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause
(iii) above shall be delivered to Indenture Trustee in accordance with
paragraph (c) of the definition of "Delivery" and shall be maintained
by Indenture Trustee pending maturity or disposition, through continued
registration of Indenture Trustee's (or its nominee's) ownership of
such security.
(e) Investment earnings attributable to the Trust Account shall be held
by Indenture Trustee for the benefit of Seller. Investment earnings attributable
to the Trust Account shall not be available to pay the distributions provided
for in Section 5.5 and shall not otherwise be subject to any claims or rights of
the Holders or Servicer. Indenture Trustee shall cause all investment earnings
attributable to the Reserve Account to be distributed on each Payment Date to
Seller.
Effective upon Delivery of any Trust Account Property, Indenture Trustee shall
be deemed to have represented that it has purchased such Trust Account Property
for value, in good faith and without notice of any adverse claim thereto.
SECTION 5.2. Collections.
(a) Servicer shall remit within two Business Days of receipt thereof to
the Collection Account all payments by or on behalf of the Obligors with respect
to the Receivables (other than any amounts constituting Supplemental Servicing
Fees) and all Liquidation Proceeds, both as collected during the Collection
Period. Notwithstanding the foregoing, if Xxxxx Fargo is the Servicer and (i)
shall have the Required Rating or (ii) Indenture Trustee otherwise shall have
received written notice from each of the Rating Agencies that the then
outstanding rating on the Notes or the Certificates would not be lowered or
withdrawn as a result, Servicer may deposit all amounts referred to above for
any Collection Period into the Collection Account not later than the close of
business on the Deposit Date with respect to such Collection Period; provided
that (i) if a Servicer Termination Event has occurred and is continuing, (ii)
Servicer has been terminated as such pursuant to Section 8.1 or (iii) Servicer
ceases to have the Required Rating, Servicer
18
23
shall deposit such amounts (including any amounts then being held by Servicer)
into the Collection Account as provided in the preceding sentence. For purposes
of this Article V the phrase "payments by or on behalf of Obligors" shall mean
payments made with respect to the Receivables by Persons other than Servicer,
Seller or any Seller Affiliate.
(b) With respect to each Receivable (other than a Purchased Receivable
or a Precomputed Receivable), collections and payments by or on behalf of the
Obligor (other than any amounts constituting Supplemental Servicing Fees) for
each Collection Period shall be applied to interest and principal in accordance
with the Simple Interest Method, as applied by Servicer. Any excess shall be
applied to prepay the Receivable. All Liquidation Proceeds shall be treated as
Interest Collections.
(c) With respect to each Precomputed Receivable, collections and
payments by or on behalf of an Obligor (other than any amounts constituting
Supplemental Servicing Fees) for each Collection Period shall be applied to the
scheduled payments due on such Precomputed Receivable for such Collection
Period. To the extent such collections and payments on a Precomputed Receivable
during a Collection Period exceed the scheduled payment on such Precomputed
Receivable and are insufficient to prepay the Precomputed Receivable in full,
collections shall be treated as Payaheads until such later Collection Period as
such Payaheads may be transferred to the Collection Account and applied either
to the scheduled payments due or to prepay the Precomputed Receivable in full in
accordance with Section 5.5.
SECTION 5.3. [Reserved].
SECTION 5.4. Additional Deposits. Servicer and Seller shall deposit or
cause to be deposited in the Collection Account the aggregate Purchase Amounts
with respect to Purchased Receivables and Seller or Servicer shall deposit
therein all amounts, if any, to be paid under Section 9.1. All such deposits
shall be made not later than the Deposit Date following the end of the related
Collection Period.
SECTION 5.5. Distributions.
(a) On each Determination Date, Servicer shall calculate all amounts
required to determine the amounts to be deposited on the related Payment Date
from the Reserve Account and the Payahead Account into the Collection Account
and from the Collection Account into the Note Distribution Account, the
Certificate Distribution Account and the Payahead Account.
(b) On or before each Payment Date, Servicer shall instruct Indenture
Trustee in writing (based on the information contained in the Servicer's Report
delivered on the related Determination Date pursuant to Section 4.9) to, and the
Indenture Trustee shall:
(i) withdraw from the Payahead Account and deposit in the
Collection Account, in immediately available funds, (x) with respect to
each Precomputed Receivable for which the payments made by or on behalf
of the Obligor for the related Collection Period are less than the
scheduled payment for the related Collection Period, the amount of
Payaheads, if any, made with respect to such Receivable which, when
added to the amount of such payments, is equal to the amount of such
scheduled payment, (y) with respect to each Precomputed Receivable for
which prepayments
19
24
insufficient to prepay the Receivable in full have been made by or on
behalf of the Obligor for the related Collection Period, the amount of
Payaheads, if any, made with respect to such Receivable which, when
added to the amount of such prepayments, is equal to an amount
sufficient to prepay such Receivable in full, and (z) the amount of all
Payaheads, if any, made with respect to any Purchased Receivable;
(ii) withdraw from the Collection Account and deposit in the
Payahead Account (or receive from the Servicer, which will remit to the
Indenture Trustee for deposit in the Payahead Account, as the case may
be), in immediately available funds, the aggregate amount of
Collections on Precomputed Receivables treated as Payaheads pursuant to
Section 5.2 for the Collection Period related to such Payment Date; and
(iii) withdraw from the Reserve Account and deposit in the
Collection Account the Reserve Account Transfer Amount, if any, for
such Payment Date.
(c) Subject to the last paragraph of this Section 5.5(c), on each
Payment Date, Servicer shall instruct Indenture Trustee in writing (based on the
information contained in the Servicer's Report delivered on the related
Determination Date pursuant to Section 4.9) to make, and Indenture Trustee shall
make, the following deposits and distributions from the Collection Account for
deposit in the applicable account by 11:00 a.m. (New York time), to the extent
of the Total Distribution Amount, in the following order of priority:
(i) to Servicer, from the Total Distribution Amount, the
Servicing Fee for the related Collection Period and all accrued and
unpaid Servicing Fees for prior Collection Periods;
(ii) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clause (i), the
Noteholders' Interest Distributable Amount;
(iii) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clause (i) and
clause (ii), the Certificateholders' Interest Distributable Amount;
(iv) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clause (i)
through clause (iii), the Noteholders' Principal Distributable Amount;
(v) to the Note Distribution Account (or, if the Outstanding
Amount of the Notes has been reduced to zero, to the Certificate
Distribution Account) for distribution in respect of principal, from
the Total Distribution Amount remaining after the application of clause
(i) through clause (iv), the lesser of (A) such remaining Total
Distribution Amount and (B) the Regular Principal Distributable Amount
for such Payment Date;
(vi) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (i)
through (v), the Certificateholders' Principal Distributable Amount;
20
25
(vii) to the Reserve Account, from the Total Distribution
Amount remaining after the application of clauses (i) through (vi), the
lesser of (A) such remaining Total Distribution Amount and (B) the
amount necessary to cause the amount on deposit in the Reserve Account
to equal the Specified Reserve Account Balance;
(viii) to the Servicer, Additional Servicing for such Payment
Date; and
(ix) to Seller, any amounts remaining.
Notwithstanding the foregoing, following the occurrence and during the
continuation of an Event of Default which has resulted in an acceleration of the
Notes, the Total Distribution Amount remaining after the application of clause
(i) and (ii) above will be deposited in the Note Distribution Account to the
extent necessary to reduce the principal amount of the Notes to zero in
accordance with and in the priority set forth in Section 5.4 of the Indenture,
and the Certificateholders will not receive any distributions until the
principal amount and accrued interest on the Notes have been paid in full. In
the event that the Collection Account is maintained with an institution other
than Indenture Trustee, Indenture Trustee shall instruct and cause such
institution to make all deposits and distributions pursuant to this Section
5.5(c) on the related Deposit Date.
(d) Indenture Trustee shall continue to perform its duties under this
Agreement after the Outstanding Amount of the Notes has been reduced to zero and
the Indenture has been discharged in accordance with its terms. The protections,
immunities and standard of care afforded the Indenture Trustee under the
Indenture shall apply to the performance of its duties hereunder.
SECTION 5.6. Statements to Certificateholders and Noteholders. On each
Determination Date, Servicer shall provide to Indenture Trustee (with a copy to
each Rating Agency) written instructions for Indenture Trustee to forward to
each Noteholder of record, to each Paying Agent, if any, and to Owner Trustee
for Owner Trustee to forward to each Certificateholder of record, a statement
substantially in the form of Exhibit A setting forth at least the following
information as to the Notes and the Certificates to the extent applicable:
(a) the amount of such distribution allocable to principal of each
class of Notes and to the Certificate Balance of the Certificates;
(b) the amount of such distribution allocable to interest on or with
respect to each class of Notes and to the Certificates;
(c) the Pool Balance as of the close of business on the last day of the
preceding Collection Period;
(d) the aggregate outstanding principal balance of each class of the
Notes, the Note Pool Factor for each such class, the Certificate Balance and the
Certificate Pool Factor after giving effect to payments allocated to principal
reported under clause (a) above;
(e) the amount of the Servicing Fee paid to Servicer with respect to
the related Collection Period and with respect to previously accrued and unpaid
Servicing Fees;
21
26
(f) the amount of the aggregate Realized Losses, if any, for such
Collection Period;
(g) the Reserve Account Transfer Amount, if any, for such Payment Date,
the Specified Reserve Account Balance for such Payment Date, the amount
distributed to Seller from the Reserve Account on such Payment Date, and the
balance of the Reserve Account (if any) on such Payment Date, after giving
effect to changes therein on such Payment Date;
(h) the Noteholders' Interest Carryover Shortfall, the
Certificateholders' Interest Carryover Shortfall, the Noteholders' Principal
Carryover Shortfall, and the Certificateholders' Principal Carryover Shortfall,
if any, in each case as applicable to each class of Securities, and the change
in such amounts from the preceding statement;
(i) the Additional Principal Distributable Amount for such Payment
Date;
(j) the aggregate Purchase Amounts paid by Seller or Servicer with
respect to the related Collection Period; and
(k) the number, and aggregate Principal Balance outstanding, of
Receivables past due 30-59, 60-89 and 90 and over 90 days.
Each amount set forth pursuant to paragraph (a), (b), (e) or (h) above shall be
expressed as a dollar amount per $1,000 of the initial principal balance of the
Notes (or class thereof) or the initial Certificate Balance, as applicable.
SECTION 5.7. Net Deposits. As an administrative convenience, unless
Servicer is required to remit Collections within two Business Days of receipt
thereof, Servicer will be permitted to make the deposit of Collections and
Purchase Amounts for or with respect to the Collection Period net of
distributions to be made to Servicer with respect to the Collection Period.
Servicer, however, will account to Owner Trustee, Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
SECTION 5.8. Reserve Account.
(a) Seller shall establish and maintain in the name of the Indenture
Trustee, as agent for the Issuer, the Noteholders and Certificateholders, an
Eligible Deposit Account (the "Reserve Account"). The Reserve Account shall be
initially established and maintained with the Indenture Trustee (the "Securities
Intermediary"). On the Closing Date, Seller shall deposit or cause to be
deposited in the Reserve Account an amount equal to the Reserve Account Deposit.
(b) Indenture Trustee shall, at the written direction of Servicer,
direct the Securities Intermediary to invest funds on deposit in the Reserve
Account in Eligible Investments selected by Servicer and confirmed in writing by
Servicer to Indenture Trustee; provided that it is understood and agreed that
none of Indenture Trustee, Securities Intermediary, Servicer or Issuer shall be
liable for any loss arising from such investment in Eligible Investments. Funds
on deposit in the Reserve Account shall be invested in Eligible Investments that
will mature so that all such funds will be available at the close of business on
each Deposit Date; provided that to the extent permitted by the Rating Agencies
following written request by Servicer, funds on deposit in the Reserve Account
may be invested in Eligible Investments that mature later than
22
27
the next Deposit Date. Funds deposited in the Reserve Account on a Deposit Date
upon the maturity of any Eligible Investments are not required to be (but may
be) invested overnight.
(c) The Securities Intermediary hereby expressly agrees with the
Indenture Trustee that: (i) all matters relating to the Reserve Account shall be
governed by the laws of the State of ___________; (ii) all Eligible Investments
held by the Securities Intermediary on behalf of the Indenture Trustee in the
Reserve Account shall be treated as "financial assets" (as defined in Article 8
of the _________________ Uniform Commercial Code; (iii) the Securities
Intermediary will treat the Indenture Trustee as entitled to exercise the rights
comprising the investments or financial assets credited to the Reserve Account;
(iv) the financial assets credited to the Reserve Account shall not be
registered in the name of, payable to the order of, or specially indorsed to the
Indenture Trustee; and (v) the Securities Intermediary will not agree to comply
with entitlement orders originated by any Person with respect to the investments
or financial assets held in the Reserve Account other than the Indenture
Trustee.
(d) The Reserve Account shall be under the sole custody and control of
Indenture Trustee. If, at any time, the Reserve Account ceases to be an Eligible
Deposit Account, Indenture Trustee shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Reserve Account as an Eligible Deposit Account and
shall transfer or cause to be transferred any cash and/or any investments that
are in the existing account which is no longer an Eligible Deposit Account to
such new Reserve Account.
(e) Amounts on deposit in the Reserve Account will be released to
Seller on each Payment Date to the extent that the amount credited to the
Reserve Account would exceed the Specified Reserve Account Balance. Upon any
distribution to Seller of amounts from the Reserve Account, the Holders will not
have any rights in, or claims to, such amounts. Amounts distributed to Seller
from the Reserve Account in accordance with this Section shall not be available
under any circumstances to Issuer, Owner Trustee, Indenture Trustee or the
Holders and Seller shall in no event thereafter be required to refund any such
distributed amounts.
(f) With respect to the Reserve Account Property, Seller, Issuer and
the Indenture Trustee agree that the Reserve Account Deposit and all other funds
and Reserve Account Property shall be delivered to Indenture Trustee for credit
to the Reserve Account. In addition:
(i) any Reserve Account Property that constitutes Physical
Property shall be delivered to Indenture Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by Indenture Trustee or a
financial intermediary (as such term is defined in Section 8-313(4) of
the UCC) acting solely for Indenture Trustee;
(ii) any Reserve Account Property that is a book entry
security held through the Federal Reserve System pursuant to Federal
book-entry regulations shall be delivered in accordance with paragraph
(b) of the definition of "Delivery" and shall be maintained by
Indenture Trustee pending maturity or disposition, through continued
book entry registration of such Reserve Account Property as described
in such paragraph; and
23
28
(iii) any Reserve Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause
(ii) above shall be delivered to Indenture Trustee in accordance with
paragraph (c) of the definition of "Delivery" and shall be maintained
by Indenture Trustee pending maturity or disposition, through continued
registration of Indenture Trustee's (or its nominee's) ownership of
such security.
Effective upon the crediting of any Reserve Account Property to the Reserve
Account, Indenture Trustee shall be deemed to have represented that it has
purchased such Reserve Account Property for value, in good faith and without
notice of any adverse claim thereto.
(g) Issuer and Servicer agree to take or cause to be taken such further
actions, to execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments (including any UCC financing
statements or this Agreement) as may be determined to be necessary, in an
Opinion of Counsel to Issuer delivered to Owner Trustee and Indenture Trustee in
order to perfect the interests created by this Section 5.8 and otherwise fully
to effectuate the purposes, terms and conditions of this Section 5.8. Issuer and
Servicer shall:
(1) promptly execute, deliver and file any financing
statements, amendments, continuation statements, assignments,
certificates and other documents with respect to such interests and
perform all such other acts as may be necessary in order to perfect or
to maintain the perfection of Indenture Trustee's security interest;
and
(2) make the necessary filings of financing statements or
amendments thereto within ten days after the occurrence of any of the
following: (1) any change in their respective names or any trade names,
(2) any change in the location of their respective chief executive
offices or principal places of business or jurisdiction of organization
and (3) any merger or consolidation or other change in their respective
identities or corporate structures; and shall promptly notify Owner
Trustee and Indenture Trustee of any such filings.
(h) Seller may at any time, without consent of Holders, sell, transfer,
convey or assign in any manner its rights to and interests in distributions from
the Reserve Account provided that (i) the Rating Agencies confirm in writing
that such action will not result in a reduction or withdrawal of the rating of
any class of Notes or Certificates, (ii) Seller provides to Owner Trustee and
Indenture Trustee an Opinion of Counsel from independent counsel that such
action will not cause Issuer to be classified as an association (or publicly
traded partnership) taxable as a corporation for federal income tax purposes and
(iii) such transferee or assignee agrees in writing to take positions for
federal income tax purposes consistent with the federal income tax positions
agreed to be taken by Seller.
ARTICLE VI.
SELLER
SECTION 6.1. Representations of Seller. Seller makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and
24
29
rights included in the Owner Trust Estate. The representations speak as of the
execution and delivery of this Agreement and shall survive the sale of the
Receivables to Issuer and the pledge thereof to Indenture Trustee pursuant to
the Indenture.
(a) Organization and Good Standing. Seller has been duly organized and
is validly existing as a Delaware corporation in good standing under the laws of
the State of Delaware, with the power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently conducted and had at all relevant times, and has, full power,
authority and legal right to acquire, own and sell the Receivables and the other
properties and rights included in the Owner Trust Estate assigned to Issuer
pursuant to Article II.
(b) Power and Authority. Seller has the power, authority and legal
right to execute and deliver this Agreement and the Basic Documents to which it
is a party and to carry out their respective terms and to sell and assign the
property to be sold and assigned to and deposited with Issuer as the Owner Trust
Estate; and the execution, delivery and performance of this Agreement and the
Basic Documents to which it is a party have been duly authorized by Seller by
all necessary corporate action.
(c) No Consent Required. No approval, authorization, consent, license
or other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement or the Basic Documents to which it is
a party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(d) Valid Sale; Binding Obligation. Seller intends this Agreement to
effect a valid sale, transfer, and assignment of the Receivables and the other
properties and rights included in the Owner Trust Estate conveyed by Seller to
Issuer hereunder, enforceable against creditors of and purchasers from Seller;
and each of this Agreement and the Basic Documents to which it is a party
constitutes a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its respective terms, subject, as to enforceability,
to applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws affecting enforcement of the
rights of creditors generally and to equitable limitations on the availability
of specific remedies.
(e) No Violation. The execution, delivery and performance by Seller of
this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under or result in the creation or imposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the certificate of
incorporation or bylaws of Seller, (ii) any material indenture, contract, lease,
mortgage, deed of trust or other instrument or agreement to which Seller is a
party or by which Seller is bound, or (iii) any law, order, rule or regulation
applicable to Seller of any federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having jurisdiction
over Seller.
25
30
(f) No Proceedings. There are no proceedings or investigations pending,
or, to the knowledge of Seller, threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality having
jurisdiction over Seller or its properties: (i) asserting the invalidity of this
Agreement, any other Basic Document, the Notes or the Certificates, (ii) seeking
to prevent the issuance of the Notes or Certificates or the consummation of any
of the transactions contemplated by this Agreement or any other Basic Document,
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by Seller of its obligations under, or the validity or
enforceability of, this Agreement, any other Basic Document, the Notes or the
Certificates, to the extent applicable, or (iv) that may materially and
adversely affect the federal or state income, excise franchise or similar tax
attributes of the Certificates.
(g) Chief Executive Office. The chief executive office of Seller is
[100 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxx, Xxxxxxxx 00000].
SECTION 6.2. Continued Existence. During the term of this Agreement,
subject to Section 6.4, Seller will keep in full force and effect its existence,
rights and franchises as a corporation organized under the laws of the State of
Delaware and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Basic Documents and each
other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby.
SECTION 6.3. Liability of Seller; Indemnities. Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by Seller under this Agreement.
(a) Seller shall indemnify, defend and hold harmless Issuer, Owner
Trustee and Indenture Trustee and their respective officers, directors,
employees and agents from and against any taxes that may at any time be asserted
against any such Person with respect to, and on the date of, the sale of the
Receivables to Issuer or the issuance and original sale of the Notes and
Certificates, including any sales, gross receipts, general corporation, tangible
personal property, privilege or license taxes (but, in the case of all
indemnified Persons other than Issuer, not including any taxes asserted with
respect to Federal or other income taxes arising out of transactions
contemplated by this Agreement and the other Basic Documents) and costs and
expenses in defending against the same.
(b) Seller shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, the Certificateholders and the Noteholders and the
respective officers, directors, employees and agents of Issuer, Owner Trustee
and Indenture Trustee from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent arising out of, or imposed upon
such Person through or as a result of (i) Seller's willful misfeasance, bad
faith or gross negligence (other than errors in judgment) in the performance of
its duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement, (ii) Seller's violation of Federal
or state securities laws in connection with the offering and sale of the Notes
and the Certificates or in connection with any application relating to the Notes
or Certificates under any state securities laws and (iii) the failure of any
Receivable conveyed by it
26
31
to Issuer hereunder, or the sale of the related Financed Vehicle, to comply with
all requirements of applicable law.
(c) Seller shall be liable as primary obligor for, and shall indemnify,
defend and hold harmless Owner Trustee, Indenture Trustee and their respective
officers, directors, employees and agents from and against any and all costs,
expenses, losses, claims, damages and liabilities arising out of, or incurred in
connection with, the acceptance or performance of the trusts and duties set
forth herein and in the Trust Agreement, in the case of Owner Trustee, and
herein and in the Indenture, in the case of Indenture Trustee, except to the
extent that such cost, expense, loss, claim, damage or liability: (i) in the
case of Owner Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of Owner Trustee, or, in the case of
Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence of Indenture Trustee; (ii) in the case of Owner Trustee, shall arise
from the breach by Owner Trustee of any of its representations or warranties set
forth in the Trust Agreement or any other Basic Document; or (iii) in the case
of Indenture Trustee, shall arise from the reach by Indenture Trustee of any of
its representations and warranties or covenants set forth in the Indenture. Such
liability shall survive the termination of Issuer, the discharge of the Notes
and Certificates and removal or resignation of such Indenture Trustee or Owner
Trustee.
(d) Seller shall pay any and all taxes levied or assessed upon the
Issuer or upon all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or removal of
Owner Trustee or Indenture Trustee and the termination of this Agreement or the
Indenture or the Trust Agreement, as applicable, and shall include reasonable
fees and expenses of counsel and other expenses of litigation. If Seller shall
have made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to Seller,
without interest.
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which
Seller shall be a party or (c) which may succeed to the properties and assets of
Seller substantially as a whole, shall be the successor to Seller without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided that Seller hereby covenants that it will not
consummate any of the foregoing transactions except upon satisfaction of the
following: (i) the surviving entity, if other than the Seller, executes an
agreement of assumption to perform every obligation of Seller under this
Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.1 or 6.1 shall have been
breached, (iii) Seller shall have delivered to Owner Trustee and Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, and that
the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Seller shall have a consolidated net worth at
least equal to that of the predecessor Seller, (v) such transaction will not
result in a material adverse federal or state tax consequence to Issuer, the
27
32
Noteholders or the Certificateholders and (vi) unless Seller is the surviving
entity, Seller shall have delivered to Owner Trustee and Indenture Trustee an
Opinion of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of Owner Trustee and Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interests.
SECTION 6.5. Limitation on Liability of Seller and Others. Seller and
any director or officer or employee or agent of Seller may rely in good faith on
the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising under any
Basic Document (provided that such reliance shall not limit in any way Seller's
obligations under Section 3.2 or 6.3). Seller shall not be under any obligation
to appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement, and that in its opinion may involve it
in any expense or liability.
SECTION 6.6. Seller May Own Certificates or Notes. Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not Seller or an Affiliate thereof, except as expressly provided herein or
in any Basic Document. Except as set forth herein or in the other Basic
Documents, Notes and Certificates so owned by or pledged to Seller or any such
Affiliate shall have an equal and proportionate benefit under the provisions of
this Agreement and the other Basic Documents, without preference, priority, or
distinction as among all of the Notes and Certificates.
SECTION 6.7. Indebtedness of Seller. Seller shall provide written
notice to the Rating Agencies at least thirty (30) days prior to the date it
incurs any material indebtedness or assumes or guarantees any material
indebtedness of any other entity in connection with the acquisition or transfer
of receivables (other than the Receivables) or the issuance and sale of
securities (other than the Notes and Certificates) secured by or evidencing
beneficial ownership interests in such receivables, or any other activity set
forth in Section _____ of its by-laws or incurs any material, non- incidental
indebtedness in connection with the accomplishment of any of the foregoing.
ARTICLE VII.
SERVICER
SECTION 7.1. Representations of Servicer. Servicer makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate. The representations speak as of the execution and delivery of the
Agreement and shall survive the sale, transfer and assignment of the Receivables
to Issuer and the pledge thereof to Indenture Trustee pursuant to the Indenture:
(a) Organization and Good Standing. Servicer has been duly organized
and is validly existing as a national banking association in good standing under
the laws of the United States of America, with the power and authority to own
its properties and to conduct its business as such
28
33
properties are presently owned and such business is presently conducted, and had
at all relevant times, and shall have, the power, authority and legal right to
service the Receivables and the other properties and rights included in the
Owner Trust Estate.
(b) Due Qualification. Servicer shall be duly qualified to do business
and in good standing, and shall have obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property or
the conduct of its business (including the servicing of the Receivables as
required by this Agreement) shall require such qualifications.
(c) Power and Authority. Servicer has the power, authority and legal
right to execute and deliver this Agreement and the Basic Documents to which it
is a party and to carry out their respective terms; and the execution, delivery
and performance of this Agreement and the Basic Documents to which it is a party
have been duly authorized by Servicer by all necessary corporate action.
(d) No Consent Required. No approval, authorization, consent, license
or other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement, the Basic Documents to which it is a
party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(e) Binding Obligation. Each of this Agreement and the Basic Documents
to which it is a party constitutes a legal, valid and binding obligation of
Servicer, enforceable against Servicer in accordance with its respective terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws affecting enforcement of the rights of creditors of banks generally and to
equitable limitations on the availability of specific remedies.
(f) No Violation. The execution, delivery and performance by Servicer
of this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under, or result in the creation or disposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the [charter] or bylaws of
Servicer, (ii) any material indenture, contract, lease, mortgage, deed of trust
or other instrument or agreement to which Servicer is a party or by which
Servicer is bound, or (iii) any law, order, rule or regulation applicable to
Servicer of any federal or state regulatory body, any court, administrative
agency, or other governmental instrumentality having jurisdiction over Servicer.
(g) No Proceedings. There are no proceedings or investigations pending,
or, to Servicer's knowledge, threatened, before any court, regulatory body,
administrative agency, or tribunal or other governmental instrumentality having
jurisdiction over Servicer or its properties: (i) asserting the invalidity of
this Agreement, any other Basic Document, the Notes or the Certificates, (ii)
seeking to prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this Agreement or any
other Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect
29
34
the performance by Servicer of its obligations under, or the validity or
enforceability of, this Agreement, any other Basic Document, the Notes or the
Certificates, to the extent applicable, or (iv) that may materially and
adversely affect the federal or state income, excise, franchise or similar tax
attributes of the Certificates.
SECTION 7.2. Indemnities of Servicer.
(a) Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by Servicer under this Agreement.
(b) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, the Certificateholders and the Noteholders
and any of the respective officers, directors, employees and agents of Issuer,
Owner Trustee, Indenture Trustee or Seller from any and all costs, expenses,
losses, claims, damages and liabilities (including reasonable attorneys' fees
and expenses) to the extent arising out of, or imposed upon any such Person
through, the gross negligence, willful misfeasance or bad faith (other than
errors in judgment) of Servicer in the performance of its obligations and duties
under this Agreement or in the performance of the obligations and duties of any
subservicer under any subservicing agreement.
(c) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, and Indenture Trustee and their respective officers, directors,
employees and agents from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions contemplated in this
Agreement or in the other Basic Documents, including any sales, gross receipts,
general corporation, tangible or intangible personal property, franchise,
privilege, or license taxes, or any taxes of any kind which may be asserted
(but, in the case of all indemnified Persons other than Issuer, not including
any Federal or other income taxes arising out of transactions contemplated by
this Agreement and the other Basic Documents) against the Issuer, and costs and
expenses in defending against the same.
(d) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, Certificateholders and the Noteholders or
any of the respective officers, directors, employees and agents of Issuer, Owner
Trustee, Indenture Trustee or Seller from any and all costs, expenses, losses,
claims, damages and liabilities (including reasonable attorneys' fees and
expenses) to the extent arising out of or imposed upon any such Person as a
result of any compensation payable to any subcustodian or subservicer (including
any fees payable in connection with the release of any Receivable File from the
custody of such subservicer or in connection with the termination of the
servicing activities of such subservicer with respect to any Receivable) whether
pursuant to the terms of any subservicing agreement or otherwise.
(e) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, the Certificateholders and the Noteholders
or any of the respective directors, officers, employees and agents of Issuer,
Owner Trustee, Indenture Trustee and Seller from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation, arising out of or resulting from
the use, ownership, or operation of any Financed Vehicle.
30
35
(f) Servicer shall indemnify, defend and hold harmless Indenture
Trustee and Owner Trustee or any of their respective officers, directors,
employees and agents from any and all costs, expenses, losses, claims, damages
and liabilities (including reasonable attorneys' fees and expenses) to the
extent arising out of the transactions contemplated by the Indenture, the Sale
and Servicing Agreement and the Administration Agreement unless such costs,
expenses, losses, claims, damages and liabilities are due to the negligence,
willful misfeasance or bad faith of the Indenture Trustee or Owner Trustee,
respectively.
Indemnification under this Section shall survive the resignation or removal of
Owner Trustee or Indenture Trustee and the termination of this Agreement or the
Indenture or the Trust Agreement, as applicable, and shall include reasonable
fees and expenses of counsel and other expenses of litigation. If Servicer shall
have made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to Servicer,
without interest.
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which
Servicer shall be a party, (c) which may succeed to the properties and assets of
Servicer, substantially as a whole, or (d) 50% of the voting stock of which is
owned directly or indirectly by Xxxxx Fargo & Company, may become the successor
to Servicer; provided that, unless Xxxxx Fargo is the surviving party to such
transaction, Servicer hereby covenants that it will not consummate any of the
foregoing transactions except upon satisfaction of the following: (i) the
surviving Servicer, if other than Xxxxx Fargo, executes an agreement of
assumption to perform every obligation of Servicer under this Agreement, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 7.1 shall have been breached and no Servicer
Termination Event, and no event that, after notice or lapse of time, or both,
would become a Servicer Termination Event shall have occurred and be continuing,
(iii) Servicer shall have delivered to Owner Trustee and Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with, and that the
Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Servicer shall have a consolidated net worth at
least equal to that of the predecessor Servicer, and (v) such transaction will
not result in a material adverse Federal or state tax consequence to Issuer, the
Noteholders or the Certificateholders.
SECTION 7.4. Limitation on Liability of Servicer and Others. Neither
Servicer nor any of its directors, officers, employees or agents shall be under
any liability to Issuer, the Noteholders or the Certificateholders, except as
provided under this Agreement, for any action taken or for refraining from the
taking of any action by Servicer or any subservicer pursuant to this Agreement
or for errors in judgment; provided that this provision shall not protect
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties (except for errors in judgment) or by reason of reckless
disregard of obligations and duties under this Agreement. Servicer or any
subservicer and any of their respective directors, officers, employees or agents
31
36
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this Agreement.
Except as provided in this Agreement, Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall be
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided that Servicer may (but shall not be required to) undertake any
reasonable action that it may deem necessary or desirable in respect of the
Basic Documents to protect the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture. In such event, the legal
expense and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Servicer.
SECTION 7.5. Xxxxx Fargo Not To Resign as Servicer. Subject to the
provisions of Section 7.3, Xxxxx Fargo hereby agrees not to resign from the
obligations and duties hereby imposed on it as Servicer under this Agreement
except upon determination that the performance of its duties hereunder shall no
longer be permissible under applicable law or if such resignation is required by
regulatory authorities. Notice of any such determination permitting the
resignation of Xxxxx Fargo as Servicer shall be communicated to Owner Trustee
and Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to Owner Trustee and Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the earlier of Indenture Trustee or a Successor Servicer
having assumed the responsibilities and obligations of the resigning Servicer in
accordance with Section 8.2 or the date upon which any regulatory authority
requires such resignation.
SECTION 7.6. Existence. Subject to the provisions of Section 7.3,
during the term of this Agreement, Xxxxx Fargo will keep in full force and
effect its existence, rights and franchises as a national banking association.
SECTION 7.7. Servicer May Own Notes or Certificates. The Servicer, and
any Affiliate of the Servicer, may, in its individual or any other capacity,
become the owner or pledgee of Notes or Certificates with the same rights as it
would have if it were not the Servicer or an Affiliate thereof, except as
expressly provided herein or in any Basic Document. Except as set forth herein
or in the other Basic Documents, Notes and Certificates so owned by or pledged
to Servicer or any such Affiliate shall have an equal and proportionate benefit
under the provisions of this Agreement and the other Basic Documents, without
preference, priority, or distinction as among all of the Notes and Certificates.
ARTICLE VIII.
SERVICER TERMINATION EVENTS
SECTION 8.1. Servicer Termination Event. If any one of the following
events (a "Servicer Termination Event") shall occur and be continuing:
32
37
(a) any failure by Servicer to deliver to Indenture Trustee and Owner
Trustee the Servicer's Report in accordance with Section 4.9, or any failure by
Servicer or Seller to deliver to Indenture Trustee or Owner Trustee for deposit
in any of the Trust Accounts or the Certificate Distribution Account any
required payment or to direct Indenture Trustee or Owner Trustee to make any
required distributions therefrom that shall continue unremedied for a period of
five Business Days after written notice of such failure is received by Servicer
from Owner Trustee or Indenture Trustee or after discovery of such failure by an
Authorized Officer of Servicer; or
(b) failure on the part of Servicer or Seller duly to observe or to
perform in any material respect any other covenants or agreements of Servicer or
Seller, as applicable, set forth in this Agreement or any other Basic Document
to which it is a party, which failure shall (i) materially and adversely affect
the rights of either the Certificateholders or Noteholders and (ii) continue
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given (A) to
Servicer by Owner Trustee or Indenture Trustee or (B) to Servicer and to Owner
Trustee and Indenture Trustee by the Holders of Notes evidencing not less than
25% of the Outstanding Amount of the Notes or Holders of Certificates evidencing
not less than 25% of the outstanding Certificate Balance, as applicable (or for
such longer period, not in excess of 120 days, as may be reasonably necessary to
remedy such default; provided that such default is capable of remedy within 120
days and Servicer delivers an Officer's Certificate to Owner Trustee and
Indenture Trustee to such effect and to the effect that Servicer or Seller, as
applicable, has commenced or will promptly commence, and will diligently pursue,
all reasonable efforts to remedy such default); or
(c) an Insolvency Event occurs with respect to Servicer, Seller, any
Seller Affiliate or any of their respective successors;
then, and in each and every case, so long as any Servicer Termination Event
shall not have been remedied, either Indenture Trustee, or the Holders of Notes
evidencing greater than 50% of the Outstanding Amount of the Notes (or, if no
Notes are then Outstanding, either the Owner Trustee or the Holders of
Certificates evidencing greater than 50% of the Certificate Balance), by notice
then given in writing to Servicer (and to Owner Trustee or Indenture Trustee, as
applicable, if given by the Holders) may terminate all the rights and
obligations (other than the obligations set forth in Section 7.2) of Servicer
under this Agreement. On or after the receipt by Servicer of such written
notice, all authority and power of Servicer under this Agreement, whether with
respect to the Notes, the Certificates or the Receivables or otherwise, shall,
without further action, pass to and be vested in Indenture Trustee or such
Successor Servicer as may be appointed under Section 8.2; and, without
limitation, Indenture Trustee and Owner Trustee are hereby authorized and
empowered to execute and deliver, on behalf of the predecessor Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the Successor Servicer, Indenture
Trustee and Owner Trustee in effecting the termination of the responsibilities
and rights of the predecessor Servicer under this Agreement, including the
transfer to the Successor Servicer for administration by it of all cash amounts
that shall at the time be held by the predecessor Servicer for deposit, or shall
thereafter be received by it with respect to a Receivable. Servicer shall
promptly transfer its electronic records relating to the Receivables to
33
38
the Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Receivable Files
to the Successor Servicer and amending this Agreement to reflect such succession
as Servicer pursuant to this Section shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Termination Event, Indenture
Trustee shall give notice thereof to the Rating Agencies.
SECTION 8.2. Appointment of Successor.
(a) Upon Servicer's receipt of notice of termination, pursuant to
Section 8.1 or Servicer's resignation (if and to the extent permitted in
accordance with the terms of this Agreement), the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the earlier of (i) the date 45
days from the delivery to Owner Trustee and Indenture Trustee of written notice
of such resignation (or written confirmation of such notice) in accordance with
the terms of this Agreement and (ii) the date upon which the predecessor
Servicer shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of Servicer's
termination or resignation hereunder, Indenture Trustee shall appoint a
Successor Servicer, and the Successor Servicer shall accept its appointment by a
written assumption in form acceptable to Owner Trustee and Indenture Trustee. In
the event that a Successor Servicer has not been appointed at the time when the
predecessor Servicer has ceased to act as Servicer in accordance with this
Section, Indenture Trustee without further action shall automatically be
appointed the Successor Servicer and Indenture Trustee shall be entitled to the
Servicing Fee. Notwithstanding the above, Indenture Trustee shall, if it shall
be unwilling or unable so to act, appoint or petition a court of competent
jurisdiction to appoint, any established institution, having a net worth of not
less than $50,000,000 and whose regular business shall include the servicing of
motor vehicle receivables, as the successor to Servicer under this Agreement;
provided, that the appointment of any such Successor Servicer will not result in
the withdrawal or reduction of the outstanding rating assigned to the
Certificates or Notes by any Rating Agency.
(b) Upon appointment, the Successor Servicer (including Indenture
Trustee acting as Successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all the
rights granted to the predecessor Servicer by the terms and provisions of this
Agreement. No Successor Servicer shall be liable for any acts or omissions of
any predecessor Servicer.
(c) A transfer of servicing hereunder shall not affect the rights and
duties of the parties hereunder (including the obligations and indemnities of
Seller pursuant to Section 3.3 and 6.3 or, with respect to obligations and
indemnities arising prior to, or concurrently with, a transfer of servicing
hereunder, the predecessor Servicer pursuant to Section 4.7 or 7.2) other than
those relating to the management, administration, servicing, custody or
collection of the
34
39
Receivables and the other rights and properties included in the Owner Trust
Estate. The Successor Servicer shall, upon its appointment pursuant to this
Section 8.2 and as part of its duties and responsibilities under this Agreement,
promptly take all action it deems necessary or appropriate so that the
predecessor Servicer (in whatever capacity) is paid or reimbursed all amounts it
is entitled to receive under this Agreement on each Payment Date subsequent to
the date on which it is terminated as Servicer hereunder. Without limiting the
generality of the foregoing, the predecessor Servicer will be entitled to
receive all accrued and unpaid Servicing Fees through and including the
effective date of the termination of the predecessor Servicer.
SECTION 8.3. Payment of Servicing Fee. If Servicer shall be replaced,
the predecessor Servicer shall be entitled to receive any accrued and unpaid
Servicing Fees through the date of the Successor Servicer's acceptance hereunder
and any Supplemental Servicing Fees accrued and unpaid or received prior to such
date, in each case, in accordance with Section 4.8.
SECTION 8.4. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, Servicer pursuant to this
Article VIII, Owner Trustee shall give prompt written notice thereof to
Certificateholders and Indenture Trustee shall give prompt written notice
thereof to Noteholders subject to the Rating Agency Condition.
SECTION 8.5. Waiver of Past Defaults. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes (or the Holders
of Certificates evidencing not less than a majority of the outstanding
Certificate Balance, as applicable, in the case of any default which does not
adversely affect Indenture Trustee or the Noteholders) may, on behalf of all
Noteholders and Certificateholders, waive in writing any default by Servicer in
the performance of its obligations hereunder and its consequences, except a
default in making any required deposits to any of the Trust Accounts in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
ARTICLE IX.
TERMINATION
SECTION 9.1. Optional Purchase of All Receivables; Termination Notice.
(a) On the last day of any Collection Period immediately preceding a
Determination Date as of which the then outstanding Pool Balance is [10]% or
less of the Original Pool Balance, Seller shall have the option to purchase the
Owner Trust Estate, other than the Trust Accounts, and the Certificate
Distribution Account and any funds or investments therein. To exercise such
option, Seller shall deposit pursuant to Section 5.4 in the Collection Account
an amount which, when added to the amounts on deposit in the Collection Account
for such Payment Date, equals the sum of (a) the unpaid principal amount of the
then outstanding Class B Notes, plus accrued and unpaid interest thereon, plus
(b) the Certificate Balance plus accrued and unpaid interest thereon. The Class
B Notes and the Certificates will be redeemed concurrently therewith.
35
40
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder.
(c) Notice of any termination of Issuer shall be given by Servicer to
Owner Trustee, Indenture Trustee and the Rating Agencies as soon as practicable
after Servicer has received notice thereof.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment.
(a) This Agreement may be amended by Seller, Servicer, Owner Trustee
and Indenture Trustee (which consent may not be unreasonably withheld), but
without the consent of any of the Noteholders or the Certificateholders:
(i) to cure any ambiguity or defect, to correct or supplement
any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions in this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholders; provided that such action
shall not, as evidenced by an Opinion of Counsel delivered to Owner
Trustee and Indenture Trustee, adversely affect in any material respect
the interests of any Noteholder or Certificateholder;
(ii) (A) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of Issuer to
qualify as, and to permit an election to be made to cause all or a
portion of Issuer to be treated as, a "financial asset securitization
investment trust" as described in the provisions of the "Small Business
Job Protection Act of 1996," or to enable all or a portion of the
Issuer to qualify and an election to be made for similar treatment
under such comparable subsequent federal income tax provisions as may
ultimately be enacted into law, and (B) in connection with any such
election, to modify or eliminate existing provisions set forth in this
Agreement relating to the intended federal income tax treatment of the
Notes or Certificates and Issuer in the absence of the election; it
being a condition to any such amendment that each Rating Agency will
have notified the Seller, the Servicer, the Indenture Trustee and the
Owner Trustee in writing that the amendment will not result in a
reduction or withdrawal of the rating of any outstanding Notes or
Certificates with respect to which it is a Rating Agency; and
(iii) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable (a) the transfer to Issuer of
all or any portion of the Receivables to be derecognized under
generally accepted accounting principles ("GAAP") by Seller to Issuer,
(b) Issuer to avoid becoming a member of Seller's consolidated group
under GAAP or (c) the Seller, any Seller Affiliate or any of their
Affiliates to otherwise comply with or obtain more favorable treatment
under any law or
36
41
regulation or any accounting rule or principle; it being a condition to
any such amendment that each Rating Agency will have notified the
Seller, the Servicer, the Indenture Trustee and the Owner Trustee in
writing that the amendment will not result in a reduction or withdrawal
of the rating of any outstanding Notes or Certificates with respect to
which it is a Rating Agency.
(b) This Agreement may also be amended from time to time by Seller,
Servicer, Owner Trustee and Indenture Trustee, with the consent of the Holders
of Notes evidencing not less than a majority of the Outstanding Amount of the
Notes and the consent of the Holders of Certificates evidencing not less than a
majority of the Certificate Balance 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 that no such amendment shall (i) increase or reduce
in any manner the amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions that shall be required to be made
for the benefit of the Noteholders or the Certificateholders or (ii) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Balance, the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes and the Holders
of all the outstanding Certificates of each class affected thereby.
(c) Prior to the execution of any such amendment or consent, Servicer
shall furnish written notification of the substance of such amendment or consent
to each Rating Agency. Promptly after the execution of any such amendment or
consent, Servicer shall furnish written notification of the substance of such
amendment or consent to each Noteholder and Certificateholder.
(d) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
(e) Prior to the execution of any amendment to this Agreement, Owner
Trustee and Indenture Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied and the Opinion
of Counsel referred to in Section 10.2(i)(1) has been delivered. Owner Trustee
and Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects Owner Trustee's or Indenture Trustee's, as applicable,
own rights, duties or immunities under this Agreement or otherwise.
SECTION 10.2. Protection of Title to Trust Property.
(a) Seller shall execute and file such financing statements and cause
to be executed and filed such continuation statements, all in such manner and in
such places as may be required by law fully to preserve, maintain and protect
the interest of Issuer and the interests of Indenture Trustee in the Receivables
and the proceeds thereof. Seller shall deliver (or cause to be delivered) to
Owner Trustee and Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
37
42
(b) Neither Seller nor Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of (S) 9-402(7) of the UCC, or any
successor provision, unless it shall have given Owner Trustee and Indenture
Trustee at least five days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed financing statements or
continuation statements.
(c) Each of Seller and Servicer shall have an obligation to give Owner
Trustee and Indenture Trustee at least 60 days' prior written notice of any
relocation of its principal executive office or jurisdiction of organization,
if, as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
any such amendment or new financing statement. Servicer shall at all times
maintain each office from which it shall service Receivables, and its principal
executive office, within the United States of America.
(d) Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.
(e) Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables, Servicer's
master computer records (including any backup archives) that refer to a
Receivable shall indicate clearly the interest of Issuer and Indenture Trustee
in such Receivable and that such Receivable is owned by Issuer and has been
pledged to Indenture Trustee pursuant to the Indenture. Indication of Issuer's
and Indenture Trustee's interest in a Receivable shall be deleted from or
modified on Servicer's computer systems when, and only when, the related
Receivable shall have been paid in full or repurchased by Seller or purchased by
Servicer.
(f) If at any xxxx Xxxxxx or Servicer shall propose to sell, grant a
security interest in or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, Servicer
shall give to such prospective purchaser, lender or other transferee computer
tapes, records or printouts (including any restored from backup archives) that,
if they shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned by Issuer and has been
pledged to Indenture Trustee.
(g) Servicer shall permit Indenture Trustee, Owner Trustee and their
respective agents at any time during normal business hours to inspect, audit and
make copies of and abstracts from Servicer's records regarding any Receivable.
(h) Upon request at any time Owner Trustee or Indenture Trustee shall
have reasonable grounds to believe that such request is necessary in connection
with the performance of its duties under this Agreement or any of the Basic
Documents, Servicer shall furnish to Owner Trustee or to Indenture Trustee,
within thirty Business Days, a list of all Receivables (by
38
43
contract number and name of Obligor) then owned by Issuer, together with a
reconciliation of such list to the Schedule of Receivables and to each of
Servicer's Reports furnished before such request indicating removal of
Receivables from Issuer.
(i) Servicer shall deliver to Owner Trustee and Indenture Trustee:
(1) promptly after the execution and delivery of this
Agreement and of each amendment thereto, an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of Issuer
and Indenture Trustee in the Receivables, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such
details are given, or (B) stating that, in the opinion of such counsel,
no such action shall be necessary to preserve and protect such
interest; and
(2) within 120 days after the beginning of each calendar year
which commences more than three months after the Cutoff Date, an
Opinion of Counsel, dated as of a date during such 120-day period,
either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of Issuer
and Indenture Trustee in the Receivables, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such
details are given, or (B) stating that, in the opinion of such counsel,
no such action shall be necessary to preserve and protect such
interest.
Each Opinion of Counsel referred to in clause (1) or (2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(j) Seller shall, to the extent required by applicable law, cause the
Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 10.3. Notices. All demands, notices and communications upon or
to Seller, Servicer, Owner Trustee, Indenture Trustee or the Rating Agencies
under this Agreement shall be in writing, personally delivered, sent by
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of Seller,
to Xxxxx Fargo Auto Receivables Corporation, [________________________],
Attention: _____________, (b) in the case of Servicer, to Xxxxx Fargo Bank,
N.A., 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
_____________, (c) in the case of Issuer or Owner Trustee, at the Corporate
Trust Office, (d) in the case of Indenture Trustee, at the Corporate Trust
Office, [(e) in the case of Moody's, to Xxxxx'x Investors Service, Inc., to 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset Backed Securities
Group, (f) in the case of Standard & Poor's, to Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxxxxx (00xx
Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset Backed Surveillance
Department, and (g) in the case of Fitch, to Fitch Information Services, Inc.,
0000 Xxxx 0xx Xxxxxx, Xxxxxx, Xxxxxxx 00000.] Any notice required or permitted
to be mailed to a Noteholder or Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Person as shown in the Note
Register or the Certificate Register, as applicable. Any
39
44
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Noteholder or
Certificateholder shall receive such notice.
SECTION 10.4. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 3.4, 4.1, 6.4 and 7.3 and as
provided in the provisions of this Agreement concerning the resignation of
Servicer, this Agreement may not be assigned by Seller or Servicer without the
prior written consent of the Owner Trustee, Indenture Trustee, the Noteholders
evidencing not less than 66 2/3% of the Outstanding Amount of the Notes and the
Certificateholders evidencing not less than 66 2/3% of the outstanding
Certificate Balance.
SECTION 10.5. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of Seller, Servicer, Issuer, Owner Trustee
and for the benefit of the Certificateholders and the Noteholders, as third-
party beneficiaries, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 10.6. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not create or render unenforceable
such provision in any other jurisdiction.
SECTION 10.7. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.8. 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 10.9. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW BUT OTHERWISE 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 10.10. Assignment to Indenture Trustee. Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by Issuer to Indenture Trustee pursuant to the Indenture for
the benefit of the Noteholders of all right, title and interest of Issuer in, to
and under the Receivables and/or the assignment of any or all of Issuer's rights
and obligations hereunder to Indenture Trustee.
SECTION 10.11. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, Servicer and Seller shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to Issuer, acquiesce, petition or otherwise invoke or
40
45
cause Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against Issuer under any Federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of Issuer.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by _________________ not in its individual
capacity but solely in its capacity as Owner Trustee of Issuer and in no event
shall _______________________ in its individual capacity or, except as expressly
provided in the Trust Agreement, as Owner Trustee have any liability for the
representations, warranties, covenants, agreements or other obligations of
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of Issuer. For all purposes of this Agreement, in the performance of its duties
or obligations hereunder or in the performance of any duties or obligations of
Issuer hereunder, Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by _________________ not in its individual capacity
but solely as Indenture Trustee and in no event shall _________________ have any
liability for the representations, warranties, covenants, agreements or other
obligations of Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of Issuer.
SECTION 10.13. Further Assurances. Seller and the Servicer agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by Owner Trustee or
Indenture Trustee more fully to effect the purposes of this Agreement,
including, without limitation, the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
SECTION 10.14. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Owner Trustee, Indenture Trustee,
the Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges therein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
41
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers as
of the day and year first above written.
XXXXX FARGO AUTO TRUST 200_-_
By: ______________________________, not in
its individual capacity, but solely as
Owner Trustee
By:
---------------------------------------
Name:
Title:
XXXXX FARGO AUTO RECEIVABLES CORPORATION, as
Seller
By:
---------------------------------------
Name:
Title:
XXXXX FARGO BANK, N.A., as Servicer
By:
---------------------------------------
Name:
Title:
______________________, not in its individual
capacity but solely as Indenture Trustee,
By:
---------------------------------------
Name:
Title:
S-1
47
SCHEDULE A
(Delivered on Disk to Trustee and Owner Trustee)
Schedule A-1
48
SCHEDULE B
Location of Receivables Files
----------
The Receivables sold by each Seller Affiliate to Seller and sold by Seller to
Issuer are located at the offices of such Seller Affiliate listed below.
Schedule B-1
49
EXHIBIT A
Form of Servicer's Report
----------
Exhibit A-1
50
APPENDIX X
DEFINITIONS
"Act" is defined in Section 11.3(a) of the Indenture.
"Actuarial Receivable" means a Receivable that provides for (i)
amortization of the loan over a series of fixed level payment monthly
installments and (ii) each monthly installment, including the monthly
installment representing the final payment on the Receivable, to consist of an
amount of interest equal to 1/12 of the Contract Rate of the loan multiplied by
the unpaid principal balance of the loan, and an amount of principal equal to
the remainder of the monthly installment.
"Additional Principal Distributable Amount" means
"Additional Servicing" means, for each Payment Date, an amount equal to
the lesser of (i) the amount by which (A) the aggregate amount of the Servicing
Fee for such Payment Date and all prior Payment Dates exceeds (B) the aggregate
amount of Additional Servicing paid to the Servicer on all prior Payment Dates
and (ii) the amount, if any, by which (A) the sum of Available Interest and
Available Principal for such Payment Date exceed (B) the sum, without
duplication of (x) the Servicing Fee paid on such Payment Date with respect to
the related Collection Period and any accrued and unpaid Servicing Fee for prior
Collection Periods, (y) all amounts required to be distributed to the
Noteholders and the Certificateholders on such Payment Date, and (z) the amount,
if any, deposited in the Reserve Account on such Payment Date.
"Administration Agreement" means the Administration Agreement among
Xxxxx Fargo, as Administrator, Xxxxx Fargo Auto Trust 200__-__, as Issuer, and
_____________, as Indenture Trustee, as the same may be amended and supplemented
from time to time.
"Administration Fee" is defined in Section 4 of the Administration
Agreement.
"Administrator" means Xxxxx Fargo and each successor Administrator.
"Affiliate" means, with respect to any specified Person, any other
Person controlling, controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. A Person shall not be
deemed to be an Affiliate of any specified Person solely because such other
Person has the contractual right or obligation to manage such specified Person
or act as servicer with respect to the financial assets of such specified Person
unless such other Person controls the specified Person through equity ownership
or otherwise.
"Affiliate Security Agreement" means the agreement dated as of
_________________, 2001 between Xxxxx Fargo and the Indenture Trustee under
which Xxxxx Fargo grants a security interest in its Receivables and certain
other property described therein to the Indenture Trustee.
Appendix X, Page 1
51
"Authenticating Agent" is defined in Section 2.13 of the Indenture.
"Authorized Officer" means, with respect to Issuer and Servicer, any
officer of Owner Trustee or Servicer, as applicable, who is authorized to act
for Owner Trustee or Servicer, as applicable, in matters relating to Issuer and
who is identified on the list of Authorized Officers delivered by each of Owner
Trustee and Servicer to Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).
"Available Interest" means, for any Payment Date, the sum of the
following amounts for the related Collection Period: (a) that portion of the
Collections on the Receivables received during such Collection Period that is
allocable to interest in accordance with Servicer's customary servicing
procedures, (b) all Liquidation Proceeds received during the related Collection
Period and (c) the Purchase Amounts, to the extent allocable to accrued
interest, of all Receivables that are purchased by Seller or Servicer as of the
last day of the related Collection Period. "Available Interest" for any Payment
Date shall exclude all payments and proceeds of any Receivables the Purchase
Amount of which has been distributed on a prior Payment Date.
"Available Principal" means, for any Payment Date, the sum of the
following amounts with respect to the related Collection Period: (a) that
portion of all Collections on the Receivables received during such Collection
Period that is allocable to principal in accordance with Servicer's customary
servicing procedures; and (b) the Purchase Amounts, to the extent attributable
to principal, of all Receivables purchased by Seller or Servicer as of the last
day of the related Collection Period. "Available Principal" on any Payment Date
shall exclude all payments and proceeds of any Receivables the Purchase Amount
of which has been distributed on a prior Payment Date.
"Bank Regulatory Authorities" means the Federal Reserve Board, the
Federal Deposit Insurance Corporation and Office of the Comptroller of Currency.
"Basic Documents" means the Purchase Agreement, the Affiliate Security
Agreement, the Indenture, the Depository Agreements, the Sale and Servicing
Agreement, the Trust Agreement, the Administration Agreement, the Notes, [the
Certificates] and other documents and certificates delivered in connection
therewith.
"Benefit Plan" is defined in Section 11.12 of the Trust Agreement.
"Book Entry Certificate" means a beneficial interest in the
Certificates, ownership of which shall be evidenced and transfers of which shall
be made, through book entries by a Clearing Agency as described in Section 3.11
of the Trust Agreement.
"Book Entry Note" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.10 of the Indenture.
"Business Day" means a day that is not a Saturday or a Sunday and that
in the States of New York, California and the State in which the Corporate Trust
Office is located is neither a legal holiday nor a day on which banking
institutions are authorized by law, regulation or executive order to be closed.
Appendix X, Page 2
52
"Certificate" means a certificate evidencing the beneficial interest of
a Certificateholder in the Trust, substantially in the form of Exhibit A to the
Trust Agreement.
"Certificate Account Property" means the Certificate Distribution
Account, all amounts and investments held from time to time therein (whether in
the form of deposit account, Physical Property, book entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
"Certificate Balance" equals, initially, $__________ and, thereafter,
equals the initial Certificate Balance, reduced by all amounts allocable to
principal previously distributed to Certificateholders.
"Certificate Depository Agreement" means the agreement among the Trust,
Owner Trustee, Servicer and The Depository Trust Company, as the initial
Clearing Agency, dated as of the Closing Date, relating to the Certificates,
substantially in the form attached as Exhibit C to the Trust Agreement, as the
same may be amended and supplemented from time to time.
"Certificate Distribution Account" is defined in Section 5.1 of the
Trust Agreement.
"Certificate Pool Factor" as of the close of business on a Payment Date
means a seven-digit decimal figure equal to the Certificate Balance (after
giving effect to distributions made on such date) divided by the initial
Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of the
Cutoff Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
"Certificate Rate" means ____% per annum (computed on the basis of a
360-day year of twelve 30 day months).
"Certificate Register" and "Certificate Registrar" means the register
mentioned and the registrar appointed pursuant to Section 3.4 of the Trust
Agreement.
"Certificateholder" means the Person in whose name a Certificate is
registered on the Certificate Register.
"Certificateholders' Interest Carryover Shortfall" means, for any
Payment Date, the excess of the Certificateholders' Monthly Interest
Distributable Amount for the preceding Payment Date and any outstanding
Certificateholders' Interest Carryover Shortfall on such preceding Payment Date,
over the amount in respect of interest at the Certificate Rate that is actually
deposited in the Certificate Distribution Account on such preceding Payment
Date, plus interest on such excess, to the extent permitted by law, in an amount
equal to the product of one-twelfth multiplied by the Certificate Rate
multiplied by the amount of such excess.
"Certificateholders' Interest Distributable Amount" means, for any
Payment Date, the sum of the Certificateholders' Monthly Interest Distributable
Amount for such Payment Date and the Certificateholders' Interest Carryover
Shortfall for such Payment Date.
"Certificateholders' Monthly Interest Distributable Amount" means, for
any Payment Date, an amount equal to one-twelfth (or the actual number of days
from and including the
Appendix X, Page 3
53
Closing Date to but excluding __________________, 200_ divided by 360, for the
initial Payment Date) of the Certificate Rate multiplied by the Certificate
Balance as of the close of business on the immediately preceding Payment Date,
after giving effect to all payments of principal to the Certificateholders on or
prior to such Payment Date (or, in the case of the first Payment Date, the
Certificate Balance on the Closing Date).
"Certificateholders' Monthly Principal Distributable Amount" means, for
any Payment Date, the Certificateholders' Percentage of the Principal
Distribution Amount or, for any Payment Date on or after the Payment Date on
which the outstanding principal balance of the Class A-2 Notes is reduced to
zero, 100% of the Principal Distribution Amount (less any amount required on the
first such Payment Date to reduce the outstanding principal balance of the Class
A-2 Notes to zero, which shall be deposited into the Note Distribution Account).
"Certificateholders' Percentage" means 100% minus the Noteholders'
Percentage.
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of business on any Payment Date, the excess of the Certificateholders'
Monthly Principal Distributable Amount and any outstanding Certificateholders'
Principal Carryover Shortfall from the preceding Payment Date, over the amount
in respect of principal that is actually deposited in the Certificate
Distribution Account on such current Payment Date.
"Certificateholders' Principal Distributable Amount" means, for any
Payment Date, the sum of the Certificateholders' Monthly Principal Distributable
Amount for such Payment Date and the Certificateholders' Principal Carryover
Shortfall as of the close of the preceding Payment Date; provided that the
Certificateholders' Principal Distributable Amount shall not exceed the
Certificate Balance. In addition, on the Final Scheduled Payment Date for the
Certificates, the Certificateholders Principal Distributable Amount will
include, to the extent not included under the preceding sentence, the amount
that is necessary (after giving effect to the other amounts to be deposited in
the Certificate Distribution Account on such Payment Date and allocable to
principal) to reduce the Certificate Balance to zero.
"Class A-1 Interest Rate" means ______% per annum.
"Class A-1 Noteholders' Interest Carryover Shortfall" means, for any
Payment Date, the excess of the Class A-1 Noteholders' Monthly Interest
Distributable Amount for the preceding Payment Date and any outstanding Class
A-1 Noteholders' Interest Carryover Shortfall on such preceding Payment Date,
over the amount in respect of interest on the Class A-1 Notes that was actually
paid to holders of the Class A-1 Notes on the preceding Payment Date, plus
interest on the amount of interest due but not paid to Holders of the Class A-1
Notes on the preceding Payment Date, to the extent permitted by law, in an
amount equal to the product of (i) the quotient of the number of days elapsed in
the related Interest Period divided by 360 multiplied by (ii) the Class A-1
Interest Rate multiplied by (iii) the amount of such interest due but not paid
in respect of the Class A-1 Notes.
"Class A-1 Noteholders' Interest Distributable Amount" means, for any
Payment Date, the sum of (a) the Class A-1 Noteholders' Monthly Interest
Distributable Amount and (b) the Class A-1 Noteholders' Interest Carryover
Shortfall, in each case for such Payment Date.
Appendix X, Page 4
54
"Class A-1 Noteholders' Monthly Interest Distributable Amount" means,
for any Payment Date, the product of (i) the quotient of the number of days
elapsed during the related Interest Period divided by 360 multiplied by (ii) the
Class A-1 Interest Rate multiplied by (iii) the Outstanding Amount of the Class
A-1 Notes on the immediately preceding Payment Date after giving effect to all
payments of principal to the Holders of the Class A-1 Notes on or prior to such
Payment Date (or, in the case of the first Payment Date, the Outstanding Amount
of the Class A-1 Notes on the Closing Date).
"Class A-1 Notes" means the Class A-1 _____% Asset Backed Notes,
substantially in the form of Exhibit D to the Indenture.
"Class A-2 Interest Rate" means _____% per annum.
"Class A-2 Noteholders' Interest Carryover Shortfall" means, for any
Payment Date, the excess of the Class A-2 Noteholders' Monthly Interest
Distributable Amount for the preceding Payment Date and any outstanding Class
A-2 Noteholders' Interest Carryover Shortfall on such preceding Payment Date,
over the amount in respect of interest on the Class A-2 Notes that was actually
paid to holders of the Class A-2 Notes on the preceding Payment Date, plus
interest on the amount of interest due but not paid to Holders of the Class A-2
Notes on the preceding Payment Date, to the extent permitted by law, in an
amount equal to the product of one-twelfth multiplied by the Class A-2 Interest
Rate multiplied by the amount of such interest due but not paid in respect of
the Class A-2 Notes.
"Class A-2 Noteholders' Interest Distributable Amount" means, for any
Payment Date, the sum of (a) the Class A-2 Noteholders' Monthly Interest
Distributable Amount and (b) the Class A-2 Noteholders' Interest Carryover
Shortfall, in each case for such Payment Date.
"Class A-2 Noteholders' Monthly Interest Distributable Amount" means,
for any Payment Date, the product of one-twelfth (or, in the case of the first
Payment Date the actual number of days elapsed from and including the Closing
Date to but excluding _________________, 2001 divided by 360) multiplied by the
Class A-2 Interest Rate multiplied by the Outstanding Amount of the Class A-2
Notes on the immediately preceding Payment Date after giving effect to all
payments of principal to the Holders of the Class A-2 Notes on or prior to such
immediately preceding Payment Date (or, in the case of the first Payment Date,
the Outstanding Amount of the Class A-2 Notes on the Closing Date).
"Class A-2 Notes" means the Class A-2 ____% Asset Backed Notes,
substantially in the form of Exhibit E to the Indenture.
"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 _____ __, 2001.
Appendix X, Page 5
55
"Code" means the Internal Revenue Code of 1986 and Treasury Regulations
promulgated thereunder.
"Collateral" is defined in the Granting Clause of the Indenture.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Collection Period" means, (a) in the case of the initial Collection
Period, the period from [but not including] the Cutoff Date to and including
___________ __, 2001 and (b) thereafter, each calendar month during the term of
the Sale and Servicing Agreement. With respect to any Determination Date,
Deposit Date or Payment Date, the "related Collection Period" means the
Collection Period preceding the month in which such Determination Date, Deposit
Date or Payment Date occurs.
"Collections" means all collections on the Receivables and any proceeds
from Insurance Policies and lender's single interest insurance policies.
"Commission" means the Securities and Exchange Commission.
"Contract Rate" means, with respect to a Receivable, the rate per annum
of interest charged on the outstanding principal balance of such Receivable.
"Controlling Class" means, with respect to Issuer, the Class or Classes
of Notes and/or Certificates designated on the initial "controlling class" in
the Prospectus Supplement so long as they are outstanding, and thereafter each
other Class or Classes of Notes and/or Certificates in the order of priority
designated in the Prospectus Supplement.
"Corporate Trust Office" means:
(a) as used in the Indenture, or otherwise with respect to Indenture
Trustee, the principal office of Indenture Trustee at which at any particular
time its corporate trust business shall be administered which office at date of
the execution of the Indenture is located at ____________________________,
Attention: ________________ Telephone: _____________; Facsimile: _______________
or at such other address as Indenture Trustee may designate from time to time by
notice to the Noteholders, Servicer and Issuer, or the principal corporate trust
office of any successor Indenture Trustee (the address of which the successor
Indenture Trustee will notify the Noteholders and Issuer); and
(b) as used in the Trust Agreement, or otherwise with respect to Owner
Trustee, the principal corporate trust office of Owner Trustee located at
_____________; or at such other address as Owner Trustee may designate by notice
to the Certificateholders and Depositor, or the principal corporate trust office
of any successor Owner Trustee (the address of which the successor owner trustee
will notify the Certificateholders and Depositor).
"Custodian" means Servicer in its capacity as agent of Issuer, as
custodian of the Receivable Files and any Seller Affiliate acting as agent for
Servicer for the purpose of maintaining custody of the Receivables Files.
Appendix X, Page 6
56
"Cutoff Date" means the close of business on __________, 2001.
"Cutoff Date Principal Balance" means, with respect to any Receivable,
the Initial Principal Balance of such Receivable minus the sum of the portion of
all payments received under such Receivable from or on behalf of the related
Obligor on or prior to the Cutoff Date and allocable to principal in accordance
with the terms of the Receivable.
"Dealer" means, with respect to any Receivable, the seller of the
related Financed Vehicle.
"Dealer Agreement" means an agreement between an Originator and a
Dealer pursuant to which such Originator acquires Motor Vehicle Loans from the
Dealer or gives such Dealer the right to induce persons to apply to such
Originator for loans in connection with the retail sale of Motor Vehicles by
such Dealer.
"Dealer Recourse" means, with respect to any Dealer, any rights and
remedies against such Dealer under the related Dealer Agreement (other than with
respect to any breach of representation or warranty thereunder) with respect to
credit losses on a Receivable secured by a Financed Vehicle sold by such Dealer.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Defaulted Receivable" means, with respect to any Collection Period, a
Receivable (other than a Purchased Receivable) which Servicer has determined to
charge off during such Collection Period in accordance with its customary
servicing practices (and, in no event later than 120 days after a Receivable
shall have become delinquent).
"Definitive Notes" is defined in Section 2.10 of the Indenture.
"Definitive Certificates" means either or both (as the context
requires) of (a) Certificates issued in certificated, fully registered form as
provided in Section 3.11 of the Trust Agreement and (b) Certificates issued in
certificated, fully registered form as provided in Section 3.13 of the Trust
Agreement.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(l)(i) of the UCC (or any Successor
provision) and are susceptible of physical delivery, transfer thereof to
Indenture Trustee or its nominee or custodian by physical delivery to Indenture
Trustee or its nominee or custodian endorsed to, or registered in the name of,
Indenture Trustee or its nominee or custodian or endorsed in blank, and, with
respect to a "certificated security" (as defined in Section 8-102 of the UCC)
transfer thereof (i) by delivery of such certificated security endorsed to, or
registered in the name of, Indenture Trustee or its nominee or custodian or
endorsed in blank to a financial intermediary (as defined in Section 8- 313 of
the UCC) and the making by such "financial intermediary" of entries on its books
and records identifying such certificated securities as belonging to Indenture
Trustee or its nominee or
Appendix X, Page 7
57
custodian and the sending by such financial intermediary of a confirmation of
the purchase of such certificated security by Indenture Trustee or its nominee
or custodian, or (ii) by delivery thereof to a "clearing corporation" (as
defined in Section 8-102(3) of the UCC) and the making by such clearing
corporation of appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the appropriate securities
account of a financial intermediary by the amount of such certificated security,
the identification by the clearing corporation of the certificated securities
for the sole and exclusive account of the financial intermediary, the
maintenance of such certificated securities by such clearing corporation or a
"custodian bank" (as defined in Section 8-102(4) of the UCC) or the nominee of
either subject to the clearing corporation's exclusive control, the sending of a
confirmation by the financial intermediary of the purchase by Indenture Trustee
or its nominee or custodian of such securities and the making by such financial
intermediary of entries on its books and records identifying such certificated
securities as belonging to Indenture Trustee or its nominee or custodian (all of
the foregoing, "Physical Property"), and, in any event, any such Physical
Property in registered form shall be in the name of Indenture Trustee or its
nominee or custodian; and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of ownership of any
such Trust Account Property to Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the interpretation
thereof;
(b) with respect to any securities issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations, the following procedures, all
in accordance with applicable law, including applicable Federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal Reserve
Bank by a financial intermediary which is also a "depository" pursuant to
applicable Federal regulations and issuance by such financial intermediary of a
deposit advice or other written confirmation of such book-entry registration to
Indenture Trustee or its nominee or custodian of the purchase by Indenture
Trustee or its nominee or custodian of such book-entry securities; the making by
such financial intermediary of entries in its books and records identifying such
book entry security held through the Federal Reserve System pursuant to Federal
book-entry regulations as belonging to Indenture Trustee or its nominee or
custodian and indicating that such custodian holds such Trust Account Property
solely as agent for Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Trust Account Property to
Indenture Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof in
the name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by Indenture Trustee or its nominee or
custodian of such uncertificated security, the making by such financial
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to Indenture Trustee or its nominee or custodian.
Appendix X, Page 8
58
"Deposit Date" means, with respect to any Collection Period, the
Business Day preceding the related Payment Date.
"Depositor" means Seller in its capacity as Depositor under the Trust
Agreement.
"Depository Agreements" mean the Certificate Depository Agreement and
the Note Depository Agreement.
"Determination Date" with respect to any Collection Period, means the
Business Day preceding the related Payment Date by two Business Days.
"Direct Loan" means motor vehicle promissory notes and security
agreements executed by an Obligor in favor of a motor vehicle lender.
"Dollar" and the sign "$" mean lawful money of the United States.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as the
long-term unsecured debt of such depository institution shall have a credit
rating from each Rating Agency in one of its generic rating categories which
signifies investment grade. Any such accounts (other than the Reserve Account)
may be maintained with Xxxxx Fargo, or any of its Affiliates, if such accounts
meet the requirements described in clause (a) of the preceding sentence.
"Eligible Institution" means a depository institution (which may be
Servicer (or any Affiliate of Servicer) Owner Trustee or Indenture Trustee)
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), (a) which has (i) either a long-term senior unsecured debt rating of AA
or a short-term senior unsecured debt or certificate of deposit rating of A-1+
or better by Standard & Poor's and (ii)(A) a short-term senior unsecured debt
rating of A-l or better by Standard & Poor's and (B) a short-term senior
unsecured debt rating of P-1 or better by Moody's, or any other long-term,
short-term or certificate of deposit rating acceptable to the Rating Agencies
and (b) whose deposits are insured by the Federal Deposit Insurance Corporation.
If so qualified, Servicer, any Affiliate of Servicer, Owner Trustee or Indenture
Trustee may be considered an Eligible Institution.
"Eligible Investments" shall mean any one or more of the following
types of investments:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution (including any Affiliate of Seller, Indenture Trustee,
Owner Trustee or any Affiliate of Indenture Trustee or Owner Trustee) or trust
company incorporated under the laws of the United States of America or any state
thereof or the District of Columbia (or any domestic branch of a foreign bank)
and subject to supervision and examination by United States federal or state
Appendix X, Page 9
59
banking or depository institution authorities (including depository receipts
issued by any such institution or trust company as custodian with respect to any
obligation referred to in clause (a) above or a portion of such obligation for
the benefit of the holders of such depository receipts); provided that at the
time of the investment or contractual commitment to invest therein (which shall
be deemed to be made again each time funds are reinvested following each Payment
Date), the commercial paper or other short-term senior unsecured debt
obligations (other than such obligations the rating of which is based on the
credit of a person other than such depository institution or trust company) of
such depository institution or trust company shall have a credit rating from
Standard & Poor's of A-1+ and from Moody's of P-1;
(c) commercial paper (including commercial paper of any Affiliate of
Seller) having, at the time of the investment or contractual commitment to
invest therein, a rating from Standard & Poor's of A-1+ and from Moody's of P-1;
(d) investments in money market funds (including funds for which
Indenture Trustee or Owner Trustee or any of their respective Affiliates or any
of Seller's Affiliates is investment manager or advisor) having a rating from
Standard & Poor's of AAA-m or AAAm-G and from Moody's of Aaa;
(e) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
referred to in clause (b) above; and
(g) any other investment with respect to which each Rating Agency has
provided written notice that such investment would not cause such Rating Agency
to downgrade or withdraw its then current rating of any class of Notes or the
Certificates.
"ERISA" is defined in Section 11.12 of the Trust Agreement.
"Event of Default" is defined in Section 5.1 of the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief
Accounting Officer, President, Executive Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"Expenses" is defined in Section 8.2 of the Trust Agreement.
"Final Scheduled Payment Date" means for (a) the Class A-1 Notes, the
______________ Payment Date, (b) the Class A-2 Notes, the _____________ Payment
Date and (c) the Certificates, the ______________ Payment Date.
Appendix X, Page 10
60
"Final Scheduled Maturity Date" means the last day of the Collection
Period immediately preceding the Final Scheduled Payment Date for the
Certificates.
"Financed Vehicle" means a new or used automobile or light duty truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
"Fitch" means Fitch, Inc., or its successor.
"GAAP" is defined in Section 10.1 of the Sale and Servicing Agreement.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, xxxxx x xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto. Other forms of the verb "to Grant"
shall have correlative meanings.
"Holder" means, as the context may require, a Certificateholder or a
Noteholder or both.
"Indemnified Parties" is defined in Section 8.2 of the Trust Agreement.
"Indenture" means the Indenture dated as of _________ __, 2001, between
Issuer and Indenture Trustee, as the same may be amended and supplemented from
time to time.
"Indenture Trustee" means __________________________, not in its
individual capacity but as trustee under the Indenture, or any successor trustee
under the Indenture.
"Independent" means, when used with respect to any specified Person,
that the person (a) is in fact independent of Issuer, any other obligor upon the
Notes, Seller and any Affiliate of any of the foregoing persons, (b) does not
have any direct financial interest or any material indirect financial interest
(other than less than 5% of the outstanding amount of any publicly traded
security) in Issuer, any such other obligor, Seller or any Affiliate of any of
the foregoing Persons and (c) is not connected with Issuer, any such other
obligor, Seller or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
Appendix X, Page 11
61
"Initial Principal Balance" means, in respect of a Receivable, the
amount advanced under the Receivable toward the purchase price of the Financed
Vehicle and related costs, including accessories, service and warranty
contracts, insurance premiums, other items customarily financed as part of
retail motor vehicle loans and/or retail installment sales contracts and other
fees charged by a Seller Affiliate or the applicable Dealer and included in the
amount to be financed, the total of which is shown as the initial principal
balance in the note and security agreement or retail installment sale contract
evidencing and securing such Receivable.
"Insolvency Event" means, for a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver (including any
receiver appointed under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended), liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by such Person to
the entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
"Insurance Policies" means, all credit life and disability insurance
policies maintained by the Obligors and all Physical Damage Insurance Policies.
"Interest Period" means, with respect to any specified Payment Date,
the period from and including the Closing Date (in the case of the first Payment
Date) and thereafter from and including the preceding Payment Date to but
excluding such specified Payment Date.
"Interest Rate" means, with respect to the (a) Class A-1 Notes, the
Class A-1 Interest Rate and (b) Class A-2 Notes, the Class A-2 Interest Rate.
"Issuer" means Xxxxx Fargo Auto Trust 200__-__.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of Issuer by any one of its Authorized Officers and delivered
to Indenture Trustee.
"Lien" means a security interest, lien, charge, pledge, preference,
participation interest or encumbrance of any kind, other than liens for taxes
not yet due and payable, mechanics' or materialmen's liens and other liens for
work, labor or materials, and any other liens that may attach by operation of
law.
"Liquidation Proceeds" means, with respect to any Receivable that has
become a Defaulted Receivable, (a) insurance proceeds received by Servicer with
respect to the Insurance Policies, (b) amounts received by Servicer in
connection with such Defaulted Receivable
Appendix X, Page 12
62
pursuant to the exercise of rights under that Receivable and (c) the monies
collected by Servicer (from whatever source, including proceeds of a sale of a
Financed Vehicle, a deficiency balance recovered after the charge-off of the
related Receivable or as a result of any Dealer Recourse) on such Defaulted
Receivable net of any expenses incurred by Servicer in connection therewith and
any payments required by law to be remitted to the Obligor.
"Minimum Specified Reserve Balance" with respect to any Payment Date
means the lesser of (i) $__________ and (ii) the aggregate outstanding principal
amount of the Notes and the Certificate Balance (after giving effect to any
distributions on the Notes and Certificates on such Payment Date).
"Moody's" means Xxxxx'x Investors Service, Inc., or its successor.
"Motor Vehicle" means a new or used automobile, minivan, sport utility
vehicle, passenger van or light duty truck.
"Motor Vehicle Loan" means a Direct Loan or retail installment sales
contract secured by a Motor Vehicle originated by a Seller Affiliate or another
financial institution.
"Note" means a Class A-1 Note or Class A-2 Note.
"Note Depository Agreement" means the agreement among Issuer, Servicer
and The Depository Trust Company, as the initial Clearing Agency, dated as of
the Closing Date, relating to the Notes, as the same may be amended or
supplemented from time to time.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Sale and Servicing
Agreement.
"Noteholder" means the Person in whose name a Note is registered on the
Note Register.
"Note Owner" means, with respect to a Book-Entry Note, the person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"Note Pool Factor" for each class of Notes as of the close of business
on a Payment Date means a seven-digit decimal figure equal to the outstanding
principal balance of such class of Notes divided by the original outstanding
principal balance of such class of Notes. The Note Pool Factor for each class of
Notes will be 1.0000000 as of the Cutoff Date; thereafter, the Note Pool Factor
for each class of Notes will decline to reflect reductions in the outstanding
principal balance of such class of Notes.
"Note Register" and "Note Registrar" are defined in Section 2.4 of the
Indenture.
"Noteholders' Distributable Amount" means, for any Payment Date, the
sum of the Noteholders' Principal Distributable Amount and the Noteholders'
Interest Distributable Amount.
Appendix X, Page 13
63
"Noteholders' Interest Distributable Amount" means, for any Payment
Date, the sum of (a) the Class A-1 Noteholders' Interest Distributable Amount
and (b) the Class A-2 Noteholders' Interest Distributable Amount for such
Payment Date.
"Noteholders' Monthly Principal Distributable Amount" means, for any
Payment Date, the Noteholders' Percentage of the Principal Distribution Amount.
"Noteholders' Percentage" means 100% until the point in time at which
the Class A-1 Notes and Class A-2 Notes have been paid in full and zero
thereafter.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
business on any specified Payment Date, the excess of the Noteholders' Monthly
Principal Distributable Amount for such Payment Date and any outstanding
Noteholders' Principal Carryover Shortfall from the Payment Date preceding the
specified Payment Date over the amount in respect of principal that is actually
deposited in the Note Distribution Account on the specified Payment Date.
"Noteholders' Principal Distributable Amount" means, for any Payment
Date, the sum of the Noteholder's Monthly Principal Distributable Amount for
such Payment Date and the Noteholders' Principal Carryover Shortfall as of the
close of business on the preceding Payment Date; provided that the Noteholders'
Principal Distributable Amount shall not exceed the aggregate outstanding
principal balance of the Notes. In addition, on the Final Scheduled Payment Date
of each class of Notes, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect to
the other amounts to be deposited in the Note Distribution Account on such
Payment Date and allocable to principal) to be paid to Noteholders of such class
to reduce the Outstanding Amount of such class of Notes to zero.
"Obligor" means, with respect to a Receivable, the borrower or
co-borrowers under the related Receivable and any co-signer of the Receivable or
other Person who owes or may be primarily or secondarily liable for payments
under such Receivable.
"Officer's Certificate" means: (a) for purposes of the Indenture, a
certificate signed by any Authorized Officer of Issuer, under the circumstances
described in, and otherwise complying with, the applicable requirements of
Section 11.1 and TIA Section 314, and delivered to Indenture Trustee; and (b)
otherwise, a certificate signed by the chairman, the president, any vice
president or the treasurer of Seller or Servicer, as the case may be, and
delivered to Indenture Trustee. Unless otherwise specified, any reference in the
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
any Authorized Officer of Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Indenture, be employees of or
counsel to Issuer and who shall be satisfactory to Issuer, Owner Trustee or
Indenture Trustee, as applicable, and which opinion or opinions shall be
addressed to Issuer, Owner Trustee, or Indenture Trustee, as applicable and
shall be in form and substance satisfactory to the Issuer, Owner Trustee, and
Indenture Trustee, as applicable.
"Original Pool Balance" means the Pool Balance as of the Cutoff Date,
which is $_____________.
Appendix X, Page 14
64
"Originator" means, with respect to any Direct Loan or retail
installment sales contract, the Seller Affiliate that was the lender with
respect to such Direct Loan or that acquired such Direct Loan or retail
installment sales contract from a Dealer or other Person.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(a) Notes theretofore canceled by Note Registrar or delivered to Note
Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with Indenture Trustee or any
Paying Agent in trust for the Holders of such Notes (provided that if such Notes
are to be redeemed, notice of such redemption has been duly given pursuant to
the Indenture or provision therefor, satisfactory to Indenture Trustee); and
(c) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof satisfactory
to Indenture Trustee is presented that any such Notes are held by a bona fide
purchaser;
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
Issuer, any other obligor upon the Notes, Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be Outstanding, except
that, in determining whether Indenture Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes that a Responsible Officer of Indenture Trustee either
actually knows to be so owned or has received written notice thereof shall be so
disregarded. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not Issuer, any other obligor upon the Notes, Seller or any Affiliate
of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes,
or class of Notes, as applicable, Outstanding at the date of determination.
"Owner" means each Person who is the beneficial owner of a Certificate.
In the case of any Book Entry Certificate, the Owner shall be such beneficial
owner as reflected in the records of the Clearing Agency or if a Clearing Agency
Participant is not the Owner, then as reflected in records of a Person
maintaining an account with such Clearing Agency (directly or indirectly, in
accordance with the rules of such Clearing Agency).
"Owner Trust Estate" means all right, title and interest of Issuer in
and to the property and rights assigned to Issuer pursuant to Article II of the
Sale and Servicing Agreement, all funds on deposit from time to time in the
Trust Accounts and the Certificate Distribution Account and all other property
of Issuer from time to time, including any rights of Owner Trustee and Issuer
pursuant to the Sale and Servicing Agreement.
Appendix X, Page 15
65
"Owner Trustee" means ___________________, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
the Trust Agreement, and any successor Owner Trustee hereunder.
"Payaheads" means early payments by or on behalf of Obligors on
Precomputed Receivables which, in accordance with the Servicer's customary
practices, do not constitute scheduled payments or full prepayments and are
applied to principal and interest in a subsequent period.
"Payahead Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Paying Agent" means: (a) when used in the Indenture or otherwise with
respect to the Notes, Indenture Trustee or any other Person that meets the
eligibility standards for Indenture Trustee specified in Section 6.11 of the
Indenture and is authorized by Issuer to make the payments to and distributions
from the Collection Account and the Note Distribution Account, including payment
of principal of or interest on the Notes on behalf of Issuer; and (b) when used
in the Trust Agreement or otherwise with respect to the Certificates, Owner
Trustee or any other paying agent or co-paying agent appointed pursuant to
Section 3.9 of the Trust Agreement.
"Payment Date" means the 15th day of each month (or, if the 15th day is
not a Business Day, the next succeeding Business Day), commencing ___________
__, 2001.
"Person" means a legal person, including any individual, corporation,
estate, partnership, limited liability company, joint venture, association,
joint stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Physical Damage Insurance Policy" means a theft and physical damage
insurance policy maintained by the Obligor under a Receivable, providing
coverage against loss or damage to or theft of the related Financed Vehicle.
"Physical Property" is defined in the definition of "Delivery" above.
"Pool Balance" means, at any time, the aggregate Principal Balance of
the Receivables (excluding Purchased Receivables and Defaulted Receivables) at
such time.
"Precomputed Receivable" means (i) an Actuarial Receivable, (ii) a Rule
of 78's Receivable or (iii) a Sum of Periodic Balances Receivable.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
Appendix X, Page 16
66
"Principal Balance" means, as of any time, for any Receivable, the
principal balance of such Receivable under the terms of the Receivable
determined in accordance with the Servicer's customary practices.
"Principal Distribution Amount" means, for any Payment Date, the sum of
(a) the Available Principal for such Payment Date, and (b) the aggregate amount
of Realized Losses for the related Collection Period.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Purchase Agreement" means each agreement dated as of _________ __,
2001 between a Seller Affiliate and Seller under which such Seller Affiliate
sells Receivables to Seller.
"Purchase Amount" of any Receivable means, with respect to any Deposit
Date and the last day of the related Collection Period, an amount equal to the
sum of (a) the outstanding Principal Balance of such Receivable as of the last
day of such Collection Period and (b) the amount of accrued and unpaid interest
on such Principal Balance at the related Contract Rate from the date a payment
was last made by or on behalf of the Obligor through and including the last day
of such Collection Period, in each case after giving effect to the receipt of
monies collected on such Receivable in such Collection Period.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by Servicer pursuant to Section
4.7 of the Sale and Servicing Agreement or repurchased by Seller pursuant to
Section 3.3 of the Sale and Servicing Agreement.
"Rating Agencies" means [Moody's, Standard & Poor's and Fitch.]
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that none of
the Rating Agencies shall have notified Seller, Servicer, Owner Trustee or
Indenture Trustee in writing that such action will, in and of itself, result in
a reduction or withdrawal of the then current rating of any class of Notes, or
the Certificates.
"Realized Losses" means, for any Collection Period, the aggregate
Principal Balances of any Receivables that became Defaulted Receivables during
such Collection Period.
"Receivable" means each Motor Vehicle Loan described in the Schedule of
Receivables, but excluding (i) Defaulted Receivables to the extent the Principal
Balances thereof have been deposited in the Collection Account and (ii) any
Purchased Receivables.
"Receivable Files" is defined in Section 3.4 of the Sale and Servicing
Agreement.
"Record Date" means, with respect to any Payment Date or Redemption
Date, the close of business on the day immediately preceding such Payment Date
or Redemption Date; or, if Definitive Notes or Definitive Certificates have been
issued, the last day of the month preceding such Payment Date.
Appendix X, Page 17
67
"Redemption Date" means in the case of a redemption of the Notes
pursuant to Section 10.1(a) of the Indenture or a payment to Noteholders
pursuant to Section 10.1(b) of the Indenture, the Payment Date specified by
Servicer or Issuer pursuant to such Section 10.1(a) or (b).
"Redemption Price" means (a) in the case of a redemption of the Notes
pursuant to Section 10.1(a) of the Indenture, an amount equal to the unpaid
principal amount of the then outstanding Class A-2 Notes plus accrued and unpaid
interest thereon to but excluding the Redemption Date, (b) in the case of a
payment made to Noteholders pursuant to Section 10.1(b) of the Indenture, the
amount on deposit in the Note Distribution Account, but not in excess of the
amount specified in clause (a) or (c) in the case of a redemption of the
Certificates pursuant to Section 9.3(a) of the Trust Agreement, an amount equal
to the Certificate Balance of the Certificates plus accrued interest thereon but
excluding such Redemption Date.
"Regular Principal Distributable Amount" means the excess, if any, of
(i) the Outstanding Amount over (ii) the Pool Balance minus the Specified
Overcollateralization Amount.
"Required Rating" means a rating with respect to short term deposit
obligations of at least P-1 by Moody's and at least A-1 by Standard & Poor's.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.8 of the Sale and Servicing Agreement.
"Reserve Account Deposit" means an amount equal to $__________.
"Reserve Account Property" means the Reserve Account, the Reserve
Account Deposit and all proceeds of the Reserve Account and the Reserve Account
Deposit, including all securities, investments, general intangibles, financial
assets and investment property from time to time credited to and any security
entitlement to the Reserve Account.
"Reserve Account Transfer Amount" means, with respect to any Payment
Date, an amount equal to the lesser of (a) the amount of cash or other
immediately available funds on deposit in the Reserve Account on such Payment
Date (before giving effect to any withdrawals therefrom relating to such Payment
Date) or (b) the amount, if any, by which (i) the sum of the Servicing Fee for
the related Collection Period and all accrued and unpaid Servicing Fees for
prior Collection Periods, the Noteholders' Interest Distributable Amount, the
Certificateholders' Interest Distributable Amount, the Noteholders' Principal
Distributable Amount and the Certificateholders' Principal Distributable Amount
for such Payment Date exceeds (ii) the sum of the Available Interest and the
Available Principal for such Payment Date.
"Responsible Officer" means, with respect to Indenture Trustee, any
officer within the Corporate Trust Office of Indenture Trustee, including any
Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary, or any other officer of Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
Appendix X, Page 18
68
"Rule of 78's Receivable" means a Receivable that provides for the
payment by the Obligor of a specified total amount of payments, payable in equal
monthly installments on each due date, which total represents the principal
amount financed and add-on interest in an amount calculated at the stated
Contract Rate for the term of the Receivable and allocated to each monthly
payment based upon a fraction, the numerator of which is the number of payments
scheduled to have been made prior to the due date for such monthly payment on
such Receivable and the denominator of which is the sum of all such numbers of
payments to be made until the maturity of such Receivable.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
among Issuer, Indenture Trustee, Xxxxx Fargo, as Servicer, and Xxxxx Fargo Auto
Receivables Corporation, as Seller, dated as of ________, 2001, as the same may
be amended and supplemented from time to time.
"Schedule of Receivables" means, with respect to the Motor Vehicle
Loans to be conveyed to Seller by each Seller Affiliate and to Issuer by Seller,
the list identifying such Motor Vehicle Loans delivered to Indenture Trustee at
the Closing.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Securities Intermediary" is defined in Section 5.8 of the Sale and
Servicing Agreement.
"Seller" means Xxxxx Fargo Auto Receivables Corporation, a Delaware
corporation, and any successor pursuant to Section 6.4 of the Sale and Servicing
Agreement.
"Seller Affiliate" means Xxxxx Fargo and each Affiliate of the Seller
that has originated. Receivables sold by Xxxxx Fargo to the Seller.
"Servicer" means Xxxxx Fargo and each Successor Servicer.
"Servicer Termination Event" means an event specified in Section 8.1 of
the Sale and Servicing Agreement.
"Servicer's Report" means a report of Servicer delivered pursuant to
Section 4.9 of the Sale and Servicing Agreement, substantially in the form of
Exhibit C to that agreement.
"Servicing Fee" is defined in Section 4.8 of the Sale and Servicing
Agreement.
"Servicing Fee Rate" means [1.00]% per annum.
"Simple Interest Method" means the method of allocating a fixed level
payment monthly installments between principal and interest, pursuant to which
such payment is allocated first to accrued and unpaid interest at the Contract
Rate on the unpaid principal balance and the remainder of such payment is
allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
Appendix X, Page 19
69
"Specified Overcollateralization Amount" means (x) the greater of (x)
__% of the Principal Balance of the Receivables and (y) $_____, or (y), if less,
the Outstanding Amount.
"Specified Reserve Account Balance" means, for any Payment Date, the
greater of (a) ___% of the sum of the aggregate outstanding principal amount of
each class of Notes plus the outstanding Certificate Balance on such Payment
Date (after giving effect to all payments on the Notes and distributions with
respect to the Certificates to be made on or prior to such Payment Date), and
(b) the Minimum Specified Reserve Balance as of such Payment Date.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., or its successor.
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"Successor Servicer" is defined in Section 3.7(e) of the Indenture.
"Sum of Periodic Balances Receivable" means a Receivable that provides
for the payment by the Obligor of a specified total amount of payments, payable
in equal monthly installments on each due date, which total represents the
principal amount financed and add-on interest in an amount calculated at the
stated Contract Rate for the term of the Receivable and allocated to each
monthly payment based upon a fraction, the numerator of which is the principal
balance of such Receivable immediately prior to the due date for such monthly
payment and the denominator of which is the sum of all principal balances for
each monthly payment to be made until the maturity of such Receivable.
"Supplemental Servicing Fee" is defined in Section 4.8 of the Sale and
Servicing Agreement.
"Total Distribution Amount" means, for each Payment Date, the sum of
(a) the Available Interest, (b) the Available Principal and (c) the Reserve
Account Transfer Amount, in each case in respect of such Payment Date.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" is defined in Section 5.1 of the Sale and Servicing
Agreement.
"Trust Agreement" means the Trust Agreement dated as of _______ __,
2001, between Seller and Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
the Indenture for the benefit of the
Appendix X, Page 20
70
Noteholders (including all property and interests Granted to Indenture Trustee),
including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"Trust Property" shall have the meaning set forth in Section 2.1 of the
Sale and Servicing Agreement.
"UCC" means the Uniform Commercial Code, as in effect from time to time
in the relevant jurisdiction.
"Xxxxx Fargo" means Xxxxx Fargo Bank, N.A., a national banking
association.
"Xxxxx Fargo & Company" means Xxxxx Fargo & Company, a registered bank
holding company.
Appendix X, Page 21
