Exhibit 4.1
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USAA ACCEPTANCE, LLC
Depositor
USAA FEDERAL SAVINGS BANK
Seller and Servicer
and
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Trustee and Collateral Agent
on behalf of the Certificateholders
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FORM OF POOLING AND SERVICING AGREEMENT
Dated as of ________ __, ______
$__________
USAA Auto Loan Grantor Trust ______
_____% Asset Backed Certificates, Class A
_____% Asset Backed Certificates, Class B
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Table of Contents
Page
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions..................................................1
Section 1.2 Usage of Terms..............................................14
Section 1.3 Simple Interest Method; Allocations.........................14
Section 1.4 References..................................................14
Section 1.5 Section References..........................................14
ARTICLE II
Section 2.1 Creation of Trust...........................................14
ARTICLE III
Section 3.1 Conveyance of Receivables...................................15
ARTICLE IV
Section 4.1 Acceptance by Trustee.......................................15
ARTICLE V
THE RECEIVABLES
Section 5.1 Representations and Warranties of Depositor;
Conditions Relating to Receivables..........................16
Section 5.2 Repurchase Upon Breach or Failure of a Condition............19
Section 5.3 Custody of Receivable Files.................................19
Section 5.4 Duties of Servicer as Custodian.............................20
Section 5.5 Instructions; Authority to Act..............................21
Section 5.6 Custodian's Indemnification.................................21
Section 5.7 Effective Period and Termination............................21
ARTICLE VI
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 6.1 Duties of Servicer..........................................22
Section 6.2 Collection of Receivable Payments...........................22
Section 6.3 Realization Upon Receivables................................23
Section 6.4 Maintenance of Security Interests in Financed Vehicles......23
Section 6.5 Covenants of Servicer.......................................24
Section 6.6 Purchase of Receivables Upon Breach.........................24
Section 6.7 Servicing Fee...............................................25
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Section 6.8 Servicer's Certificate......................................25
Section 6.9 Annual Statement as to Compliance...........................25
Section 6.10 Annual Audit Report.........................................26
Section 6.11 Reports to Certificateholders and the Rating Agencies.......26
Section 6.12 Insurance...................................................27
ARTICLE VII
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 7.1 Accounts....................................................27
Section 7.2 Collections.................................................29
Section 7.3 Advances....................................................29
Section 7.4 Additional Deposits.........................................30
Section 7.5 Distributions...............................................30
Section 7.6 Reserve Account.............................................32
Section 7.7 Net Deposits................................................32
Section 7.8 Statements to Certificateholders............................32
ARTICLE VIII
YIELD SUPPLEMENT AGREEMENT
Section 8.1 Yield Supplement Agreement..................................33
Section 8.2 Yield Supplement Account....................................34
ARTICLE IX
THE CERTIFICATES
Section 9.1 The Certificates............................................36
Section 9.2 Execution, Authentication and Delivery of Certificates......36
Section 9.3 Registration of Transfer and Exchange of Certificates.......36
Section 9.4 Mutilated, Destroyed, Lost, or Stolen Certificates..........38
Section 9.5 Persons Deemed Owners.......................................38
Section 9.6 Access to List of Certificateholders' Names and Addresses...38
Section 9.7 Maintenance of Office or Agency.............................39
Section 9.8 Book-Entry Certificates.....................................39
Section 9.9 Notices to Clearing Agency..................................40
Section 9.10 Definitive Certificates.....................................40
Section 9.11 Appointment of Paying Agent.................................41
Section 9.12 Authenticating Agent........................................41
Section 9.13 Actions of Certificateholders...............................43
ARTICLE X
THE DEPOSITOR
Section 10.1 Representations of Depositor................................44
Section 10.2 Liability of Depositor; Indemnities.........................45
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Section 10.3 Merger or Consolidation of Depositor........................45
Section 10.4 Limitation on Liability of Depositor and Others.............45
Section 10.5 Depositor May Own Certificates..............................46
ARTICLE XI
THE SERVICER
Section 11.1 Representations of Servicer.................................46
Section 11.2 Liability of Servicer; Indemnities..........................47
Section 11.3 Merger or Consolidation of Servicer.........................48
Section 11.4 Limitation on Liability of Servicer and Others..............48
Section 11.5 Servicer Not To Resign......................................50
Section 11.6 Delegation of Duties........................................50
ARTICLE XII
EVENTS OF SERVICING TERMINATION
Section 12.1 Events of Servicing Termination.............................50
Section 12.2 Trustee to Act; Appointment of Successor....................52
Section 12.3 Notification to Certificateholders..........................52
Section 12.4 Waiver of Past Defaults.....................................52
ARTICLE XIII
THE TRUSTEE
Section 13.1 No Power to Engage in Business or to Vary Investments.......53
Section 13.2 Duties of Trustee...........................................53
Section 13.3 Trustee's Assignment of Repurchased Receivables and
Trustee's Certificate.......................................55
Section 13.4 Certain Matters Affecting the Trustee.......................55
Section 13.5 Trustee Not Liable for Certificates or Receivables..........57
Section 13.6 Trustee May Own Certificates................................58
Section 13.7 Trustee's Fees and Expenses.................................58
Section 13.8 Indemnity...................................................59
Section 13.9 Eligibility Requirements for Trustee........................59
Section 13.10 Resignation or Removal of Trustee...........................59
Section 13.11 Successor Trustee...........................................60
Section 13.12 Merger or Consolidation of Trustee..........................60
Section 13.13 Appointment of Co-Trustee or Separate Trustee...............61
Section 13.14 Representations and Warranties of Trustee...................62
Section 13.15 Tax Returns.................................................63
Section 13.16 Trustee May Enforce Claims Without Possession of
Certificates................................................63
Section 13.17 Suits for Enforcement.......................................63
Section 13.18 Maintenance of Office or Agency.............................63
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ARTICLE XIV
TERMINATION
Section 14.1 Termination of the Trust....................................64
Section 14.2 Optional Purchase of All Receivables........................65
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Amendment...................................................65
Section 15.2 Protection of Title to Trust................................66
Section 15.3 Limitation on Rights of Certificateholders..................68
Section 15.4 Governing Law...............................................69
Section 15.5 Notices.....................................................69
Section 15.6 Severability of Provisions..................................69
Section 15.7 Assignment..................................................69
Section 15.8 Certificates Nonassessable and Fully Paid...................70
Section 15.9 Third-Party Beneficiaries...................................70
Schedule A: List of Receivables
Schedule B: Location of Receivables Files
Exhibit A: Form of Class A Certificate
Exhibit B: Form of Class B Certificate
Exhibit C-1: Trustee's Certificate
Exhibit C-2: Trustee's Certificate
Exhibit D: Servicer's Report
Exhibit E: Form of Certificateholder Report
Exhibit F: Form of Yield Supplement Agreement
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This Pooling and Servicing Agreement, dated as of _____ __, ______, is
made with respect to the formation of the USAA Auto Grantor Trust ______
(the "Trust"), among USAA Acceptance, LLC, a Delaware limited liability
company (the "Depositor"), USAA Federal Savings Bank, a federally chartered
savings association (the "Seller" and the "Servicer" in its respective
capacities as such), and _________________, a banking corporation organized
under the laws of the State of _____________, as trustee (the "Trustee") and
as collateral agent with respect to the Reserve Account and the Yield
Supplement Account (in such capacity, the "Collateral Agent").
WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Account Property" means the Reserve Account, the Yield Supplement
Account and all amounts, Financial Assets and other investments held from time
to time in the Reserve Account and the Yield Supplement Account and all
proceeds of the foregoing.
"Advance" as of a Record Date means any payment made by the Servicer
pursuant to Section 7.3.
"Agent" means any of the Paying Agent, the Collateral Agent, the
Authenticating Agent and the Transfer Agent.
"Agreement" means this Pooling and Servicing Agreement and all amendments
and supplements hereto.
"Amount Financed" in respect of a Receivable means the amount advanced
under the Receivable toward the purchase price of the Financed Vehicle and
related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of interest stated in the Receivable.
"Authenticating Agent" shall have the meaning specified in Section 9.12.
"Authorized Officer" means any officer in the Corporate Trust Department
of the Trustee with direct responsibility for the administration of this
Agreement.
"Available Interest" means, with respect to any Payment Date, the excess
of (a) the sum of (i) Interest Collections for such Payment Date, [(ii) the
Yield Supplement Amount for such Payment Date] and (iii) all Advances made by
the Servicer with respect to such Payment Date
pursuant to Section 7.3(a), over (b) the amount of Outstanding Advances to be
reimbursed on or with respect to such Payment Date pursuant to Section 7.3(a).
"Available Principal" means, with respect to any Payment Date, the sum of
the following amounts with respect to the preceding Collection Period: (i)
that portion of all Collections on the Receivables received during such
Collection Period and allocable to principal in accordance with the terms of
the Receivables and the Servicer's customary servicing procedures, (ii) to the
extent attributable to principal, the Purchase Amount received with respect to
each Receivable repurchased by the Depositor or purchased by the Servicer
under an obligation which arose during the related Collection Period and (iii)
Liquidation Proceeds, to the extent allocable to principal, received during
such 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.
"Available Reserve Amount" means, as of any Payment Date, the lesser of
(i) the amount on deposit in the Reserve Account (exclusive of earnings and
income from the investment of funds therein) as of such date and (ii) the
Specified Reserve Account Balance as of such date.
"Book-Entry Certificates" means beneficial interests in the Certificates
described in Section 9.8, the ownership and transfers of which shall be made
through book entries by a Clearing Agency as described in Section 9.8.
"Business Day" means a day, other than a Saturday or a Sunday, on which
banking institutions or trust companies located in the State of New York and
the State of Texas are open for the purpose of conducting a commercial banking
business.
"Certificate" means any Class A Certificate or Class B Certificate.
"Certificateholder" or "Holder" means the Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent, request, waiver or demand pursuant to this
Agreement, the interest evidenced by any Certificate registered in the name of
the Depositor, the Servicer or any Person controlling, controlled by, or under
common control with the Depositor or the Servicer shall not be taken into
account in determining whether the requisite percentage necessary to effect
any such consent, request or waiver shall have been obtained; provided,
however, that in determining whether the Trustee shall be protected in relying
upon any such consent, request, waiver or demand, only Certificates that an
Authorized Officer of the Trustee knows to be so owned shall be so
disregarded.
"Certificate Owner" means, with respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a direct or indirect Clearing
Agency Participant.
"Certificate Register" means the register maintained pursuant to Section
9.3.
"Class A Certificate" means a certificate executed by the Trustee on
behalf of the Trust and authenticated by the Trustee, substantially in the
form of Exhibit A hereto.
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"Class A Certificateholder" or "Class A Holder" means the Person in whose
name a Class A Certificate shall be registered in the Certificate Register,
except that, solely for the purpose of giving any consent, request or waiver
pursuant to this Agreement, the interest evidenced by any Class A Certificate
registered in the name of the Depositor, the Servicer or any Person actually
known to an Authorized Officer of the Trustee to be an Affiliate of the
Depositor or the Servicer shall not be taken into account in determining
whether the requisite percentage necessary to effect any such consent, request
or waiver shall have been obtained.
"Class A Certificate Balance" means, at any time, the Original Class A
Certificate Balance, as reduced by all principal amounts distributed to Class
A Certificateholders prior to such time.
"Class A Certificate Owner" means, with respect to a Book-Entry
Certificate representing a beneficial interest in the Class A Certificates,
the Person who is the owner of such Book-Entry Certificate, as reflected on
the books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant in
accordance with the rules, regulations and procedures of such Clearing
Agency).
"Class A Distribution Account" means the account established and
maintained as such pursuant to Section 7.1.
"Class A Interest Carryover Shortfall" means, (i) with respect to the
initial Payment Date, zero and (ii) with respect to any other Payment Date,
the excess of Class A Monthly Interest for the preceding Payment Date, and any
outstanding Class A Interest Carryover Shortfall on such preceding Payment
Date, over the amount in respect of interest that is actually deposited in the
Class A Distribution Account on such preceding Payment Date, plus 30 days of
interest on such excess, to the extent permitted by law, at the Class A
Pass-Through Rate.
"Class A Interest Distribution" means, with respect to any Payment Date,
the sum of Class A Monthly Interest for such Payment Date and the Class A
Interest Carryover Shortfall for such Payment Date.
"Class A Monthly Interest" means, with respect to any Payment Date,
one-twelfth (or in the case of the first Payment Date, ____) of the Class A
Pass-Through Rate multiplied by the Class A Certificate Balance as of the
preceding Payment Date (after giving effect to all payments of principal made
on such Payment Date) or, in the case of the first Payment Date, as of the
Closing Date.
"Class A Monthly Principal" means, with respect to any Payment Date, the
Class A Percentage of Available Principal for such Payment Date plus the Class
A Percentage of Realized Losses with respect to the related Collection Period.
"Class A Pass-Through Rate" means ____% per annum, calculated on the
basis of a 360-day year comprised of twelve 30-day months.
"Class A Percentage" means ____%.
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"Class A Pool Factor" means, with respect to any Payment Date, the Class
A Certificate Balance as of such Payment Date (after giving effect to all
payments of principal to be made on such Payment Date) divided by the Original
Class A Certificate Balance, expressed as a seven-digit decimal.
"Class A Principal Carryover Shortfall" means, (i) with respect to the
initial Payment Date, zero and (ii) with respect to any other Payment Date,
the excess of (x) Class A Monthly Principal for such Payment Date and (y) any
outstanding Class A Principal Carryover Shortfall from the preceding Payment
Date over the amount in respect of principal that is actually deposited in the
Class A Distribution Account on such Payment Date.
"Class A Principal Distribution" means, (i) with respect to the initial
Payment Date, the Class A Monthly Principal for such Payment Date and (ii)
with respect to any other Payment Date, the sum of Class A Monthly Principal
for such Payment Date and the Class A Principal Carryover Shortfall as of the
preceding Payment Date. In addition, on the Final Scheduled Payment Date, the
Class A Principal Distribution shall include any additional amount required to
reduce the outstanding principal balance of the Class A Certificates to zero.
"Class B Certificate" means a certificate executed by the Trustee on
behalf of the Trust and authenticated by the Trustee, substantially in the
form of Exhibit B hereto.
"Class B Certificateholder" or "Class B Holder" means the Person in whose
name a Class B Certificate shall be registered in the Certificate Register,
except that, solely for the purpose of giving any consent, request or waiver
pursuant to this Agreement, the interest evidenced by any Class B Certificate
registered in the name of the Depositor, the Servicer or any Person actually
known to an Authorized Officer of the Trustee to be an Affiliate of the
Depositor or the Servicer shall not be taken into account in determining
whether the requisite percentage necessary to effect any such consent, request
or waiver shall have been obtained.
"Class B Certificate Balance", at any time, equals the Original Class B
Certificate Balance, as reduced by all principal amounts distributed to Class
B Certificateholders prior to such time.
"Class B Certificate Owner" means, with respect to a Book-Entry
Certificate representing a beneficial interest in the Class B Certificates,
the Person who is the owner of such Book-Entry Certificate, as reflected on
the books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant in
accordance with the rules, regulations and procedures of such Clearing
Agency).
"Class B Distribution Account" means the account established and
maintained as such pursuant to Section 7.1.
"Class B Interest Carryover Shortfall" means, (i) with respect to the
initial Payment Date, zero and (ii) with respect to any other Payment Date,
the excess of Class B Monthly Interest for the preceding Payment Date, and any
outstanding Class B Interest Carryover Shortfall on such preceding Payment
Date, over the amount in respect of interest that is actually deposited in the
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Class B Distribution Account on such preceding Payment Date, plus 30 days of
interest on such excess, to the extent permitted by law, at the Class B
Pass-Through Rate.
"Class B Interest Distribution" means, with respect to any Payment Date,
the sum of Class B Monthly Interest for such Payment Date and the Class B
Interest Carryover Shortfall for such Payment Date.
"Class B Monthly Interest" means, with respect to any Payment Date,
one-twelfth (or in the case of the first Payment Date, ____) of the Class B
Pass-Through Rate multiplied by the Class B Certificate Balance as of the
preceding Payment Date (after giving effect to all payments of principal made
on such Payment Date) or, in the case of the first Payment Date, as of the
Closing Date.
"Class B Monthly Principal" means, with respect to any Payment Date, the
Class B Percentage of Available Principal for such Payment Date plus the Class
B Percentage of Realized Losses with respect to the related Collection Period.
"Class B Pass-Through Rate" means ___% per annum, calculated on the basis
of a year of twelve 30-day months.
"Class B Percentage" means ____%.
"Class B Pool Factor" means, with respect to any Payment Date, the Class
B Principal Balance as of such Payment Date (after giving effect to all
payments of principal to be made on such Payment Date) divided by the Original
Class B Certificate Balance, expressed as a seven-digit decimal.
"Class B Principal Carryover Shortfall" means, (i) with respect to the
initial Payment Date, zero and (ii) with respect to any other Payment Date,
the excess of the sum of (x) Class B Monthly Principal for such Payment Date
(y) and any outstanding Class B Principal Carryover Shortfall from the
preceding Payment Date over the amount in respect of principal that is
actually deposited in the Class B Distribution Account on such Payment Date.
"Class B Principal Distribution" means, (i) with respect to the initial
Payment Date, the Class B Monthly Principal for such Payment Date and (ii)
with respect to any other Payment Date, the sum of Class B Monthly Principal
for such Payment Date and the Class B Principal Carryover Shortfall as of the
preceding Payment Date. In addition, on the Final Scheduled Payment Date, the
Class B Principal Distribution shall include any additional amount required to
reduce the outstanding principal balance of the Class B Certificates to zero.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.
The initial Clearing Agency shall be The Depository Trust Company.
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"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 of securities deposited with the Clearing
Agency.
"Closing Date" means _______.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means _________________, a ________________, in its
capacity as collateral agent for the benefit of the Certificateholders with
respect to the Reserve Account and the Yield Supplement Account.
"Collection Account" means the account established and maintained
pursuant to Section 7.1.
"Collection Period" means, during the term of this Agreement, the
calendar month preceding each Payment Date, or in the case of the initial
Collection Period, the period from the Cut-off Date to __________. With
respect to any Determination Date, Deposit Date or Payment Date, the "related
Collection Period" shall mean the Collection Period preceding the month in
which such Determination Date, Deposit Date or Payment Date occurs.
"Collections" mean all collections on the Receivables.
"Contract Rate" means, with respect to a Receivable, the rate per annum
of interest charged to the Obligor on the outstanding Principal Balance of
such Receivable in accordance with the terms thereof.
"Corporate Trust Office" means the office of the Trustee at _______ or
such office at some other address as the Trustee may designate from time to
time by notice to the Certificateholders, the Depositor, the Servicer, the
Paying Agent, the Transfer Agent and Certificate Registrar.
"Cut-off Date" means _______.
"Cut-off 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 prior to the close of business by the Servicer on the day
prior to the Cut-off Date and allocable to principal in accordance with the
terms of the Receivable and the Servicer's customary servicing practices.
"Defaulted Receivable" means a Receivable (other than a Repurchased
Receivable) as to which either (i) more than 5% of a scheduled payment is 120
or more days delinquent as of the last day of the applicable Collection Period
or (ii) the Servicer has determined based on its usual collection practices
and procedures, during any Collection Period, that eventual payment in full of
the Amount Financed is unlikely, whichever occurs first.
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"Definitive Certificates" shall have the meaning specified in Section
9.8.
"Deposit Date" means the Business Day immediately preceding each Payment
Date.
"Depositor" shall mean USAA Acceptance, LLC, a Delaware limited liability
company, as the depositor of the Receivables under this Agreement, and each
successor to USAA Acceptance, LLC pursuant to Section 10.3.
"Depository Agreement" shall mean the agreement among the Depositor, the
Trustee and the initial Clearing Agency, substantially in the form attached
hereto as Exhibit F.
"Determination Date" means the __th calendar day of the month (or, if
such 10th calendar day is not a Business Day, the Business Day preceding such
__th calendar day) immediately succeeding the related Collection Period.
"Entitlement Order" has the meaning specified in Section 8-102(a)(8) of
the UCC.
"Event of Servicing Termination" means an event specified in Section
12.1.
"Excess Funds" shall have the meaning specified in Section 7.5(d).
"Xxxxxx Xxx" means Xxxxxx Mae or any successor thereto.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation or any successor
thereto.
"Final Scheduled Payment Date" means _______.
"Financed Vehicle" with respect to a Receivable means the new or used
automobile or light-duty truck, together with all accessions thereto, securing
an Obligor's indebtedness under such Receivable.
"Financial Asset" has the meaning specified in Section 8-102(a)(9) of the
UCC.
"Interest Collections" mean, with respect to any Payment Date, the sum of
the following amounts for the preceding Collection Period: (i) that portion of
the Collections on the Receivables received during such Collection Period that
is allocable to interest in accordance with the terms of the Receivables and
the Servicer's customary servicing procedures, (ii) Liquidation Proceeds, to
the extent allocable to interest, received during such Collection Period,
(iii) all Recoveries and (iv) to the extent attributable to interest, the
Purchase Amount received with respect to each Receivable repurchased by the
Depositor or purchased by the Servicer under an obligation which arose during
the related Collection Period. "Interest Collections" 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.
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"Lien" means a security interest, lien, charge, pledge or encumbrance of
any kind other than tax liens, mechanics' liens or any other liens that attach
to a Receivable by operation of law.
"Liquidation Proceeds" means (i) insurance proceeds received by the
Servicer and (ii) the monies collected by the Servicer (from whatever source,
including but not limited to proceeds of a Financed Vehicle which is sold
after repossession) during a Collection Period on a Defaulted Receivable net
of any payments required by law to be remitted to the Obligor.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Obligor" on a Receivable means the purchaser or the co-purchasers of the
Financed Vehicle purchased in part or in whole by the execution and delivery
of such Receivable or any other Person who owes or may be liable for payments
under such Receivable.
"Officer's Certificate" means a certificate signed by the chairman of the
board, the president, the treasurer, the controller, any executive or senior
vice president or any vice president of the Depositor or Servicer, as
appropriate.
"Opinion of Counsel" means a written opinion of counsel (who may be
counsel to the Depositor or the Servicer) acceptable in form and substance to
the Trustee.
"Optional Purchase Percentage" means _____________%.
"Original Pool Balance" means $_____________.
"Original Pool Balance" means the Pool Balance as of the Cut-off Date, as
specified in this Agreement.
"Outstanding Advances" means, as of any date, the aggregate of all
Advances made by the Servicer with respect to prior Payment Dates which have
not been reimbursed pursuant to Section 7.3.
"Outstanding Receivable" means, as of the time of reference thereto, a
Receivable that (i) has not been fully paid, (ii) has not become a Defaulted
Receivable, and (iii) has not become a Repurchased Receivable.
"Paying Agent" shall have the meaning specified in Section 9.11 and shall
initially be _________________.
"Payment Date" means, for each Collection Period, the __th day of the
following month, or if the __th day is not a Business Day, the next following
Business Day, commencing on _________, ___.
"Permitted Investments" means, at any time, any one or more of the
following obligations and securities:
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(i) obligations guaranteed as to timely payment of interest and
principal of the United States of America or any agency thereof, provided
such obligations are backed by the full faith and credit of the United
States of America;
(ii) general obligations of or obligations guaranteed as to the
timely payment of interest and principal by any state of the United
States of America or the District of Columbia then rated A-1+ or AAA by
Standard & Poor's and P-1 or Aaa by Moody's or such lower ratings (as
approved in writing by the Rating Agencies) as will not result in the
qualification, downgrading or withdrawal of the ratings then assigned to
the Certificates by the Rating Agencies;
(iii) commercial paper which is then rated P-1 by Moody's and A-1+
by Standard & Poor's , or such lower rating categories (as approved in
writing by the Rating Agencies) as will not result in the qualification,
downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies;
(iv) certificates of deposit, demand or time deposits, federal funds
or banker's acceptances issued by any depository institution or trust
company (including the Trustee acting in its commercial banking capacity)
incorporated under the laws of the United States or of any state thereof
or incorporated under the laws of a foreign jurisdiction with a branch or
agency located in the United States of America and subject to supervision
and examination by federal or state banking authorities, provided that
the short term unsecured deposit obligations of such depository
institution or trust company is then rated P-1 by Moody's and A-1+ by
Standard & Poor's or such lower rating categories (as approved in writing
by the Rating Agencies) as will not result in the qualification,
downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies;
(v) demand or time deposits of, or certificates of deposit issued
by, any bank, trust company, savings bank or other savings institution
provided that such deposits or certificates of deposit are fully insured
by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation (A) the short term unsecured debt
or deposits of which are rated P-1 by Moody's and A-1+ by Standard &
Poor's or the long-term unsecured debt of which are rated at least Aaa by
Moody's and AAA by Standard & Poor's or (B) are otherwise approved in
writing by the Rating Agencies as investments which will not result in
the qualification, downgrading or withdrawal of the ratings then assigned
to the Certificates by the Rating Agencies;
(vii) repurchase obligations with respect to any security described
in clauses (i), (ii) or (ix) herein or any other security issued or
guaranteed by the FHLMC, Xxxxxx Mae or any agency or instrumentality of
the United States of America which is backed by the full faith and credit
of the United States of America, in either case entered into with a
federal agency or a depository institution or trust company (acting as
principal) described in (iv) above or a corporation (acting as principal)
described in (vi) above;
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(viii) investments in money market funds, which funds (A) are not
subject to any sales, load or other similar charge; (B) are rated at
least AAAm or AAAm-G by Standard & Poor's and Aaa by Moody's and (C) are
invested solely in obligations described in clauses (i) through (vii)
above;
(ix) interests in any open-end or closed-end management type
investment company or investment trust (a) registered under the
Investment Company Act of 1940, as from time to time amended, the
portfolio of which is limited to obligations of the United States or
obligations guaranteed by the United States and to agreements to
repurchase such obligations, which agreements, with respect to principal
and interest, are at least 100% collateralized by such obligations marked
to market on a daily basis and pursuant to which the investment company
or investment trust is required to take delivery of such obligations
either directly or through an independent custodian designated in
accordance with the Investment Company Act of 1940, as from time to time
amended and (b) acceptable to the Rating Agencies (as approved in writing
by the Rating Agencies) as collateral for securities having ratings
equivalent to the ratings of the Certificates on the Closing Date; and
(x) such other investments where either (A) the short-term unsecured
debt or deposits of the obligor on such investments are rated A-1+ by
Standard & Poor's and P-1 by Moody's or (B) such investments are
acceptable to the Rating Agencies (as approved in writing by each of
them) and will not result in the qualification, downgrading or withdrawal
of the ratings then assigned to the Certificates by the Rating Agencies.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, trust,
limited liability company, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Pool Balance" as of any date of determination means the aggregate
Principal Balance of the Outstanding Receivables.
"Pool Factor" as of the last day of any Collection Period means the Pool
Balance divided by the Original Pool Balance, expressed as a seven-digit
decimal.
"Principal Balance" of a Receivable, as of any date of determination,
means the Amount Financed minus that portion of all payments received on or
prior to such date allocable to principal.
"Purchase Agreement" means the Receivables Purchase Agreement dated as of
[ ] between the Seller and the Depositor.
"Purchase Amount" with respect to a Repurchased Receivable or any
Receivable purchased by the Servicer pursuant to Section 14.2 means the sum,
as of the last day of the preceding Collection Period on which such Receivable
becomes such, of the Principal Balance
10
thereof plus accrued interest thereon at the weighted average of the Class A
Pass-Through Rate and the Class B Pass-Through Rate.
"Purchased Receivable" means, on any date of determination, a Receivable
as to which payment of the Purchase Amount has been made by the Depositor or
the Servicer pursuant to this Agreement.
"Qualified Institution" means a depository institution organized under
the laws of the United States of America or any one of the states thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or one of the States thereof and
subject to supervision and examination by federal or state banking authorities
which at all times has the Required Deposit Rating and, in the case of any
such institution organized under the laws of the United States of America,
whose deposits are insured by the FDIC.
"Qualified Trust Institution" means an institution organized under the
laws of the United States of America or any one of the states thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or one of the States thereof and
subject to supervision and examination by federal or state banking authorities
which at all times (i) is authorized under such laws to act as a trustee or in
any other fiduciary capacity, (ii) has not less than one billion dollars in
assets under fiduciary management, (iii) has a minimum net worth of at least
$50,000,000 and (iv) has a long term deposits rating of not less than "BBB-"
and "Baa3" from Standard & Poor's and Moody's, respectively.
"Rating Agencies" means Standard & Poor's and Xxxxx'x.
"Rating Agency Condition" means, with respect to any action, written
confirmation by each Rating Agency that such action will not result in a
withdrawal or reduction of its rating of the Class A Certificates or the Class
B Certificates.
"Realized Losses" mean, for any Collection Period and for each Receivable
that became a Defaulted Receivable during such Collection Period, the excess
of (i) the aggregate Principal Balance of such Receivable over (ii)
Liquidation Proceeds received with respect to such Receivable during such
Collection Period, to the extent allocable to principal.
"Receivable" means a motor vehicle installment loan contract and all
proceeds thereof and payments thereunder [(other than interest accrued and
unpaid as of the Cut-off Date)], which Receivable shall appear on Schedule A
to this Agreement.
"Receivable Files" means the documents specified in Section 5.3.
"Receivables Pool" means the pool of Receivables included in the Trust.
"Record Date" means, with respect to any Payment Date, the Business Day
prior to such Payment Date unless Definitive Certificates are issued, in which
case Record Date shall mean the last day of the immediately preceding calendar
month.
11
"Recoveries" means, with respect to any Defaulted Receivable and any
Collection Period after the Collection Period in which such Receivable became
a Defaulted Receivable, all monies received by the Servicer with respect to
any Defaulted Receivable during such Collection Period net of the sum of (i)
any fees, costs or expenses incurred by the Servicer in connection with the
collection of such Defaulted Receivable and the disposition of the Financed
Vehicle as permitted by Section 6.3 (to the extent not previously reimbursed)
and (ii) any payments required by law to be remitted to the Obligor, but, in
any event, not less than zero.
"Repurchase Date" shall have the meaning set forth in Section 5.2.
"Repurchased Receivable" means as of the last day of any Collection
Period a Receivable repurchased as of such date by the Depositor pursuant to
Section 5.2 or purchased as of such date by the Servicer pursuant to Section
6.6.
"Reserve Account Initial Deposit" means $_____________.
"Required Deposit Rating" means a short-term certificate of deposit
rating from Moody's of P-1 and from Standard & Poor's of A-1+ [and a long-term
unsecured debt rating of not less than] ["AA" by Standard & Poor's and "Aa2"
by Moody's].
"Reserve Account" shall mean the Reserve Account established and
maintained as such pursuant to Section 7.6.
"Reserve Account Securities Intermediary" shall have the meaning
specified in Section 7.1(c).
"Securities Act" means the Securities Act of 1933, as amended.
"Security Entitlement" has the meaning specified in Section 8-102(a)(17)
of the UCC.
"Seller" means USAA Federal Savings Bank in its capacity as the seller of
the Receivables under this Purchase Agreement, and each successor to USAA
Federal Savings Bank (in the same capacity).
"Servicer" means USAA Federal Savings Bank in its capacity as the
servicer of the Receivables under this Agreement, each successor to USAA
Federal Savings Bank (in the same capacity) pursuant to Section 11.3, and each
successor Servicer pursuant to Section 12.2.
"Servicer's Certificate" means a certificate, substantially in the form
of Exhibit D attached hereto, completed and executed by the Servicer by its
chairman of the board, the president, treasurer, controller or any executive
vice president, senior vice president or vice president pursuant to Section
6.8.
"Servicing Fee" means with respect to a Collection Period the fee payable
to the Servicer for services rendered during the Collection Period ending on
the last day of such Collection Period, determined pursuant to Section 6.7.
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"Servicing Fee Rate" means ______% per annum.
"Specified Reserve Account Balance" means, with respect to any Payment
Date, the lesser of (i) _____% of the Pool Balance as of the last day of the
preceding Collection Period and (ii) _____% of the Original Pool Balance.
Notwithstanding the foregoing, the Specified Reserve Account Balance may be
reduced to a lesser amount as determined by the Depositor upon satisfaction of
the Rating Agency Condition.
"Specified Yield Supplement Balance" means with respect to any Payment
Date, an amount equal to [at least the sum of all projected Yield Supplement
Amounts for all future Payment Dates, assuming that future scheduled payments
on the Receivables are made on their scheduled due dates; provided that if on
any date the Servicer shall fail to pay the amount payable under the Yield
Supplement Agreement in accordance with the terms thereof, then, in such
event, the Specified Yield Supplement Balance shall not thereafter be reduced
hereunder].
"Standard & Poor's" means Standard & Poor's Ratings Group, a division of
The XxXxxx-Xxxx Companies, Inc.
"Total Collections" means with respect to any Collection Period all
amounts deposited in the Collection Account relating to such Collection Period
pursuant to Sections 7.2, 7.3 and 7.4.
"Transfer Agent and Certificate Registrar" shall have the meaning
specified in Section 9.3 and shall initially be _________________.
"Trust" means the trust created by this Agreement, the estate of which
shall consist of the property transferred thereto pursuant to this Agreement;
funds deposited in the Collection Account, the Class A Distribution Account
and the Class B Distribution Account and such amounts as from time to time may
be held therein (including the Account Property related thereto) and proceeds
thereof; and the rights of the Trust to receive payments from the Reserve
Account in accordance with this Agreement (but not the Reserve Account itself)
[and certain rights under the Yield Supplement Agreement (but not the Yield
Supplement Account itself)].
"Trustee" means the Person executing this Agreement as Trustee, its
successor in interest pursuant to Section 13.12, and any successor Trustee
pursuant to Section 13.11.
"Trustee's Certificate" means a certificate completed and executed by an
Authorized Officer pursuant to Section 13.3 and substantially in the form
attached hereto as Exhibit C-1 or C-2.
"UCC" means the Uniform Commercial Code as in effect in the respective
jurisdiction.
["Yield Supplement Account" means the account established, maintained and
designated as the "Yield Supplement Account" pursuant to Section 8.2.
"Yield Supplement Account Property" has the meaning specified in Section
8.2(b).
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"Yield Supplemental Account Securities Intermediary" shall have the
meaning specified in Section 8.2(c).
"Yield Supplement Agreement" means the Yield Supplement Agreement dated
as of the Closing Date between the Depositor, the Servicer and Trustee,
substantially in the form attached hereto as Exhibit F.
"Yield Supplement Amount" shall have the meaning specified in Section
8.1.
"Yield Supplement Initial Deposit" means cash or Permitted Investments
having a value of at least $____.]
Section 1.2 Usage of Terms. With respect to all terms in the Agreement,
the singular includes the plural and the plural the singular; words importing
any gender include the other gender; references to "writing" include printing,
typing, lithography, and other means of reproducing words in a visible form;
references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein effected in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term
"including" and its variations means "including without limitation."
Section 1.3 Simple Interest Method; Allocations. All allocations of
payments to principal and interest and determinations of periodic charges and
the like on the Receivables shall be based on a year with the actual number of
days in such year and twelve months with the actual number of days in each
such month. Each payment on a Receivable shall be applied first to the amount
of interest accrued on such Receivable to the date of receipt, then to reduce
the scheduled principal amount outstanding on the Receivable to the extent of
the remaining scheduled payment and then to any outstanding fees under the
terms of the Receivable. Amounts paid by the Depositor or the Servicer in
respect of Repurchased Receivables shall be allocated first to any interest
accrued on the related Receivable and then to the Principal Balance of the
related Receivable.
Section 1.4 References. All references to the Record Date prior to the
first Record Date in the life of the Trust shall be deemed to be references to
the Cut-off Date. All references to "as of a Record Date" shall refer to the
close of business on such Record Date. All references to the Pool Balance "as
of the first day of a Collection Period" shall refer to the Pool Balance as of
the last day of the preceding Collection Period.
Section 1.5 Section References. All section references shall be to
Sections in this Agreement unless otherwise specified.
ARTICLE II
CREATION OF TRUST
Section 2.1 Creation of Trust. Upon the execution of this Agreement by
the parties hereto, there is hereby created the USAA Auto Loan Grantor Trust
______.
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ARTICLE III
CONVEYANCE OF RECEIVABLES
Section 3.1 Conveyance of Receivables. In consideration of the Trustee's
delivery to, or upon the order of, the Depositor of authenticated
Certificates, in authorized denominations, in an aggregate amount equal to the
Original Pool Balance, the Depositor does hereby sell, transfer, assign, and
otherwise convey to the Trustee on behalf of the Trust, without recourse
(subject to the Depositor's obligations herein):
(i) all right, title, and interest of the Depositor in and to the
Receivables listed in SCHEDULE A hereto, all proceeds thereof and all
monies paid thereon on and after the Cut-off Date (including proceeds of
the repurchase of Receivables by the Depositor pursuant to Section 5.2 or
the purchase of Receivables by the Servicer pursuant to Section 6.6 or
14.2), together with the interest of the Depositor in the security
interests in the Financed Vehicles granted by the Obligors pursuant to
the Receivables;
(ii) all right, title and interest of the Depositor in any
Liquidation Proceeds and in any proceeds of any extended warranties,
comprehensive and collision, credit life, or credit disability policies
relating to the Financed Vehicles or the Obligors; and
(iii) all proceeds of the foregoing items in clauses (i) and (ii).
In connection with such sale, the Depositor agrees to record and file, at
its own expense, financing statements (and continuation statements with
respect to such financing statements when applicable) with respect to the
Receivables for the sale of accounts and chattel paper meeting the
requirements of applicable state law in such manner and in such jurisdictions
as are necessary to perfect the sale and assignment of the Receivables to the
Trust.
It is the intention of the Depositor and the Trustee that the assignment
and transfer herein contemplated constitute a sale of the Receivables,
conveying good title thereto free and clear of any liens and encumbrances,
from the Depositor to the Trust and that the Receivables not be part of the
Depositor's estate in the event of an insolvency. In the event that such
conveyance is deemed to be a pledge to secure a loan, the Depositor hereby
grants to the Trustee on behalf of the Trust for the benefit of the
Certificateholders a first priority perfected security interest in all of the
Depositor's right, title and interest in the items of property listed in
clauses (i), (ii) and (iii) above to secure the loan deemed to be made in
connection with such pledge and, in such event, this Agreement shall
constitute a security agreement under applicable law. In addition, if the sale
of the Receivables from the Seller to the Depositor is deemed to be loan
secured by the Receivables, the Depositor hereby transfers such loan and the
related security interest to the Trustee and grants to the Trustee a security
interest in all of the Depositor's right, title and interest in such loan and
related security interest and this Agreement shall constitute a security
agreement under applicable law.
ARTICLE IV
ACCEPTANCE BY TRUSTEE
Section 4.1 Acceptance by Trustee. The Trustee does hereby accept all
consideration conveyed by the Depositor pursuant to Section 3.1 and declares
that the Trustee
15
shall hold such consideration upon the trusts herein set forth for the benefit
of the Certificateholders, subject to the terms and provisions of this
Agreement.
ARTICLE V
THE RECEIVABLES
Section 5.1 Representations and Warranties of Depositor; Conditions
Relating to Receivables.
(a) The Depositor makes the following representations and warranties as
to the Receivables on which the Trustee shall rely in accepting the
Receivables in trust and authenticating the Certificates. Such representations
and warranties shall speak as of the Cut-off Date unless otherwise specified,
but shall survive the sale, transfer, and assignment of the Receivables to the
Trustee.
(i) Schedule of Receivables. The information set forth in Schedule A
to this Agreement with respect to each Receivable is true and correct in
all material respects, and no selection procedures adverse to the
Certificateholders have been used in selecting the Receivables from all
receivables owned by the Depositor which meet the selection criteria
specified herein and in this Agreement.
(ii) No Sale or Transfer. No Receivable has been sold, transferred,
assigned or pledged by the Depositor to any Person other than the
Trustee.
(iii) Good Title. Immediately prior to the transfer and assignment
of the Receivables to the Trustee herein contemplated, the Depositor had
good and marketable title to each Receivable free and clear of all Liens
and rights of others; and, immediately upon the transfer thereof, the
Trustee, for the benefit of the Certificateholders, has either (i) good
and marketable title to each Receivable, free and clear of all Liens and
rights of others, and the transfer has been perfected under applicable
law or (ii) a first priority perfected security interest in each
Receivable.
(iv) Receivable Files. The Receivable Files shall be kept at one or
more of the locations specified in Schedule B hereto.
(b) Each Receivable satisfies the following conditions as of the Cut-off
Date unless otherwise specified, but such conditions shall survive the sale,
transfer and assignment of the Receivables to the Trustee.
(i) Characteristics of Receivables. Each Receivable (a) has been
originated for the retail financing of a Financed Vehicle by an Obligor
located in one of the States of the United States or the District of
Columbia; (b) contains customary and enforceable provisions such that the
rights and remedies of the holder thereof are adequate for realization
against the collateral of the benefits of the security; and (c) provides
for fully amortizing level scheduled monthly payments (provided that the
payment in the last
16
month in the life of the Receivable may be different from the level
scheduled payment) and for accrual of interest at a fixed rate according
to the simple interest method.
(ii) Compliance with Law. Each Receivable and each sale of the
related Financed Vehicle complied at the time it was originated or made,
and complies on and after the Cut-off Date, in all material respects with
all requirements of applicable federal, state, and local laws, and
regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Federal Trade Commission Act, the Xxxxxxxx-Xxxx
Warranty Act, Federal Reserve Board Regulations B and Z, state
adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and any other consumer credit, equal opportunity, and
disclosure laws applicable to such Receivable and sale.
(iii) Binding Obligation. Each Receivable constitutes the legal,
valid, and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in all material respects in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, liquidation and other similar laws and
equitable principles relating to or affecting the enforcement of
creditors' rights.
(iv) No Government Obligor. No Receivable is due from the United
States of America or any state or from any agency, department,
instrumentality or political subdivision of the United States of America
or any state or local municipality and no Receivable is due from a
business except to the extent that such receivable has a personal
guaranty.
(v) Security Interest in Financed Vehicle. Immediately prior to the
sale and assignment thereof to the Trust as herein contemplated, each
Receivable was secured by a validly perfected first priority security
interest in the Financed Vehicle in favor of the Seller as secured party
or all necessary and appropriate action with respect to such Receivable
had been taken to perfect a first priority security interest in the
related Financed Vehicle in favor of the Seller as secured party, which
security interest is assignable and has been so assigned by the Depositor
to the Trust.
(vi) Receivables in Force. No Receivable has been satisfied,
subordinated, or rescinded, nor has any Financed Vehicle been released
from the Lien granted by the related Receivable in whole or in part.
(vii) No Waiver. No provision of a Receivable has been waived in
such a manner that such Receivable fails either to meet all of the
representations and warranties made by the Depositor herein with respect
thereto or to meet all of the conditions with respect thereto pursuant to
this subsection 5.1(b).
(viii) No Amendments. No Receivable has been amended except pursuant
to either instruments included in the Receivable Files or instruments to
be included in the Receivable Files pursuant to Section 6.2 and no such
amendment has caused such Receivable either to fail to meet all of the
representations and warranties made by the
17
Depositor herein with respect thereto or to fail to meet all of the
conditions with respect thereto pursuant to this subsection 5.1(b).
(ix) No Defenses. As of the Cut-off Date, there are no rights of
rescission, setoff, counterclaim, or defense, and the Depositor has no
knowledge of the same being asserted or threatened, with respect to any
Receivable.
(x) No Liens. As of the Cut-off Date, the Depositor has no knowledge
of any Liens or claims that have been filed, including Liens for work,
labor, materials or unpaid taxes relating to a Financed Vehicle, that
would be Liens prior to, or equal or coordinate with, the Lien granted by
the Receivable.
(xi) No Default. Except for payment defaults continuing for a period
of not more than [30] days as of the Cut-off Date, the Depositor has no
knowledge that a default, breach, violation, or event permitting
acceleration under the terms of any Receivable exists; the Depositor has
no knowledge that a continuing condition that with notice or lapse of
time would constitute a default, breach, violation, or event permitting
acceleration under the terms of any Receivable exists; and the Depositor
has not waived any of the foregoing.
(xii) Insurance. Each Receivable requires that the Obligor
thereunder obtain comprehensive and collision insurance covering the
Financed Vehicle.
(xiii) Lawful Assignment. No Receivable has been originated in, or
is subject to the laws of, any jurisdiction under which the sale,
transfer, and assignment of such Receivable under this Agreement or
pursuant to transfers of the Certificates is unlawful, void or voidable.
(xiv) All Filings Made. No filings (other than UCC filings which
have been made) or other actions are necessary in any jurisdiction to
give the Trustee a first perfected security interest in the Receivables.
(xv) One Original. With respect to any Receivable for which an
original executed copy exists, there is no more than one original
executed copy of such Receivable which, immediately prior to the delivery
thereof to the Servicer, as custodian for the Trustee, was in the
possession of the Servicer.
(xvi) Security. Each Receivable is secured by a new or used
automobile or light-duty truck.
(xvii) Maturity of Receivables. Each Receivable has a remaining
maturity, as of the Cut-off Date, of not less than 6 months nor greater
than 72 months and (i) with respect to Receivables secured by new
Financed Vehicles, an original maturity of at least [12] months and not
more than [72] months and (ii) with respect to Receivables secured by
used Financed Vehicles, an original maturity of at least ___ months and
not more than ___ months.
18
(xviii) Annual Percentage Rate. Each Receivable is a
[fully-amortizing fixed rate simple interest contract that provides for
level scheduled monthly payments (except for the last payment, which may
be minimally different from the level payments) over its respective
remaining term, and has an Annual Percentage Rate that equals or exceeds
_____%, is not secured by any interest in real estate, and has not been
identified on the computer files of the Seller as relating to Obligors
who have requested a reduction in the periodic finance charges, as of the
Cut-off Date, by application of the Soldiers' and Sailors' Civil Relief
Act of 1940, as amended].
(xix) No Repossessions. Each Receivable is secured by a Financed
Vehicle that, as of the Cut-off Date, has not been repossessed without
reinstatement of such Receivable.
(xx) Obligor Not Subject to Bankruptcy Proceedings. Each Receivable
has been entered into by an Obligor who has not been identified on the
computer files of the Depositor as being a debtor in any bankruptcy
proceeding as of the Cut-off Date.
(xxi) Remaining Principal Balance. Each Receivable had a remaining
Principal Balance, as of the Cut-off Date, of at least $_____.
Section 5.2 Repurchase Upon Breach or Failure of a Condition. The
Depositor, the Servicer, or the Trustee, as the case may be, shall inform the
other parties promptly, in writing, upon the discovery by the Depositor, the
Servicer or an Authorized Officer of the Trustee of either any breach of the
Depositor's representations and warranties set forth in subsection 5.1(a) or
the failure of any Receivable to satisfy any of the conditions set forth in
subsection 5.1(b). Unless the breach or failed condition shall have been cured
by the last day of the Collection Period following the Collection Period
during which such discovery occurred (or, at the Depositor's option, the last
day of the Collection Period during which such discovery occurred) (such date,
the "Repurchase Date"), the Depositor shall repurchase any Receivable the
Trust's interest in which was materially and adversely affected by the breach
or failed condition, as determined by the Servicer and reported in an
Officer's Certificate, as of the Repurchase Date; provided that unless the
Depositor has sufficient cash, distributed to it by the Issuer, to make such
repurchase, the Seller shall only be required to repurchase such Receivable if
the Seller concurrently repurchases such Receivable under the Purchase
Agreement. The Seller shall enforce its rights under the Sale and Servicing
Agreement to have the Seller repurchase such Receivable. Subject to the
preceding proviso, in consideration of the repurchase of a Receivable, the
Depositor shall remit the Purchase Amount of such Receivable as of the
Repurchase Date (less any Liquidation Proceeds deposited, or to be deposited,
by the Servicer in the Collection Account with respect to such Receivable
pursuant to Section 6.3) in the manner specified in Section 7.4. The sole
remedy of the Trust, the Trustee or the Certificateholders with respect either
to a breach of the Depositor's representations and warranties set forth in
subsection 5.1(a) or to a failure of any of the conditions set forth in
subsection 5.1(b) shall be to require the Depositor to repurchase Receivables
pursuant to, and subject to the terms of, this Section 5.2. The obligation of
the Depositor to repurchase under this Section 5.2 shall not be solely
dependent upon the actual knowledge of the Depositor of any breached
representation or
19
warranty. The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase
of any Receivable pursuant to this Section 5.2 or the eligibility of any
Receivable for purposes of this Agreement.
Section 5.3 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Trustee,
upon the execution and delivery of this Agreement, agrees to have the Servicer
act as custodian of the following documents or instruments which are hereby
constructively delivered to the Trustee with respect to each Receivable:
(i) The original executed Receivable or, if no such original exists,
a copy of the original executed Receivable;
(ii) To the extent that a credit application with respect to an
Obligor exists, the original executed copy of such credit application or,
if no such original exists, a copy of such original executed copy, fully
executed by the Obligor;
(iii) The notice of recorded Lien or such documents that the
Servicer or the Depositor shall keep on file, in accordance with its
customary procedures, evidencing the first priority perfected security
interest of the Seller in the Financed Vehicle; and
(iv) Any and all other documents that the Depositor or Servicer, as
the case may be, shall keep on file, in accordance with its customary
procedures, relating to a Receivable, an Obligor (to the extent relating
to a Receivable), or a Financed Vehicle.
The Servicer hereby agrees to act as custodian of the Receivable Files,
as agent for the Trustee, hereunder. The Servicer acknowledges that it holds
the documents and instruments relating to the Receivables for the benefit of
the Trustee and the Certificateholders. The Trustee shall have no
responsibility to monitor the Servicer's performance as custodian and shall
have no liability in connection with the Servicer's performance of such duties
hereunder.
Section 5.4 Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian, shall hold
the Receivable Files on behalf of the Trustee for the use and benefit of all
present and future Certificateholders, and maintain such accurate and complete
accounts, records, and computer systems pertaining to the Receivables as shall
enable the Trustee to comply with its obligations pursuant to these Standard
Terms and Conditions of Agreement. In performing its duties as custodian, the
Servicer shall act with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to the receivable files of
comparable new or used automobile and light-duty truck receivables that the
Servicer services for itself or others. The Servicer shall conduct, or cause
to be conducted, periodic audits of the files of all receivables owned or
serviced by the Servicer which shall include the Receivable Files held by it
under this Agreement and the related accounts, records, and computer systems,
in such a manner as shall enable the Trustee to identify all Receivable Files
and such related accounts, records and computer systems and to verify, if the
Trustee so elects, the accuracy of the Servicer's record-keeping. The Servicer
shall promptly
20
report to the Trustee any failure on its part to hold the Receivable Files and
maintain its accounts, records, and computer systems as herein provided, and
promptly take appropriate action to remedy any such failure.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B to this
Agreement, or at such other office as shall be specified to the Trustee by 30
days' prior written notice. The Servicer shall make available to the Trustee
or its duly authorized representatives, attorneys, or auditors the Receivable
Files and the related accounts, records, and computer systems maintained by
the Servicer at such times during normal operating hours as the Trustee shall
reasonably instruct which does not unreasonably interfere with the Servicer's
normal operations.
(c) Release of Documents. Upon instruction from the Trustee, the
Servicer, at its expense, shall release any document in the Receivable Files
to the Trustee, the Trustee's agent, or the Trustee's designee, as the case
may be, at such place or places as the Trustee may reasonably designate as
soon as reasonably practicable to the extent it does not unreasonably
interfere with the Servicer's normal operations. The Servicer shall not be
responsible for any loss occasioned by the failure of the Trustee, its agent
or its designee to return any document or any delay in doing so.
Section 5.5 Instructions; Authority to Act. The Servicer shall be deemed
to have received proper instructions with respect to the Receivable Files upon
its receipt of written instructions signed by an Authorized Officer. A
certified copy of a by-law or of a resolution of the Board of Directors of the
Trustee 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 the Servicer of written notice to the contrary given by the
Trustee.
Section 5.6 Custodian's Indemnification. The Servicer, as custodian,
shall indemnify the Trustee, its officers, directors, employees and agents for
any and all liabilities, obligations, losses, damages, payments, costs, or
expenses of any kind whatsoever that may be imposed on, incurred, or asserted
against the Trustee, its officers, directors, employees or agents as the
result of any improper act or omission in any way relating to the maintenance
and custody by the Servicer, as custodian, of the Receivable Files; provided,
however, that the Servicer shall not be liable for any portion of any such
amount resulting from the willful misfeasance, bad faith, or negligence of the
Trustee or any loss occasioned by the failure of the Trustee, its agent or
designee to return any document to the Servicer or any delay in doing so.
Section 5.7 Effective Period and Termination. The Servicer's appointment
as custodian shall become effective as of the Cut-off Date and shall continue
in full force and effect until terminated pursuant to this Section 5.7 or
until this Agreement shall be terminated. If the Servicer shall resign as
Servicer under Section 11.5 or if all of the rights and obligations of the
Servicer shall have been terminated under Section 12.1, the appointment of the
Servicer as custodian may be terminated by the Trustee or by the Holders of
Certificates evidencing not less than 25% of the Pool Balance, in the same
manner as the Trustee or such Holders may terminate the rights and obligations
of the Servicer under Section 12.1. As soon as practicable after any
termination of such appointment, the Servicer shall, at its expense, deliver
the Receivable Files
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to the Trustee or the Trustee's agent at such place or places as the Trustee
may reasonably designate. Notwithstanding the termination of the Servicer as
custodian, the Trustee agrees that upon any such termination, the Trustee
shall provide, or cause its agent to provide, access to the Receivable Files
to the Servicer for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables hereunder.
ARTICLE VI
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 6.1 Duties of Servicer. The Servicer shall manage, service,
administer and make collections on the Receivables (other than Repurchased
Receivables) with reasonable care, using that degree of skill and attention
that the Servicer exercises with respect to comparable new or used automobile
and light-duty truck receivables that it services for itself. The Servicer's
duties shall include collection and posting of all payments, responding to
inquiries by Obligors or by federal, state, or local governmental authorities
with respect to the Receivables, investigating delinquencies, reporting tax
information to Obligors in accordance with its customary practices, accounting
for collections, furnishing monthly and annual statements to the Trustee with
respect to distributions, and, if it elects to do so, making Advances pursuant
to Section 7.3. The Servicer shall follow its customary standards, policies,
and procedures in performing its duties as Servicer. Without limiting the
generality of the foregoing, the Servicer shall be authorized and empowered by
the Trustee to execute and deliver, on behalf of itself, the Trust, the
Trustee, the Certificateholders, or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, without recourse to the Trustee, with
respect to the Receivables or with respect to the Financed Vehicles. If the
Servicer shall commence a legal proceeding to enforce a Receivable or a
Defaulted Receivable, the Trustee shall thereupon be deemed to have
automatically assigned such Receivable and the related property conveyed to
the Trust pursuant to Section 3.1 with respect to such Receivable to the
Servicer, solely for the purpose of collection. The Trustee shall furnish the
Servicer with such documents as have been prepared by the Servicer for
execution by the Trustee and as are necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
Section 6.2 Collection of Receivable Payments. The Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables and of this Agreement as and when the same shall
become due, and shall follow such collection procedures as it follows with
respect to comparable new or used automobile and light-duty truck receivables
that it services for itself. The Servicer shall not change the amount of or
reschedule the due date of any scheduled payment to a date more than 30 days
from the original due date of such scheduled payment, change the annual
percentage rate of, or extend any Receivable or change any material term of a
Receivable, except as provided by the terms of the Receivable or of this
Agreement or as required by law or court order, provided, however, that the
Servicer may extend any Receivable that is in default or with respect to which
default is reasonably foreseeable and that would be acceptable to the Servicer
with respect to comparable new or used automobile and light-duty truck
receivables that it services for itself, if (a) the
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amount on deposit in the Reserve Account is greater than zero at the time of
the extension, (b) the total credit-related extensions granted on the
Receivable will not exceed four months in the aggregate, (c) the total number
of credit-related extensions granted on the Receivable will not exceed two,
(d) the maturity of such Receivable would not be extended beyond the
Collection Period immediately preceding the Final Payment Date and (e) the
rescheduling or extension would not modify the terms of such Receivable in
such a manner as to constitute a cancellation of such Receivable and the
creation of a new receivable. If, as a result of inadvertently rescheduling or
extending of payments, such rescheduling or extension breaches any of the
terms of the proviso to the preceding sentence, then the Servicer shall be
obligated to purchase such Receivable pursuant to Section 6.6. For the purpose
of such purchases pursuant to Section 6.6, notice shall be deemed to have been
received by the Servicer at such time as shall make purchase mandatory as of
the last day of the Collection Period during which the discovery of such
breach occurred.
Section 6.3 Realization Upon Receivables. On behalf of the Trust, the
Servicer shall use reasonable efforts, consistent with its customary servicing
procedures, to repossess or otherwise take possession of the Financed Vehicle
securing any Receivable which the Servicer shall have determined to be a
Defaulted Receivable or otherwise (and shall specify any such Defaulted
Receivable to the Trustee no later than the Determination Date following the
Collection Period in which the Servicer shall have made such determination).
The Servicer shall follow such customary and usual practices and procedures as
it shall deem necessary or advisable in its servicing of new or used
automobile and light-duty truck receivables, which may include selling the
Financed Vehicle at public or private sale. The Servicer shall be entitled to
recover from proceeds all reasonable expenses incurred by it in the course of
converting the Financed Vehicle into cash proceeds. The Liquidation Proceeds
(net of such expenses) realized in connection with any such action with
respect to a Receivable shall be deposited by the Servicer in the Collection
Account in the manner specified in Section 7.2 and shall be applied to reduce
(or to satisfy, as the case may be) the Purchase Amount of the Receivable, if
such Receivable is to be repurchased by the Depositor pursuant to Section 5.2,
or is to be purchased by the Servicer pursuant to Section 6.6. The foregoing
shall be subject to the provision that, in any case in which the Financed
Vehicle shall have suffered damage, the Servicer shall not expend funds in
connection with the repair or the repossession of such Financed Vehicle unless
it shall determine in its sole 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.
Section 6.4 Maintenance of Security Interests in Financed Vehicles. The
Servicer, in accordance with its customary servicing procedures, shall take
such steps as are necessary to maintain (i) perfection of the security
interest created in any Financed Vehicle which secures a Receivable and (ii)
perfection of the Trust's interest in the Receivables including, without
limitation, the filing of financing statements and continuation statements. On
behalf of the Trust, the Servicer hereby agrees to take such steps as are
necessary to re-perfect such security interest in the event of the relocation
of a Financed Vehicle or for any other reason, in either case, when the
Servicer has knowledge of the need for such re-perfection. In the event that
the assignment of a Receivable to the Trust is insufficient, without a
notation on the related Financed Vehicle's certificate of title, or without
fulfilling any additional administrative requirements under the laws
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of the state in which the Financed Vehicle is located, to grant to the Trust a
perfected security interest in the related Financed Vehicle, the Servicer
hereby agrees that the Servicer's listing as the secured party on the
certificate of title is deemed to be in its capacity as agent of the Trust and
further agrees to hold such certificate of title as the Trustee's agent and
custodian; provided that the Servicer shall not, nor shall the Trustee or
Certificateholders have the right to require that the Servicer, make any such
notation on the related Financed Vehicles' certificate of title or fulfill any
such additional administrative requirement of the laws of the state in which a
Financed Vehicle is located.
Section 6.5 Covenants of Servicer. The Servicer hereby makes the
following covenants on which the Trustee shall rely in accepting the
Receivables in trust and authenticating the Certificates:
(i) Security Interest to Remain in Force. The Financed Vehicle
securing each Receivable shall not be released from the security interest
granted by the Receivable in whole or in part except as contemplated
herein;
(ii) No Impairment. The Servicer shall not impair the rights of the
Trust in the Receivables; and
(iii) Extensions, Defaulted Receivables. The Servicer shall not
increase the number of payments under a Receivable, nor increase the
Amount Financed under a Receivable, nor extend or forgive payments on a
Receivable, except as provided in Section 6.2. In the event that at the
end of the scheduled term of any Receivable, the outstanding principal
amount thereof is such that the final payment to be made by the related
Obligor is larger than the regularly scheduled payment of principal and
interest made by such Obligor, the Servicer may permit such Obligor to
pay such remaining principal amount in more than one payment of principal
and interest, provided that the last such payment shall be due on or
prior to the Collection Period immediately preceding the Final Payment
Date.
Section 6.6 Purchase of Receivables Upon Breach. The Servicer or the
Trustee, as the case may be, shall inform the other party promptly, in
writing, upon the discovery by the Servicer or an Authorized Officer of the
Trustee, as the case may be, of any breach by the Servicer of its covenants
under Section 6.5. Except as otherwise specified in Section 6.2, unless the
breach shall have been cured by the last day of the Collection Period
following the Collection Period during which such breach was discovered (or,
at the Servicer's election, the last day of the Collection Period during which
such breach was discovered), the Servicer shall purchase any Receivable
materially and adversely affected by such breach, as determined by the
Servicer and reported in an Officer's Certificate as of such date. For this
purpose, any breach of the covenant set forth in Section 6.5(iii) shall be
deemed to materially and adversely affect the interest of the Trust in a
Receivable. In consideration of the purchase of such Receivable, the Servicer
shall remit the Purchase Amount (less any Liquidation Proceeds deposited, or
to be deposited, by the Servicer in the Collection Account with respect to
such Receivable pursuant to Section 6.3) in the manner specified in Section
7.4. The sole remedy of the Trust, the Trustee, or the Certificateholders
against the Servicer with respect to a breach of its covenants in Section 6.5
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shall be to require the Servicer to purchase Receivables pursuant to this
Section 6.6. The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase
of any Receivable pursuant to this Section 6.6 or the eligibility of any
Receivable for purposes of this Agreement.
Section 6.7 Servicing Fee. The Servicing Fee for a Collection Period
shall equal the product of one-twelfth of the Servicing Fee Rate and the Pool
Balance as of the first day of such Collection Period. In addition, the
Servicer shall be entitled to receive as additional servicing compensation
investment earnings on amounts on deposit in the Collection Account or earned
on collections pending deposit in the Collection Account[; provided, however,
that, beginning with the Collection Period for which the Trustee is notified
in writing that the Servicer has failed to deposit an Advance with respect to
a Receivable other than because such Receivable has been designated a
Defaulted Receivable and continuing until the Final Payment Date, such
investment earnings shall not be paid to the Servicer, but shall be treated as
Available Interest]. The Servicer shall be required to pay from its own
account all expenses incurred by it in connection with its activities
hereunder (including fees and disbursements of the Trustee, Trustee's counsel,
the Paying Agent, the Transfer Agent and Certificate Registrar and independent
accountants, taxes imposed on the Servicer, and expenses incurred in
connection with distributions and reports to Certificateholders) except
expenses in connection with realizing upon a Receivable under Section 6.3
which may be paid from Liquidation Proceeds from such Receivable.
Section 6.8 Servicer's Certificate. On or before each Determination Date,
the Servicer shall deliver to the Trustee, the Paying Agent, the Rating
Agencies, a Servicer's Certificate substantially in the form of Exhibit D
hereto, for the Collection Period preceding such Determination Date,
containing all information necessary to make the distributions pursuant to
Section 7.5 and all information necessary for the Paying Agent to send
statements to Certificateholders pursuant to Section 7.8. The Servicer shall
deliver to the Rating Agencies any information, to the extent it is available
to the Servicer, that the Rating Agencies reasonably request in order to
monitor the Trust. The Servicer shall also specify each Receivable which the
Depositor or the Servicer is required to repurchase or purchase, as the case
may be, as of the last day of the preceding Collection Period, each Receivable
which the Servicer shall have determined to be a Defaulted Receivable during
the preceding Collection Period, and each Receivable for which the Servicer
has failed to deposit an Advance pursuant to Section 7.3 other than because
such Receivable has been designated a Defaulted Receivable. Subsequent to the
Closing Date, the form of Servicer's Certificate may be revised or modified to
cure any ambiguities or inconsistencies with this Agreement; provided,
however, that no material information shall be deleted from the form of
Servicer's Certificate. In the event that the form of Servicer's Certificate
is revised or modified in accordance with the preceding sentence, a form
thereof, as so revised or modified, shall be provided to the Trustee and each
Rating Agency.
Section 6.9 Annual Statement as to Compliance. (a) The Servicer shall
deliver to the Trustee and the Rating Agencies, and on or before March 31 of
each year commencing March 31, _____, a certificate signed by the chairman of
the board, president, the treasurer, the controller, any executive or senior
vice president or any vice president of the Servicer, stating
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that (a) a review of the activities of the Servicer during the year ended the
preceding December 31 (or shorter period in the case of the first such
certificate) and of its performance under this Agreement has been made under
such officer's supervision and (b) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations in all
material respects under this Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Trustee and each Rating Agency,
promptly after having obtained knowledge thereof, but in no event later than
five Business Days thereafter, an Officer's Certificate specifying any event
which with the giving of notice or lapse of time, or both, would become an
Event of Servicing Termination under Section 12.1. The Depositor shall deliver
to the Trustee, promptly after having obtained knowledge thereof, but in no
event later than five Business Days thereafter, an Officer's Certificate
specifying any event which with the giving of notice or lapse of time, or
both, would become an Event of Servicing Termination under Section 12.1.
Section 6.10 Annual Audit Report. The Servicer shall cause a firm of
independent public accountants (which may provide other services to the
Servicer or the Depositor) to prepare a report addressed to the Board of
Directors of the Servicer, for the information and use of the Trustee, and the
Rating Agencies on or before March 31 of each year, beginning March 31, _____,
to the effect that such firm has examined the automobile and light-duty truck
receivable servicing functions of the Servicer, including the Servicer's
procedures and records relating to servicing of the Receivables under this
Agreement and that, on the basis of such examination, such firm is of the
opinion that such servicing has been conducted in compliance with this
Agreement except for (a) such exceptions as such firm believes to be
immaterial and (b) such other exceptions as shall be set forth in such firm's
report. In addition, such report shall state that such firm has compared the
mathematical calculations of each amount set forth in the monthly certificates
forwarded by the Servicer pursuant to Section 6.8 during the period covered by
such report (which shall be the preceding calendar year) with the Servicer's
computer reports which were the source of such amounts and that on the basis
of such comparison, such firm is of the opinion that such amounts are in
agreement, except for such exceptions as such firm believes to be immaterial
and such other exceptions as shall be set forth in such statement. In
addition, such report shall set forth the procedures performed in conjunction
with the examination and shall contain an opinion of such firm as to the
accuracy of the amounts set forth in the certificates delivered pursuant to
Section 6.8 in such period.
The report of the independent certified public accountants shall also
indicate that such accounting firm is independent of the Servicer within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
Section 6.11 Reports to Certificateholders and the Rating Agencies. (a)
The Trustee shall provide to any Certificateholder who so requests in writing
(addressed to the Corporate Trust Office) a copy of any Servicer's Certificate
described in Section 6.8, the annual audit statement described in Section 6.9,
or the annual audit report described in Section 6.10. The
26
Trustee may require the Certificateholder to pay a reasonable sum to cover the
cost of the Trustee's complying with such request.
(b) The Trustee shall forward to the Rating Agencies the statement to
Certificateholders described in Section 7.8 and any other reports it may
receive pursuant to this Agreement to (i) Standard & Poor's Ratings Group,
Asset-Backed Surveillance Group, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
and (ii) Xxxxx'x Investors Service, Inc., ABS Monitoring Dept., 00 Xxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Section 6.12 Insurance. The Servicer, in accordance with its customary
servicing procedures and underwriting standards, shall require that each
Obligor shall have obtained and shall maintain comprehensive and collision
insurance covering the Financed Vehicle as of the execution of the Receivable.
The Servicer shall enforce its rights under the Receivables to require the
Obligors to maintain comprehensive and collision insurance, in accordance with
the Servicer's customary practices and procedures with respect to comparable
new or used automobile and light-duty truck receivables that it services for
itself or others.
ARTICLE VII
Distributions; Statements to Certificateholders
Section 7.1 Accounts. (a) The Servicer shall establish the (i) Collection
Account in the name of the Trustee for the benefit of the Certificateholders,
(ii) the Class A Distribution Account in the name of the Trustee for the
benefit of the Class A Certificateholders and (iii) the Class B Distribution
Account in the name of the Trustee for the benefit of the Class B
Certificateholders. Each such account shall be either:
(x) a segregated identifiable trust account established in the trust
department of a Qualified Trust Institution; or
(y) a separately identifiable deposit account established in the deposit
taking department of a Qualified Institution, which may be the Seller so long
as the Seller is a Qualified Institution.
The Collection Account shall satisfy the requirements of clause (x)
above. The Depositor hereby grants to the Collateral Agent for the benefit of
the Class A Certificateholders a security interest in the Class A Distribution
Account, likewise, the Depositor hereby grants to the Collateral Agent for the
benefit of the Class B Certificateholders a security interest in the Class B
Distribution Account. Should any depositary of the Collection Account, the
Class A Distribution Account or the Class B Distribution Account cease to be,
as applicable, a Qualified Institution or a Qualified Trust Institution, then
the Servicer shall, with the Depositor's assistance as necessary, cause such
account to be moved, upon thirty (30) days notice to the Trustee, to a
Qualified Institution or a Qualified Trust Institution, unless the Servicer
provides the Trustee with a letter from the Rating Agencies to the effect that
the current ratings assigned to the Certificates by the Rating Agencies will
not be adversely affected by such depositary's ceasing to be a Qualified
Institution or a Qualified Trust Institution, as the case may be.
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All amounts held in the Collection Account shall be invested by the bank
or trust company then maintaining the account at the written direction of the
Servicer in Permitted Investments that mature on a date not later than the
Deposit Date next succeeding the date of investment; provided, that if the
Collection Account is maintained with the Trustee, such Permitted Investments
may mature on the Payment Date next succeeding the date of investment, if the
Trustee is the obligor on such investments (including repurchase agreements on
which the Trustee in its commercial capacity is liable as principal).
(b) The Depositor shall establish the Reserve Account in the name of the
Collateral Agent for the benefit of the Certificateholders. Subject to Section
7.5(b), the Reserve Account shall be under the sole dominion and control of
the Collateral Agent. The Reserve Account shall be a segregated identifiable
trust account established in the trust department of a Qualified Trust
Institution.
Should any depositary of the Reserve Account cease to be a Qualified
Trust Institution, then the Collateral Agent shall, upon thirty (30) days
notice to the Trustee, with the Depositor's assistance as necessary, cause
such account to be moved to a Qualified Trust Institution, unless the
Depositor provides the Trustee and the Collateral Agent with a letter from the
Rating Agencies to the effect that the current ratings assigned to the
Certificates by the Rating Agencies will not be adversely affected by such
depositary's ceasing to be a Qualified Trust Institution. The Reserve Account
shall not be property of the Trust.
Funds on deposit in the Reserve Account shall be invested by the
Collateral Agent in Permitted Investments selected in writing by the Servicer;
provided, however, it is understood and agreed that the Collateral Agent shall
not be liable for any loss or charge arising from such investment in Permitted
Investments. All such Permitted Investments shall be held by the Collateral
Agent for the benefit of the Certificateholders in the manner specified in
subsection (c) below; provided, however, that on each Payment Date all
interest and other investment income (net of losses and investment expenses)
on funds on deposit therein shall be withdrawn from the Reserve Account at the
written direction of the Servicer and paid to the Depositor. Funds on deposit
in the Reserve Account shall be invested in Permitted Investments that will
mature so that all funds (including both principal and interest) will be
available at the opening of business on the next following Deposit Date;
provided, however, that subject to satisfaction of the Rating Agency Condition
and notice thereof to the Trustee and the Collateral Agent, all or a portion
of such funds on deposit in the Reserve Account may be invested in Permitted
Investments that mature later than such next following Deposit Date.
(c) Each Permitted Investment made with funds from the Reserve Account
shall be delivered to the Collateral Agent by causing the financial
institution then maintaining the Reserve Account (such institution being
referred to as the "Reserve Account Securities Intermediary") to create a
Security Entitlement in the Reserve Account in favor of the Trustee with
respect to such Permitted Investment by indicating by book-entry that such
Permitted Investment has been credited to the Reserve Account. The Servicer
shall only invest in Permitted Investments which the Reserve Account
Securities Intermediary agrees to credit to the Reserve Account.
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(d) The Servicer shall have the power, revocable by the Collateral Agent,
to instruct the Collateral Agent to make withdrawals and payments from the
Reserve Account for the purpose of permitting the Servicer to carry out its
duties hereunder.
(e) Each of the Depositor and the 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, without limitation, any financing statements under the UCC or this
Agreement) as may be determined to be necessary, in order to perfect the
security interests created by this Section 7.1 and otherwise effectuate the
purposes, terms and conditions of this Section 7.1.
(f) Notwithstanding anything else contained herein, the Reserve Account
shall only be established at Qualified Trust Institution which agrees that it
will (i) comply with Entitlement Orders (i.e., orders directing the transfer
or redemption of any financial assets credited to the Reserve Account)
relating to the Reserve Account issued by the Collateral Agent without further
consent by the Depositor; (ii) credit all Permitted Investments to the Reserve
Account; (iii) treat each item of property (including, without limitation,
investment property, securities, instruments and cash) credited to the Reserve
Account as a Financial Asset; (iv) not enter into any agreement with any other
person relating to the Reserve Account pursuant to which agreement it has
agreed to comply with Entitlement Orders made by such person; (v) not accept
for credit to the Reserve Account any Permitted Investment which is registered
in the name of, or payable to the order of, or specially indorsed to, any
person other than such Qualified Trust Institution unless it has been indorsed
to such Qualified Trust Institution or is indorsed in blank and (vi) such
Qualified Trust Institution has agreed that it will waive any right of set-off
unrelated to its fees for such Account.
Section 7.2 Collections. The Servicer shall remit daily within two
Business Days of receipt to the Collection Account all payments by or on
behalf of the Obligors on the Receivables and all Liquidation Proceeds (net of
expenses), both as collected during the Collection Period. Notwithstanding the
provisions of the first sentence of this Section 7.2, so long as the Servicer
is USAA Federal Savings Bank, the Servicer shall be permitted to make deposits
on a monthly instead of a daily basis if either (a) the Servicer obtains a
short-term certificate of deposit rating of the Servicer from Standard &
Poor's and Moody's of at least A-1+ and P-1, respectively, or (b) the Servicer
provides the Trustee with (1) a letter from each Rating Agency to the effect
that the current ratings assigned to the Certificates by the Rating Agency
will not be adversely affected by the remittance of Collections on a monthly,
rather than a daily, basis. Any such collections remitted to the Collection
Account on a monthly basis shall be in immediately available funds and shall
be remitted no later than 11:00 a.m., New York City time on or before the
Deposit Date. For purposes of this Section 7.2 the phrase "payments made on
behalf of the Obligors" shall mean payments made by Persons other than the
Depositor or the Servicer.
Section 7.3 Advances.
(a) As of each Deposit Date, the Servicer shall make a payment with
respect to each Receivable (other than a Defaulted Receivable) equal to the
excess, if any, of (x) the product of the Principal Balance of such Receivable
as of the first day of the related Collection Period and
29
one-twelfth of the Annual Percentage Rate of interest on such Receivable
(calculated on the basis of a 360-day year of twelve 30-day months), over (y)
the interest actually received by the Servicer with respect to such Receivable
from the Obligor or from payment of the Purchase Amount during or with respect
to such Collection Period. The Servicer shall deposit all such Advances into
the Collection Account in immediately available funds no later than, 11:00
a.m. New York City time, on the Deposit Date. Notwithstanding the foregoing,
the Servicer may elect not to make any Advance with respect to a Receivable to
the extent that the Servicer, in its sole discretion, shall determine that
such Advance is not recoverable from subsequent payments on such Receivable or
from withdrawals from the Reserve Account. To the extent that the amount set
forth in clause (y) above with respect to a Receivable is greater than the
amount set forth in clause (x) above with respect thereto, such excess amount
shall be distributed to the Servicer pursuant to Section 7.5(b); [provided,
however, that the Servicer shall not be entitled to reimbursement for an
Advance resulting from a payment being made by or on behalf of the Obligor
prior to the Due Date under the Receivable (a "Simple Interest Advance")]. In
addition, in the event that a Receivable becomes a Defaulted Receivable,
Outstanding Advances in respect of that Receivable shall be reimbursed to the
extent of Interest Collections with respect to such Receivable and, if such
amounts are insufficient, from amounts on deposit in the Reserve Account, and
if such amounts are not sufficient, from amounts on deposit in the Collection
Account. The Servicer shall not make any advance with respect to principal of
Receivables.
(b) The Servicer shall deposit in the Collection Account the aggregate
Advances on the Receivables pursuant to Section 7.3(a). To the extent that the
Servicer fails to make an Advance pursuant to Section 7.3(a) on the date
required, the Servicer shall so notify the Trustee in writing specifying the
amount of the Advance and the Receivable to which such Advance relates, and
the Trustee shall withdraw such amount (or, if determinable, such portion of
such amount as does not represent advances for delinquent interest) from the
Reserve Account and deposit such amount in the Collection Account. [The
Trustee shall deposit in the Collection Account the aggregate of any amounts
received pursuant to the Yield Supplement Agreement on the date of receipt
thereof.]
Section 7.4 Additional Deposits. The Servicer, or the Depositor, as the
case may be, shall deposit into the Collection Account the aggregate Purchase
Amount pursuant to Sections 5.2, 6.6 and 14.2, as applicable. All remittances
shall be made to the Collection Account, in immediately available funds, no
later than 11:00 a.m., on the Deposit Date.
Section 7.5 Distributions.
(a) On or before each Determination Date, the Servicer shall calculate
all amounts to be deposited in the Class A Distribution Account and the Class
B Distribution Account, which calculations shall be set forth in the
Servicer's Certificate delivered to the Trustee on or before such
Determination Date.
(b) On each Payment Date, after making the reimbursements to the Servicer
from amounts on deposit in the Collection Account of Outstanding Advances
pursuant to Section 7.3, the Trustee shall withdraw from the Collection
Account, the Available Interest and Available Principal for such Payment Date,
withdraw from the Reserve Account such amounts as may be
30
required to satisfy amounts requested by the Servicer for such Payment Date,
make the following deposits and distributions, if necessary, based solely on
the information contained in the Servicer's Certificate, to the extent of
amounts available from the indicated sources, in the following priority:
(i) to the Servicer, first from Available Interest, and then, if
necessary, from the Available Reserve Amount, any unpaid Servicing Fee
owing to such Servicer for the related Collection Period and all unpaid
Servicing Fees from prior Collection Periods less any amounts owing to
the Trustee pursuant to Section 13.7 hereof, which shall be paid to the
Trustee;
(ii) to the Class A Distribution Account, first from Available
Interest, then, if necessary, from the Available Reserve Amount, and
finally, if necessary, from the Class B Percentage of Available
Principal, the Class A Interest Distribution for such Payment Date; and
(iii) to the Class B Distribution Account, first from Available
Interest, and then, if necessary, from the Available Reserve Amount, the
Class B Interest Distribution for such Payment Date.
(c) On each Payment Date, the Trustee shall make the following deposits
and distributions (based on the information contained in the Servicer's
Certificate), to the extent of the portion of Available Principal, Available
Interest and the Available Reserve Amount (to be applied in that order of
priority) remaining after the application of clauses (i), (ii) and (iii)
above, in the following priority:
(i) to the Class A Distribution Account, the Class A Principal
Distribution for such Payment Date;
(ii) to the Class B Distribution Account, the Class B Principal
Distribution for such Payment Date;
(iii) to the Collateral Agent for deposit in the Reserve Account, any
amounts remaining, until the amount on deposit in the Reserve Account
equals the Specified Reserve Account Balance; and
(iv) to the Depositor, any amount remaining less any accrued and
unpaid Trustee fees and expenses which shall be paid to the Trustee;
(d) On each Payment Date, all amounts on deposit in the Class A
Distribution Account will be distributed pro rata to the Class A
Certificateholders by the Trustee and all amounts on deposit in the Class B
Distribution Account will be distributed pro rata to the Class B
Certificateholders by the Trustee. Except as provided in Section 14.1,
payments under this paragraph shall be made to the Certificateholders by check
mailed by the Trustee to each Holder's respective address of record (or, in
the case of Certificates registered in the name of a Clearing Agency, or its
nominee, by wire transfer of immediately available funds). To the extent
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that the Trustee is required to wire funds to the Certificateholders from the
Class A Distribution Account or the Class B Distribution Account, as
applicable, it shall request the bank maintaining the Class A Distribution
Account or the Class B Distribution Account, as applicable, to make a wire
transfer of the amount to be distributed and to confirm such wire transfer.
Section 7.6 Reserve Account. On the Closing Date, the Depositor shall
deposit the Reserve Account Initial Deposit into the Reserve Account. The
Depositor hereby grants to the Collateral Agent for the benefit of the
Certificateholders a security interest in and to the Reserve Account, any and
all Financial Assets or other property credited thereto from time to time,
including Permitted Investments, and the related Security Entitlements to
secure payment of the Certificates according to their terms. Amounts held from
time to time in the Reserve Account will continue to be held by the Collateral
Agent for the benefit of Class A Certificateholders and the Class B
Certificateholders, but the Reserve Account shall not be an asset of the
Trust. By acceptance of their Certificates or interest therein,
Certificateholders and Certificate Owners shall be deemed to have appointed
_________________, as Collateral Agent. _________________ hereby accepts such
appointment as Collateral Agent. The Collateral Agent accepts such appointment
and agrees to establish the Reserve Account at the Corporate Trust Office and
to comply with Section 7.1(f).
Section 7.7 Net Deposits. USAA Federal Savings Bank (in whatever
capacity) may make the remittances pursuant to Section 7.2 and Section 7.4
above, net of amounts to be retained by it or distributed to it (also in
whatever capacity) pursuant to Section 7.5, if (a) it shall be the Servicer
and (b) it is entitled, pursuant to Section 7.2, to make deposits on a monthly
basis, rather than a daily basis. The Servicer may remit amounts to the
Collection Account net of investment earnings accrued on such amounts pending
deposit into the Collection Account, whether or not the Servicer is then
entitled to make deposits on a monthly basis. Nonetheless, the Servicer shall
account for all of the above described amounts as if such amounts were
deposited and distributed separately.
Section 7.8 Statements to Certificateholders. On each Payment Date, the
Servicer shall prepare and furnish to the Trustee and the Paying Agent, and
the Paying Agent shall include with the distribution to each
Certificateholder, a statement substantially in the form of Exhibit E, based
on information in the certificate furnished pursuant to Section 6.8, setting
forth for the related Collection Period the following information:
(i) the amount of the distribution allocable to principal on the
Class A Certificates and the Class B Certificates;
(ii) the amount of the distribution allocable to interest on the
Class A Certificates and the Class B Certificates;
(iii) the Yield Supplement Amount;
(iv) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
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(v) the Class A Certificate Balance, the Class A Pool Factor, the
Class B Certificate Balance and the Class B Pool Factor as of such
Payment Date, after giving effect to payments allocated to principal
reported pursuant to clause (i) above;
(vi) the Pool Balance as of the close of business of the Servicer on
the last day of the preceding Collection Period;
(vii) the amount of the aggregate Realized Losses, if any, for such
Collection Period;
(viii) the aggregate Purchase Amount of Receivables repurchased by
the Depositor or purchased by the Servicer;
(ix) the balance of the Reserve Account on such Payment Date, after
giving effect to changes therein on such Payment Date; and
(x) the Specified Reserve Account Balance as of the close of
business on such Payment Date.
Each amount set forth pursuant to clauses (i), (ii) and (v) above shall be
expressed in the aggregate and as a dollar amount per $1,000 of original
denomination of a Certificate.
Within a reasonable period of time after the end of each calendar year,
but not later than the latest date permitted by law, the Servicer shall
prepare and furnish to the Trustee and the Paying Agent, and the Paying Agent
shall furnish to each Person who at any time during such calendar year shall
have been a Certificateholder, a statement containing the sum of the amounts
determined in clauses (i) and (ii) for such calendar year, for the purposes of
such Certificateholder's preparation of federal income tax returns.
ARTICLE VIII
[Yield Supplement Agreement
Section 8.1 Yield Supplement Agreement. Simultaneously with the execution
of this Agreement, the Depositor shall convey the Yield Supplement Agreement
to the Trust as part of the Trust Property. The Yield Supplement Agreement,
with respect to each Receivable (other than Repurchased Receivables and
Defaulted Receivables), provides for the payment by the Depositor, to the
extent of the funds available in the Yield Supplement Account, on or prior to
each Deposit Date of an amount (if positive) calculated by the Servicer equal
to one-twelfth of the difference between (i) interest on such Receivable's
Principal Balance as of the first day of the preceding Collection Period
calculated at a rate equal to the sum of the weighted average of the Class A
Pass-Through Rate and the Class B Pass-Through Rate and the Servicing Fee Rate
over (ii) interest accrued on such Receivable's Principal Balance as of the
first day of the preceding Collection Period at its Contract Rate (in the
aggregate for all Receivables with respect to any Payment Date, the "Yield
Supplement Amount").
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Section 8.2 Yield Supplement Account. (a) The Depositor shall establish
and maintain in the name of the Collateral Agent a segregated trust account to
secure the Depositor's obligations under the Yield Supplement Agreement (the
"Yield Supplement Account"). The Yield Supplement Account and any amounts
therein shall not be property of the Trust, but shall be pledged to the
Collateral Agent for the benefit of Certificateholders.
(b) In order to provide for the prompt payment by the Depositor of the
Yield Supplement Amount, to assure availability of the amounts maintained in
the Yield Supplement Account and as security for the performance by the
Depositor of its obligations under the Yield Supplement Agreement, the
Depositor, on behalf of itself and its successors and assigns, hereby pledges
to the Collateral Agent and its successors and assigns for the benefit of the
Certificateholders, all of its right, title and interest in and to the Yield
Supplement Account, and all proceeds of the foregoing, including all other
amounts and investments held from time to time in the Yield Supplement Account
including the Yield Supplement Initial Deposit, subject, however, to the
limitations set forth below, and solely for the purpose of securing payment of
the Yield Supplement Amount (all of the foregoing, subject to the limitations
set forth in this Section, the "Yield Supplement Account Property"), to have
and to hold all the aforesaid property, rights and privileges unto the
Collateral Agent, its successors and assigns, in trust for the uses and
purposes, and subject to the terms and provisions set forth in this Section.
The Collateral Agent hereby acknowledges such transfer and accepts the trust
hereunder and shall hold and distribute the Yield Supplement Account Property
in accordance with the terms and provisions of this Section.
(c) Funds on deposit in the Yield Supplement Account shall be invested by
the Collateral Agent in Permitted Investments selected by the Depositor and
designated in writing by the Depositor to the Collateral Agent; provided,
however, that the Collateral Agent shall not be liable for any loss arising
from such investment in Permitted Investments. Funds on deposit in the Yield
Supplement Account shall be invested in Permitted Investments that will mature
so that all such funds will be available at the opening of business on each
Deposit Date; provided, however, that to the extent permitted by the Rating
Agencies, funds on deposit in the Yield Supplement Account may be invested in
Permitted Investments that mature later than the next Deposit Date. Funds
deposited in the Yield Supplement Account on a Deposit Date upon the maturity
of any Permitted Investments are not required to be (but may be) invested over
night. The Depositor will treat the funds, Permitted Investments and other
assets in the Yield Supplement Account as its own for Federal, state and local
income tax and franchise tax purposes and will report on its tax returns all
income, gain and loss from the Yield Supplement Account.
(d) Each Permitted Investment made with funds from the Yield Supplement
Account shall be delivered to the Collateral Agent by causing the financial
institution then maintaining the Yield Supplement Account (such institution
being referred to as the "Yield Supplement Account Securities Intermediary")
to create a Security Entitlement in the Yield Supplement Account in favor of
the Trustee with respect to such Permitted Investment by indicating by
book-entry that such Permitted Investment has been credited to the Yield
Supplement Account. The Servicer
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shall only invest in Permitted Investments which the Yield Supplement Account
Securities Intermediary agrees to credit to the Yield Supplement Account.
(e) Each of the Depositor and the 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, without limitation, any financing statements under the UCC or this
Agreement) as may be determined to be necessary, in order to perfect the
security interests created by this Section 8.2 and otherwise effectuate the
purposes, terms and conditions of this Section 8.2.
(f) Notwithstanding anything else contained herein, the Yield Supplement
Account shall only be established at Qualified Trust Institution which agrees
that it will (i) comply with Entitlement Orders (i.e., orders directing the
transfer or redemption of any financial assets credited to the Yield
Supplement Account) relating to the Yield Supplement Account issued by the
Collateral Agent without further consent by the Depositor; (ii) credit all
Permitted Investments to the Yield Supplement Account; (iii) treat each item
of property (including, without limitation, investment property, securities,
instruments and cash) credited to the Yield Supplement Account as a Financial
Asset; (iv) not enter into any agreement with any other person relating to the
Yield Supplement Account pursuant to which agreement it has agreed to comply
with Entitlement Orders made by such person; (v) not accept for credit to the
Yield Supplement Account any Permitted Investment which is registered in the
name of, or payable to the order of, or specially indorsed to, any person
other than such Qualified Trust Institution unless it has been indorsed to
such Qualified Trust Institution or is indorsed in blank and (vi) such
Qualified Trust Institution has agreed that it will waive any right of set-off
unrelated to its fees for such Account.
(g) No later than 11:00 A.M. (New York time) on each Deposit Date, the
Servicer shall deposit to the Collection Account an amount equal to the Yield
Supplement Amount for the related Collection Period; provided that if, on any
Payment Date, the Servicer fail to pay the Yield Supplement Amount, then, in
such event, the Trustee shall direct the Collateral Agent to withdraw from the
Yield Supplement Account an amount equal to such deficiency and deposit such
amount to the Collection Account.
(h) The Yield Supplement Account shall be under the sole custody and
control of the Collateral Agent. If, at any time, the Yield Supplement Account
ceases to be a segregated trust account, the Collateral Agent shall within ten
(10) Business Days (or such longer period, not to exceed thirty (30) calendar
days, as to which each Rating Agency may consent) establish a new Yield
Supplement Account as a segregated trust account and shall transfer any cash
and/or any investments that are in the existing Yield Supplement Account which
is no longer a segregated trust account to such new Yield Supplement Account.
(i) Amounts on deposit in the Yield Supplement Account will be released
to the Depositor on each Payment Date to the extent that the amount on deposit
in the Yield Supplement Account exceeds the Specified Yield Supplement
Balance. Upon a distribution to the Depositor of amounts from the Yield
Supplement Account, the Certificateholders will not have any rights in, or
claims to, such amounts. Amounts properly distributed to the Depositor
35
from the Yield Supplement Account or otherwise shall not be available under
any circumstances to the Trust, the Trustee, the Collateral Agent or the
Certificateholders and the Depositor shall in no event thereafter be required
to refund any such distributed amounts.
(j) Investment earnings attributable to the Yield Supplement Account
Property and proceeds therefrom shall be held by the Collateral Agent for the
benefit of the Depositor. Investment earnings attributable to the Yield
Supplement Account Property shall not be available to pay the Yield Supplement
Amount and shall not otherwise be subject to any claims or rights of the
Certificateholders or the Servicer. The Collateral Agent shall cause all
investment earnings attributable to the Yield Supplement Account to be
distributed on each Payment Date to the Depositor.]
ARTICLE IX
The Certificates
Section 9.1 The Certificates. Unless otherwise specified in this
Agreement, the Certificates shall be issued in denominations of $1,000 and
integral multiples thereof; provided that one Class A Certificate and one
Class B Certificate may be issued in a denomination that includes any residual
portion of the Original Class A Certificate Balance and the Original Class B
Certificate Balance. The Certificates shall be executed on behalf of the Trust
by manual or facsimile signature of an Authorized Officer or other authorized
signatory of the Trustee. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall
have been affixed, authorized to sign on behalf of the Trust, shall be valid
and binding obligations of the Trust, notwithstanding that such individuals
shall have ceased to be so authorized prior to the execution, authentication
and delivery of such Certificates or did not hold such offices or positions at
the date of such Certificates. No Certificate shall entitle the Holder to any
benefit under this Agreement, or shall be valid for any purpose, unless there
shall appear on such Certificate an authentication substantially in the form
set forth in Exhibit A and Exhibit B hereto, as applicable, executed by the
Trustee by manual or facsimile signature. Such authentication shall constitute
conclusive evidence that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
Section 9.2 Execution, Authentication and Delivery of Certificates. In
exchange for the Receivables and the other assets of the Trust, simultaneously
with the sale, assignment and transfer to the Trustee of the Receivables, the
constructive delivery to the Trustee of the Receivable Files and the delivery
to the Trustee of the other components of the Trust, the Trustee shall deliver
to, or upon the order of, the Depositor, Certificates duly executed by the
Trustee, on behalf of the Trust, and authenticated by the Trustee in
authorized denominations equaling in the aggregate the Original Pool Balance
and evidencing the entire ownership of the Trust.
Section 9.3 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and certificate registrar (the "Transfer Agent
and Certificate Registrar"), in
36
accordance with the provisions of Section 9.7, a register (the "Certificate
Register") in which, subject to such reasonable regulations as it may
prescribe, the Transfer Agent and Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Certificate Register shall list the names of the
Certificateholders and their respective ownership interests in the Trust, and
shall be treated as definitive and binding for all purposes hereunder. Only
those persons registered as Certificateholders in the Certificate Register
shall be recognized as having any interest in the Trust or Trust estate or as
possessing the rights of a Certificateholder hereunder. A transfer of
ownership of a Certificate shall be effectuated only by an appropriate entry
in the Certificate Register. _________________ is hereby initially appointed
Transfer Agent and Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided.
In the event that, subsequent to the date of issuance of the Certificates, the
Trustee is unable to act as Transfer Agent and Certificate Registrar, the
Trustee shall, with the consent of the Depositor, appoint another bank or
trust company, having an office or agency located in New York City and which
agrees to act in accordance with the provisions of this Agreement applicable
to it, to act, as successor Transfer Agent and Certificate Registrar under
this Agreement.
_________________ shall be permitted to resign as Transfer Agent and
Certificate Registrar upon 30 days' written notice to the Depositor and the
Servicer; provided, however, that such resignation shall not be effective and
_________________ shall continue to perform its duties as Transfer Agent and
Certificate Registrar until the Trustee has appointed a successor Transfer
Agent and Certificate Registrar with the consent of the Depositor.
Upon surrender for registration of transfer of any Class A Certificate or
Class B Certificate at the office or agency of the Transfer Agent and
Certificate Registrar maintained pursuant to Section 9.7, the Transfer Agent
and Certificate Registrar shall make an appropriate entry in the Certificate
Register to reflect such transfer, and the Trustee shall execute, authenticate
and (if the Transfer Agent and Certificate Registrar is different than the
Trustee, then the Transfer Agent and Certificate Registrar shall) deliver, in
the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount. At the
option of a Certificateholder, Class A Certificates or Class B Certificates
may be exchanged for other Class A Certificates or Class B Certificates, as
the case may be, in authorized denominations of a like aggregate amount at
such office or agency.
Whenever any Class A Certificate or Class B Certificate is surrendered
for exchange, the Trustee shall execute, authenticate and (if the Transfer
Agent and Certificate Registrar is different than the Trustee, then the
Transfer Agent and Certificate Registrar shall) deliver the Certificates which
the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Transfer Agent and Certificate Registrar duly executed
by the Holder, which signature on such assignment must be guaranteed by a
member of the New York Stock Exchange or a commercial bank or trust company.
37
Each Certificate surrendered for registration of transfer or exchange
shall be cancelled by the Transfer Agent and Certificate Registrar or retained
in accordance with its standard retention policy and disposed of or retained
in a manner satisfactory to the Trustee and the Depositor.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Transfer Agent and Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of
Certificates.
Section 9.4 Mutilated, Destroyed, Lost, or Stolen Certificates. If (a)
any mutilated Class A Certificate or Class B Certificate shall be surrendered
to the Transfer Agent and Certificate Registrar, or if the Transfer Agent and
Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss, or theft of any Class A Certificate or Class B Certificate
and (b) there shall be delivered to the Trustee and the Transfer Agent and
Certificate Registrar such security or indemnity as may be required to save
each of them harmless, then, in the absence of notice to the Trustee that
such, Class A Certificate or Class B Certificate shall have been acquired by a
bona fide purchaser, the Trustee on behalf of the Trust shall execute,
authenticate and (if the Transfer Agent and Certificate Registrar is different
from the Trustee, then Transfer Agent and Certificate Registrar shall)
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Class A Certificate or Class B Certificate, a new Class A Certificate
or Class B Certificate of like tenor and denomination but bearing a number not
contemporaneously outstanding. In connection with the issuance of any new
Class A Certificate or Class B Certificate under this Section 9.4, the Trustee
or the Transfer Agent and Certificate Registrar, as the case may be, may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any Replacement Class A
Certificate or Class B Certificate issued pursuant to this Section 9.4 shall
constitute conclusive evidence of ownership in the Trust, as if originally
issued, whether or not a lost, stolen, or destroyed Certificate shall be found
at any time.
Section 9.5 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Certificate Registrar or any agent of any of them may treat
the Person in whose name any Certificate shall be registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to
Section 7.5(b) and for all other purposes whatsoever, and none of the Trustee,
the Paying Agent, the Transfer Agent and Certificate Registrar or any agent of
any of them shall be bound by any notice to the contrary.
Section 9.6 Access to List of Certificateholders' Names and Addresses.
The Transfer Agent and Certificate Registrar shall furnish to the Servicer or
the Paying Agent (or to the Trustee if the Trustee is not the Transfer Agent
and Certificate Registrar), within 15 days after receipt by the Transfer Agent
and Certificate Registrar of a request therefor from the Servicer, the Trustee
or the Paying Agent in writing, a list of the names and addresses of the
Certificateholders as of the most recent Record Date, in such form as the
Servicer, the Trustee or the Paying Agent may reasonably require. If, at such
time, if any, as Definitive Certificates have been issued, three or more
Certificateholders or one or more Holders of Certificates aggregating
38
not less than 25% of the Pool Balance apply in writing to the Transfer Agent
and Certificate Registrar (or the Trustee if the Trustee is acting as the
Transfer Agent and Certificate Registrar), and such application states that
the applicants desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and
such application is accompanied by a copy of the communication that such
applicants propose to transmit, then the Transfer Agent and Certificate
Registrar shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Each Certificateholder, by receiving and
holding a Certificate, shall be deemed to have agreed not to hold any of the
Servicer, the Trustee, the Transfer Agent and Certificate Registrar or any of
their respective agents accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
Section 9.7 Maintenance of Office or Agency. The Transfer Agent and
Certificate Registrar shall maintain in New York, New York an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange. The Transfer Agent and Certificate
Registrar initially designates its agency located at ___________________,
Attention: ____________________, as its office for such purposes. The Transfer
Agent and Certificate Registrar shall give prompt written notice to the
Trustee, the Servicer and to Certificateholders of any change in the location
of such office or agency.
Section 9.8 Book-Entry Certificates. Upon original issuance, the Class A
Certificates and the Class B Certificates, other than the Class A Certificate
and the Class B Certificate representing the residual amount of the Original
Class A Certificate Balance and the Original Class B Certificate Balance,
respectively, which shall be issued upon the written order of the Depositor,
shall be issued in the form of one or more typewritten Certificates
representing the Book-Entry Certificates, to be delivered to or to the order
of the initial Clearing Agency, by, or on behalf of, the Depositor. The
Certificates shall initially be registered on the Certificate Register in the
name of CEDE & Co., the nominee of the initial Clearing Agency, and no
Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Class A Certificates or the Class B
Certificates, as the case may be, except as provided in Section 9.10. Unless
and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to Class A Certificateholders or the Class B
Certificateholders pursuant to Section 9.10:
(i) the provisions of this Section 9.8 shall be in full force and
effect;
(ii) the Depositor, the Servicer, the Paying Agent, the Transfer
Agent and Certificate Registrar and the Trustee may deal with the
Clearing Agency and the Clearing Agency Participants for all purposes
(including the making of distributions in respect of the Certificates and
the taking of actions by the Certificateholders) as the authorized
representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 9.8 conflict
with any other provisions of this Agreement, the provisions of this
Section 9.8 shall control;
39
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency (or to the extent Certificate Owners are not
Clearing Agency Participants through the Clearing Agency Participants
through which such Certificate Owners own Book-Entry Certificates) and
shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants and all references in this Agreement to actions by
Certificateholders shall refer to actions taken by the Clearing Agency
upon instructions from the Clearing Agency Participants, and all
references in this Agreement to distributions, notices, reports and
statements to Certificateholders shall refer to distributions, notices,
reports and statements to the Clearing Agency or its nominee, as
registered holder of the Certificates, as the case may be, for
distribution to Certificate Owners in accordance with the procedures of
the Clearing Agency; and
(v) pursuant to the Depository Agreement, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the Certificates to the Clearing Agency Participants, for
distribution by such Clearing Agency Participants to the Certificate
Owners or their nominees.
Section 9.9 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 9.10, the Trustee and the Paying Agent shall give
all such notices and communications specified herein to be given by it to
Certificateholders to the Clearing Agency.
Section 9.10 Definitive Certificates. If (i) (A) the Servicer advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement and (B)
the Trustee or the Servicer is unable to locate a qualified successor, (ii)
the Servicer, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Servicing Termination, Certificate Owners
representing in the aggregate not less than 50% of the Pool Balance advise the
Trustee and the Clearing Agency through the Clearing Agency Participants in
writing, and the Clearing Agency shall so notify the Trustee, that the
continuation of a book-entry system through the Clearing Agency, is no longer
in the best interests of the Certificate Owners, the Trustee shall notify the
Clearing Agency of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee by the Clearing Agency of Certificates registered in
the name of the nominee of the Clearing Agency, accompanied by re-registration
instructions from the Clearing Agency for registration, the Trustee shall
execute, on behalf of the Trust, authenticate and deliver Definitive
Certificates in accordance with such instructions. The Servicer shall arrange
for, and will bear all costs of, the printing and issuance of such Definitive
Certificates. None of the Depositor, the Servicer, the Transfer Agent and
Certificate Registrar or the Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on such instructions. Upon the issuance of Definitive Certificates,
all references herein to obligations imposed upon or to be
40
performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Transfer Agent and Certificate Registrar, to the extent
applicable with respect to such Definitive Certificates and the Trustee, the
Paying Agent and the Transfer Agent and Certificate Registrar shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder.
Section 9.11 Appointment of Paying Agent.
(a) The Paying Agent shall have the revocable power to withdraw funds
from the Collection Account and make distributions to the Certificateholders
pursuant to Section 7.5 hereof. The Trustee may revoke such power and remove
the Paying Agent, if the Trustee determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect or for other good cause. The Paying Agent shall
initially be _________________. _________________ shall be permitted to resign
as Paying Agent upon 30 days' written notice to the Servicer, the Trustee and
the Collateral Agent. In the event that _________________ shall no longer be
the Paying Agent, the Trustee shall appoint a successor to act as Paying
Agent, which shall be a bank or trust company. If at any time the Trustee
shall be acting as the Paying Agent, the provisions of Sections 13.2, 13.4 and
13.5 shall apply to the Trustee in its role as Paying Agent.
(b) The Trustee shall cause the Paying Agent (if other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if
any, held by it for payment to the Certificateholders in trust for the benefit
of the Certificateholders or other party entitled thereto until such sums
shall be paid to such Certificateholders or other party entitled thereto and
shall agree, and if the Trustee is the Paying Agent it hereby agrees, that it
shall comply with all requirements of the Code regarding the withholding by
the Trustee of payments in respect of federal income taxes due from Class A
Certificateholders or Class B Certificateholders.
(c) _________________ in its capacity as initial Paying Agent hereunder
agrees that it (i) will hold all sums held by it hereunder for payment to the
Certificateholders in trust for the benefit of the Certificateholders or other
parties entitled thereto until such sums shall be paid to such
Certificateholders or other party entitled thereto and (ii) shall comply with
all requirements of the Code regarding the withholding by the Trustee of
payments in respect of federal income taxes due from Certificate Owners.
Section 9.12 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Trustee by an authenticating agent and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent. Any
authenticating agent appointed by the Trustee shall require the consent of the
Depositor, which consent may not be unreasonably withheld.
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(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and the Depositor. The Trustee may at any
time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Depositor. Upon receiving
such a notice of resignation or upon such a termination, or in case at any
time an authenticating agent shall cease to be acceptable to the Trustee or
the Depositor, the Trustee promptly may appoint a successor authenticating
agent with the consent of the Depositor. Any successor authenticating agent
upon acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an authenticating agent. Any successor authenticating
agent appointed by the Trustee shall require the consent of the Depositor,
which consent may not be unreasonably withheld.
(d) The Servicer shall pay the Authenticating Agent from time to time
reasonable compensation for its services under this Section 9.12.
(e) The provisions of Sections 13.2, 13.4 and 13.5 shall be applicable to
any authenticating agent.
(f) Pursuant to an appointment made under this Section 9.12, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in substantially
the following form:
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This is one of the certificates referred to in the within mentioned
Agreement.
[NAME OF TRUSTEE]
as Trustee
By:
---------------------------------------
Authorized Signatory
or
[NAME OF AUTHENTICATING AGENT]
as Authenticating Agent
for the Trustee,
By:
---------------------------------------
Authorized Signatory
Section 9.13 Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or
by an agent duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, when required, to the Depositor
or the Servicer. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee, the Depositor and the
Servicer, if made in the manner provided in this Section 9.13.
(b) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be
done, by the Trustee, the Depositor or the Servicer in reliance thereon,
whether or not notation of such action is made upon such Certificate.
(d) The Trustee may require such additional proof of any matter referred
to in this Section 9.13 as it shall deem necessary.
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ARTICLE X
The Depositor
Section 10.1 Representations of Depositor. The Depositor makes the
following representations on which the Trustee shall rely in accepting the
Receivables in trust and authenticating the Certificates. The representations
shall speak as of the execution and delivery of this Agreement, and shall
survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Depositor has been duly
organized and is validly existing as a limited liability company in good
standing under the laws of Delaware, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, power, authority, and legal right to acquire and own the
Receivables.
(ii) Power and Authority. The Depositor has the power and authority
to execute and deliver this Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the property to
be sold and assigned to the Trustee as part of the Trust and has duly
authorized such sale and assignment to the Trustee by all necessary
corporate action; and the execution, delivery, and performance of this
Agreement has been duly authorized by the Depositor by all necessary
limited liability company action.
(iii) Binding Obligations. This Agreement constitutes a legal,
valid, and binding obligation of the Depositor enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights in general and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(iv) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not (a)
conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the limited liability company agreement of the Depositor, or
conflict with or breach any of the material terms or provisions of, or
constitute (with or without notice or lapse of time) a default under, any
indenture, agreement, or other instrument to which the Depositor is a
party or by which it is bound, (b) result in the creation or imposition
of any lien upon any of its properties pursuant to the terms of any such
indenture, agreement, or other instrument, or (c) violate any law or, to
the best of the Depositor's knowledge, any order, rule, or regulation
applicable to the Depositor of any court or of any federal or state
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Depositor or its properties.
(v) No Proceedings. There are no proceedings or investigations
pending, or, to the best of the Depositor's knowledge, threatened, before
any court, regulatory body,
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administrative agency, or other governmental instrumentality having
jurisdiction over the Depositor or its properties (a) asserting the
invalidity of this Agreement or the Certificates, (b) seeking to prevent
the issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement, (c) seeking any
determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement or the Certificates or (d) relating to
the Depositor and which might adversely affect the federal income tax
attributes of the Certificates.
Section 10.2 Liability of Depositor; Indemnities. The Depositor shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor in such capacity under this Agreement
and shall have no other obligations or liabilities hereunder.
The Depositor shall indemnify, defend and hold harmless the Trustee and
the Trust from and against any taxes that may at any time be asserted against
the Trustee or the Trust with respect to, and as of the date of, the sale of
the Receivables to the Trust or the issuance and original sale of the
Certificates, including any sales, gross receipts, general corporation,
tangible or intangible personal property, privilege, or license taxes (but
not, in the case of the Trust, including any taxes asserted with respect to
ownership of the Receivables or federal or other income taxes, including
franchise taxes measured by net income), arising out of the transactions
contemplated by this Agreement, and costs and expenses in defending against
the same.
The Depositor shall indemnify, defend, and hold harmless the Trustee, its
officers, directors, employees and agents or the Trust from and against any
loss, liability or expense incurred by reason of (i) the Depositor's willful
misfeasance, bad faith, or negligence in the performance of its duties
hereunder, or by reason of reckless disregard of the obligations and duties
hereunder and (ii) the Depositor's violation of federal or state securities
laws in connection with the registration of the sale of the Certificates.
Indemnification under this Section 10.2 shall survive the termination of
this Agreement and the resignation or removal of the Trustee and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Depositor shall have made any indemnity payments to the Trust or the Trustee
pursuant to this Section 10.2 and the Trust or the Trustee thereafter shall
collect any of such amounts from others, the Trust shall repay such amounts to
the Depositor, without interest.
Section 10.3 Merger or Consolidation of Depositor. Any corporation or
other entity (i) into which the Depositor may be merged or consolidated, (ii)
which may result from any merger, conversion, or consolidation to which the
Depositor shall be a party, or (iii) which may succeed to all or substantially
all of the business of the Depositor, which corporation or other entity
executes an agreement of assumption to perform every obligation of the
Depositor under this Agreement, shall be the successor to the Depositor
hereunder without the execution or filing of any document or any further act
by any of the parties to this Agreement. The Depositor shall give prompt
written notice of any merger or consolidation to the Trustee, the Servicer and
the Rating Agencies.
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Section 10.4 Limitation on Liability of Depositor and Others. The
Depositor and any director, officer, employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor shall not be under any obligation
under this Agreement to appear in, prosecute, or defend any legal action that
shall be unrelated to its obligations under this Agreement, and that in its
opinion may involve it in any expense or liability.
Section 10.5 Depositor May Own Certificates. The Depositor and any Person
controlling, controlled by, or under common control with the Depositor may in
its individual or any other capacity become the owner or pledgee of
Certificates with the same rights as it would have if it were not the
Depositor or an affiliate thereof, except as otherwise provided in the
definition of "Certificateholder", "Class A Certificateholder" and "Class B
Certificateholder" specified in Section 1.1. Certificates so owned by or
pledged to the Depositor or such controlling or commonly controlled Person
shall have an equal and proportionate benefit under the provisions of this
Agreement, without preference, priority, or distinction as among all of the
Certificates.
ARTICLE XI
The Servicer
Section 11.1 Representations of Servicer. The Servicer makes the
following representations on which the Trustee shall rely in accepting the
Receivables in trust and authenticating the Certificates. The representations
shall speak as of the execution and delivery of this Agreement, and shall
survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Servicer has been duly
organized and is validly existing as a federally chartered savings
association in good standing under the laws of the United States of
America, with power and authority to own its properties and to conduct
its business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has, power,
authority, and legal right to acquire, own, sell, and service the
Receivables and to hold the Receivable Files as custodian on behalf of
the Trustee.
(ii) Power and Authority. The Servicer has the power and authority
to execute and deliver this Agreement and to carry out its terms; and the
execution, delivery, and performance of this Agreement has been duly
authorized by the Servicer by all necessary corporate action.
(iii) Binding Obligations. This Agreement constitutes a legal,
valid, and binding obligation of the Servicer enforceable in accordance
with its terms subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, liquidation or other similar laws and
equitable principles relating to or affecting the enforcement of
creditors' rights in general (including creditors of federally chartered
savings associations) and by
46
general principles of equity regardless of whether such enforceability is
considered in a proceeding in equity or law.
(iv) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, nor
constitute (a) (with or without notice or lapse of time) a default under,
the articles of association or bylaws of the Servicer, or conflict with
or breach any of the material terms or provisions of, or constitute (with
or without notice or lapse of time) a default under, any indenture,
agreement, or other instrument to which the Servicer is a party or by
which it shall be bound, (b) result in the creation or imposition of any
lien upon any of its properties pursuant to the terms of any such
indenture, agreement, or other instrument or (c) violate any law or, to
the best of the Servicer's knowledge, any order, rule, or regulation
applicable to the Servicer of any court or of any federal or state
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer or its properties.
(v) No Proceedings. There are no proceedings or investigations
pending, or to the best of the Servicer's knowledge, threatened, before
any court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer or its properties
(a) asserting the invalidity of this Agreement or the Certificates, (b)
seeking to prevent the issuance of the Certificates or the consummation
of any of the transactions contemplated by this Agreement, (c) seeking
any determination or ruling that might materially and adversely affect
the performance by the Servicer of its obligations under, or the validity
or enforceability of, this Agreement or the Certificates, or (d) relating
to the Servicer and which might adversely affect the federal income tax
attributes of the Certificates.
(vi) Fidelity Bond. The Servicer maintains a fidelity bond in such
form and amount as is customary for banks acting as custodian of funds
and documents in respect of retail automotive installment sales
contracts.
Section 11.2 Liability of Servicer; Indemnities. The Servicer shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement and shall have no
other obligations or liabilities hereunder.
(i) The Servicer shall defend, indemnify, and hold harmless the
Trustee, its officers, directors, employees and agents, the Trust and the
Certificateholders from and against any and all costs, expenses, losses,
damages, claims, and liabilities, arising out of or resulting from the
use, ownership, or operation by the Servicer or any affiliate thereof of
a Financed Vehicle.
(ii) The Servicer shall indemnify, defend, and hold harmless the
Trustee, its officers, directors, employees and agents from and against
any taxes that may at any time be asserted against the Trustee or the
Trust with respect to the transactions contemplated in this Agreement,
including, without limitation, any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or
license taxes (but not
47
including any taxes asserted with respect to, and as of the date of, the
sale of the Receivables to the Trust or the issuance and original sale of
the Class A Certificates and the Class B Certificates, or asserted with
respect to ownership of the Receivables or federal or other income taxes,
including franchise taxes measured by net income) arising out of
distributions on the Certificates and costs and expenses in defending
against the same.
(iii) The Servicer shall indemnify, defend, and hold harmless the
Trustee, its officers, directors, employees and agents and the Trust and
the Certificateholders from and against any and all costs, expenses,
losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed
upon the Trustee and the Trust or the Certificateholders through the
willful misfeasance, negligence, or bad faith of the Servicer in the
performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement, except that
employees of the Servicer or its affiliates will be protected against
liability that would otherwise be imposed by reason of negligence.
(iv) The Servicer shall indemnify, defend, and hold harmless the
Trustee, its officers, directors, employees and agents, from and against
all costs, expenses, losses, claims, damages, and liabilities arising out
of or incurred in connection with the acceptance or performance of the
trusts and duties herein contained, except to the extent that such costs,
expenses, losses, claims, damage or liabilities: (1) shall be due to the
willful misfeasance, bad faith or negligence of the Trustee; (2) shall
arise from the Trustee's breach of any of its representations or
warranties set forth in Section 13.14; or (3) shall be one as to which
the Depositor is required to indemnify the Trustee.
Indemnification under this Section 11.2 shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Servicer shall have
made any indemnity payments pursuant to this Section 11.2 and the recipient
thereafter collects any of such amounts from others, the recipient shall
promptly repay such amounts to the Servicer, without interest. The
indemnification obligations of the Servicer set forth in this Section 11.2
shall survive the termination of this Agreement, the termination of the
Servicer with respect to any act or failure to act which occurs prior to such
Servicer's termination and the resignation or removal of the Trustee.
Section 11.3 Merger or Consolidation of Servicer. Any corporation or
other entity (i) into which the Servicer may be merged or consolidated, (ii)
which may result from any merger, conversion, or consolidation to which the
Servicer shall be a party, (iii) which may succeed to all or substantially
all of the business of the Servicer, which corporation or other entity
executes an agreement of assumption to perform every obligation of the
Servicer hereunder, or (iv) in which 50% or more of the equity of which is
owned, directly or indirectly by the Servicer shall be the successor to the
Servicer under this Agreement without the execution or filing of any document
or any further act on the part of any of the parties to this Agreement. The
Servicer shall promptly inform the Trustee, the Depositor and the Rating
Agencies in writing of any such merger or consolidation.
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Section 11.4 Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Trust,
the Trustee, or the Certificateholders, except as provided under this
Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; provided,
however, that this provision shall not protect the Servicer or any such Person
against any liability that would otherwise be imposed by reason of willful
misfeasance, negligence, or bad faith in the performance of duties or by
reason of reckless disregard of obligations and duties under this Agreement.
The Servicer and any director or officer or employee or agent of the Servicer
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 this Agreement.
(b) The Servicer and any director or officer or employee or agent of the
Servicer shall be indemnified by the Trust and held harmless against any loss,
liability, or expense including reasonable attorneys' fees and expenses
incurred in connection with any legal action relating to the performance of
the Servicer's duties under this Agreement, other than (i) any loss or
liability otherwise reimbursable pursuant to this Agreement; (ii) any loss,
liability, or expense incurred solely by reason of the Servicer's willful
misfeasance, negligence, or bad faith in the performance of its duties
hereunder or by reason of reckless disregard of its obligations and duties
under this Agreement; and (iii) any loss, liability, or expense for which the
Trust is to be indemnified by the Servicer under this Agreement. Any amounts
due the Servicer pursuant to this subsection shall be payable on a Payment
Date from the Total Collections on deposit in the Collection Account only
after all payments required to be made on such date to the Certificateholders
and the Servicer have been made, payments of amounts, if any, due the Trustee
from the Trust pursuant to Section 13.8 have been made, and deposits of any
amount required to be deposited into the Reserve Account pursuant to Section
7.5(b)(vi) to maintain the amount on deposit therein (exclusive of investment
income and earnings on amounts on deposit therein) at the Specified Reserve
Account Balance on such date have been made.
(c) Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute, or defend any legal action that shall
not be incidental to its obligations under this Agreement, and that in its
opinion may involve it in any expense or liability; provided, however, that
the Servicer may undertake any reasonable action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the
parties to this Agreement and the interests of the Certificateholders under
this Agreement. In such event, the legal expenses and costs of such action and
any liability resulting therefrom shall be expenses, costs, and liabilities of
the Trust, and the Servicer shall be entitled to be reimbursed therefor. Any
amounts due the Servicer pursuant to this subsection shall be payable on a
Payment Date from the Total Collections on deposit in the Collection Account
only after all payments required to be made on such date to the
Certificateholders and the Servicer have been made, payments of amounts, if
any, due the Trustee from the Trust pursuant to Section 13.8 have been made
and deposits of any amount required to be deposited into the Reserve Account
pursuant to Section 7.5(b)(vi) to maintain the amount on deposit therein
(exclusive of investment
49
income and earnings on amounts on deposit therein) at the Specified Reserve
Account Balance on such date have been made.
The Person to be indemnified shall provide the Trustee with a certificate
and accompanying Opinion of Counsel requesting indemnification and setting
forth the basis for such request.
Section 11.5 Servicer Not To Resign. The Servicer shall not resign from
its obligations and duties under this Agreement except (i) upon determination
that the performance of its duties shall no longer be permissible under
applicable law or (ii) in the event of the appointment of a successor Servicer
pursuant to Section 12.2, upon satisfaction of the Rating Agency Condition.
Notice of any such determination permitting the resignation of USAA Federal
Savings Bank shall be communicated to the Trustee, and the Rating Agencies 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 permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Trustee concurrently
with such notice. No such resignation shall become effective until the Trustee
or a successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 12.2.
Section 11.6 Delegation of Duties. So long as USAA Federal Savings Bank
or the Trustee acts as Servicer, the Servicer shall have the right, in the
ordinary course of its business, to delegate any of its duties under this
Agreement to any Person. Any compensation payable to such Person shall be paid
by the Servicer from its own funds and none of the Trust, the Trustee or the
Certificateholders shall have any liability to such Person with respect
thereto. Notwithstanding any delegation of duties by the Servicer pursuant to
this Section 11.6, the Servicer shall not be relieved of its liability and
responsibility with respect to such duties, and any such delegation shall not
constitute a resignation within the meaning of Section 11.5 hereof. Any
agreement that may be entered into by the Servicer and a Person that provides
for any delegation of the Servicer's duties hereunder shall be deemed to be
between the Servicer and such Person alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect thereto.
ARTICLE XII
Events of Servicing Termination
Section 12.1 Events of Servicing Termination. If any one of the following
events (an "Event of Servicing Termination") shall occur and be continuing:
(i) any failure by the Servicer (or so long as the Seller is the
Servicer, the Seller) to deliver to the Trustee, for distribution to
Certificateholders, any proceeds or payment required to be so delivered
under the terms of the Certificates and this Agreement (or, in the case
of a payment or deposit to be made not later than any Deposit Date, the
failure to make such payment or deposit on the related Payment Date), in
each case that continues unremedied for a period of five Business Days
after (A) discovery by
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an officer of the Servicer (or so long as the Seller is the Servicer, the
Seller) or (B) written notice (1) to the Servicer by the Trustee or (2)
to the Trustee and the Servicer (or so long as the Seller is the
Servicer, the Seller) by the Holders of Certificates evidencing not less
than 25% of the Pool Balance;
(ii) failure on the part of the Servicer (or so long as the Seller
is the Servicer, the Seller) duly to observe or to perform in any
material respect any other covenants or agreements of the Servicer (or so
long as the Seller is the Servicer, the Seller) set forth in the
Certificates or in this Agreement, which failure shall (a) materially and
adversely affect the rights of the Trust or the Certificateholders (which
determination shall be made without regard to whether funds on deposit in
the Reserve Account are available to the Certificateholders) and (b)
continues unremedied for a period of 90 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given (1) to the Servicer (or so long as the Seller is the
Servicer, the Seller) by the Trustee or (2) to the Trustee and the
Servicer (or so long as the Seller is the Servicer, the Seller) by the
Holders of Certificates evidencing not less than 25% of the Pool Balance;
provided, however, that a failure on the part of the Servicer, other than
USAA Federal Savings Bank for so long as it is the Servicer, to observe
and comply with the provisions of Section 11.6 or to meet the eligibility
criteria set forth in Section 12.2 shall constitute an Event of Servicing
Termination without regard to (a) and (b) above;
(iii) So long as USAA Federal Savings Bank or another depository
institution is not the Servicer, the entry of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver, or liquidator
for the Servicer in any insolvency, readjustment of debt, marshalling of
assets and liabilities, or similar proceedings, or for the winding up or
liquidation of its respective affairs, and the continuance of any such
decree or order unstayed and in effect for a period of sixty (60)
consecutive days; or
(iv) So long as USAA Federal Savings Bank or another depository
institution is not the Servicer, the consent by the Servicer to the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities, or similar
proceedings of or relating to the Servicer of or relating to
substantially all of its property; or the Servicer shall admit in writing
its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or
voluntary suspend payment of its obligations or become insolvent;
then, and in each and every case and so long as an Event of Servicing
Termination shall not have been remedied, either the Trustee, or the Holders
of Certificates evidencing not less than a majority of the Pool Balance, by
notice given in writing to the Servicer (and to the Trustee if given by the
Certificateholders) may terminate all of the rights and obligations of the
Servicer under this Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Certificates or the Receivables or otherwise,
shall pass to and be vested in the Trustee pursuant to this Section 12.1; and,
without limitation, the Trustee shall be 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 Receivable Files, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer and the
Trustee in effecting the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the predecessor Servicer for deposit, shall have been
deposited by the Servicer in the Collection Account, or shall thereafter be
received with respect to a Receivable. All reasonable costs and expenses
(including attorneys' fees and disbursements) 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 12.1
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. The Trustee shall give written
notice of any termination of the Servicer to the Certificateholders and the
Rating Agencies.
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Section 12.2 Trustee to Act; Appointment of Successor. Upon the
Servicer's receipt of notice of termination pursuant to Section 12.1 the
Trustee shall, and upon the Servicer's resignation pursuant to Section 11.5
the Trustee may, be the successor in all respects to the Servicer in its
capacity as Servicer under this Agreement, and, in such case, shall be subject
to all the responsibilities, duties and liabilities arising thereafter
relating thereto placed on the Servicer by the terms and provisions of this
Agreement. As compensation therefor, the Trustee shall be entitled to such
compensation (whether payable out of the Collection Account or otherwise) as
the Servicer would have been entitled to under this Agreement if no such
notice of termination or resignation had been given. Notwithstanding the
above, the Trustee may, if it shall be unwilling so to act, or shall, if it
shall be legally unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, any established financial institution, having a net
worth of not less than $100,000,000 as of the last day of the most recent
fiscal quarter for such institution and whose regular business shall include
the servicing of automobile receivables, as successor Servicer under this
Agreement; provided, that the Rating Agency Condition shall be satisfied in
connection with such appointment. In connection with such appointment, the
Trustee may make such arrangements for the compensation of such successor
Servicer out of payments on Receivables as it and such successor Servicer
shall agree; provided, however, that no such compensation shall be in excess
of that permitted the Servicer under this Agreement. The Trustee and such
successor Servicer shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. Unless the Trustee shall
be prohibited by law from so acting, the Trustee shall not be relieved of its
duties as successor Servicer under this Section 12.2 until the newly appointed
successor Servicer shall have assumed the responsibilities and obligations of
the Servicer under this Agreement.
Section 12.3 Notification to Certificateholders. Upon delivery of written
notice by the Trustee to the Servicer or receipt by the Trustee of written
notice from Holders of Certificates evidencing not less than 25% of the Pool
Balance of an Event of Servicing Termination or upon any Servicer termination,
or appointment of a successor Servicer pursuant to this Article XII, the
Trustee shall give prompt written notice thereof to Certificateholders at
their respective addresses of record, to the Depositor and to the Rating
Agencies.
Section 12.4 Waiver of Past Defaults. The Holders of Certificates
evidencing not less than a majority of the Pool Balance, may, on behalf of all
Holders of Certificates, waive any default by the Servicer in the performance
of its obligations hereunder and its consequences, except a default in the
failure to make any required deposits to or payments from the Collection
Account in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Servicing
Termination arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived. The Servicer shall give prompt written notice of any
waiver to the Rating Agencies.
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ARTICLE XIII
The Trustee
Section 13.1 No Power to Engage in Business or to Vary Investments.
Notwithstanding any provision or agreement to the contrary in this Agreement
or in any other agreement, the Trustee, acting on behalf of the Trust (but not
individually), shall not have any power to engage in any business, commercial
or other activity for profit, and the Trustee and the Servicer shall not have
any power to vary the Trust estate, whether consisting of a Receivable, a
Permitted Investment or any other amount (other than cash payments received
with respect to Receivables) in any account maintained for the benefit of the
Trust or the Certificateholders or Certificate Owners, by disposition of said
property, investment or amount and the reinvestment of the proceeds realized
or by any other action calculated to take advantage of any variation or change
in the market or in market conditions, for the purpose of improving the
investment or return of the Certificateholders or Certificate Owners.
Section 13.2 Duties of Trustee. The Trustee, both prior to and after the
occurrence of an Event of Servicing Termination, shall undertake to perform
such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Servicing Termination known to the Trustee shall
have occurred and shall not have been cured, the Trustee shall exercise such
of the rights and powers vested in it by this Agreement, and shall use the
same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs; provided, however, that if the Trustee shall assume the duties of the
Servicer pursuant to Section 12.2, the Trustee in performing such duties shall
use the degree of skill and attention customarily exercised by a servicer with
respect to automobile and light-duty truck receivables that it services for
itself.
The Trustee, upon receipt of any resolutions, certificates, statements,
opinions, reports, documents, orders, or other instruments furnished to the
Trustee that shall be specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of any such
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Servicer to the Trustee pursuant to this
Agreement.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own bad faith or willful misfeasance; provided, however, that:
(i) Prior to the occurrence of an Event of Servicing Termination,
and after the curing of all such Events of Servicing Termination that may
have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties and
obligations as shall be specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee, the permissible right of the Trustee to do things
enumerated in this Agreement shall not be construed as a duty
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and, in the absence of bad faith on the part of the Trustee, or manifest
error, the Trustee may conclusively rely upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement as to the truth of the statements made and the correctness
of the opinions expressed therein;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by an Authorized Officer of the Trustee,
unless it shall be proved that the Trustee shall have been negligent in
ascertaining the pertinent facts; and
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered, or omitted to be taken in good faith in
accordance with this Agreement or at the direction of the Holders of
Certificates evidencing not less than 25% of the Pool Balance relating to
the time, method, and place of conducting any proceeding or any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Agreement.
The Trustee shall not be required to expend, advance or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there
shall be reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability shall not be reasonably
assured to it, and none of the provisions contained in this Agreement shall in
any event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer (including its
obligations as custodian) under this Agreement except during such time, if
any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
this Agreement.
The Trustee shall not be charged with knowledge of an Event of Servicing
Termination until such time as an Authorized Officer shall have actual
knowledge or have received written notice thereof.
Except for actions expressly authorized by this Agreement or, based upon
an Opinion of Counsel, in the best interests of Certificateholders, the
Trustee shall take no action reasonably likely to impair the security
interests created or existing under any Receivable or to impair the value of
any Receivable.
All information obtained by the Trustee regarding the Obligors and the
Receivables, whether upon the exercise of its rights under this Agreement or
otherwise, shall be maintained by the Trustee in confidence and shall not be
disclosed to any other Person, other than internal counsel, unless such
disclosure is pursuant to the terms of this Agreement or required by any
applicable law or regulation.
In the event that the Paying Agent or the Transfer Agent and Certificate
Registrar shall fail to perform any obligation, duty or agreement in the
manner or on the day required to be performed by the Paying Agent or the
Transfer Agent and Certificate Registrar, as the case may be, under this
Agreement, the Trustee shall be obligated promptly upon an Authorized Officer
obtaining knowledge thereof to perform such obligation, duty or agreement in
the manner so
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required to the extent the information necessary to such performance is
reasonably available to the Trustee after the Trustee has made a reasonable
effort to obtain such information. The Trustee shall not be liable for the
acts or omissions of any Paying Agent, any Authenticating Agent or the
Transfer Agent and Certificate Registrar appointed hereunder with due care by
the Trustee hereunder.
Section 13.3 Trustee's Assignment of Repurchased Receivables and
Trustee's Certificate. With respect to any Receivable repurchased by the
Depositor pursuant to Section 5.2 or purchased by the Servicer pursuant to
Section 6.7 or 14.2, the Trustee shall (i) assign, without recourse,
representation, or warranty, to the Depositor or the Servicer, as the case may
be, all the Trust's right, title, and interest in and to such Receivable and
the other property conveyed to the Trust pursuant to Section 3.1 with respect
to such Receivable, and all security and documents relating thereto, such
assignment being an assignment outright and not for security and (ii) as soon
as practicable after a Receivable shall have been assigned to the Depositor or
the Servicer, as the case may be, execute a Trustee's Certificate, including
the date of execution of such Trustee's Certificate and the date of this
Agreement, and accompanied by a copy of the Servicer's Certificate specified
for the related Collection Period. If, in any enforcement suit or legal
proceeding, it shall be held that the Servicer may not enforce a Receivable on
the ground that it shall not be a real party in interest or a holder entitled
to enforce the Receivable, the Trustee shall, at the Servicer's expense, take
such steps as the Trustee or the Servicer deems necessary to enforce the
Receivable, including bringing suit in the Trustee's name or the names of the
Trust or the Certificateholders; provided, that nothing in this Section 13.3
shall require the Trustee to qualify to do business in a state in which it is
not so qualified on the date of this Agreement.
Section 13.4 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 13.2:
(i) The Trustee may request, and may rely and shall be protected in
acting or refraining from acting upon, any resolution, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond, or other paper
or document (including the annual auditor's report and the letter of
independent certified public accountants described in Section 6.10, the
Servicer's Certificate described in Section 6.8, and the annual
compliance statement described in Section 6.9) believed by it to be
genuine and to have been signed or presented by the proper party or
parties.
(ii) The Trustee may consult with counsel and any advice or Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it under this
Agreement in good faith and in accordance with such advice or Opinion of
Counsel, which counsel has been selected by the Trustee with due care. A
copy of any such Opinion of Counsel shall be provided to the Depositor
and the Servicer.
(iii) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or in relation to
this Agreement, at the request, order or direction of
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any of the Certificateholders pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses, and
liabilities that may be incurred therein or thereby; provided, however,
that the Trustee shall have the right to decline to follow any such
request, order or direction if the Trustee, in accordance with an Opinion
of Counsel determines that the action or proceeding may not lawfully be
taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability or be
unjustly prejudicial to the non-assenting Certificateholders. Nothing
contained in this Agreement, however, shall relieve the Trustee of the
obligations, upon the occurrence of an Event of Servicing Termination
(that shall not have been cured), to exercise such of the rights and
powers vested in it by this Agreement, and to use the same degree of care
and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement.
(v) Prior to the occurrence of an Event of Servicing Termination and
after the curing of all Events of Servicing Termination that may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, or other paper or document, unless requested in writing to do so by
Holders of Certificates evidencing not less than 25% of the Pool Balance;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses, or liabilities likely to be incurred by
it in the making of such investigation shall be, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee may require reasonable
indemnity against such cost, expense, or liability or payment of such
expenses as a condition precedent to so proceeding. The reasonable
expense of every such examination shall be paid by the Servicer or, if
paid by the Trustee, shall be reimbursed by the Servicer upon demand.
Nothing in this clause (v) shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information
regarding the Obligors.
(vi) The Trustee may execute any of the trusts or powers hereunder
or perform any duties under this Agreement either directly or by or
through agents or attorneys or a custodian, which agents or attorneys
shall have any or all of the rights, powers, duties and obligations of
the Trustee conferred on them by such appointment.
(vii) In the event that the Trustee is also acting as Paying Agent,
Collateral Agent, Authenticating Agent or Transfer Agent and Registrar
hereunder, the rights and protections afforded to the Trustee pursuant to
this Article XIII shall also be afforded to
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each Paying Agent, Collateral Agent, Authenticating Agent or Transfer
Agent and Registrar.
Section 13.5 Trustee Not Liable for Certificates or Receivables. The
recitals contained in this Agreement and in the Certificates shall be taken as
the statements of the Depositor or the Servicer, as the case may be, and the
Trustee assumes no responsibility for the accuracy thereof. The Trustee shall
make no representations as to the validity or sufficiency of this Agreement or
of the Certificates (other than execution by the Trustee on behalf of the
Trust of, or the authentication on, the Certificates), or of any Receivable or
related document. The Trustee shall have no obligation to perform any of the
duties of the Depositor or Servicer unless explicitly set forth in this
Agreement. The Trustee shall at no time have any responsibility or liability
for or with respect to the legality, validity, and enforceability of any
security interest in any Financed Vehicle or any Receivable, or the perfection
and priority of such a security interest or the maintenance of any such
perfection and priority; the filing of any financing or continuation statement
in any public office; the preparation or filing of any report or statement
with the Securities and Exchange Commission; the efficacy of the Trust or its
ability to generate the payments to be distributed to Certificateholders under
this Agreement; the existence, condition, location, and ownership of any
Financed Vehicle; the existence and enforceability of any comprehensive and
collision insurance or credit life or credit disability insurance; the
existence and contents of any Receivable or any computer or other record
thereof; the validity of the assignment of any Receivable to the Trust or of
any intervening assignment; the completeness of any Receivable; any claim or
default asserted against a Receivable; the performance or enforcement of any
Receivable; the compliance by the Depositor or the Servicer with any warranty
or representation made under this Agreement or in any related document and the
accuracy of any such warranty or representation (except after the Trustee's
receipt of notice or other discovery of any noncompliance therewith or any
breach thereof or as otherwise provided herein); the satisfaction of any
condition relating to the Receivables; any investment of funds by the Servicer
or any loss resulting therefrom (it being understood that the Trustee shall
remain responsible for any Trust property that it may hold); the acts or
omissions of the Depositor, Servicer (including in its capacity as custodian
hereunder), or any Obligor; any action of the Servicer taken in the name of
the Trustee; or any action by the Trustee taken at the instruction of the
Servicer; provided, however, that the foregoing shall not relieve the Trustee
of its obligation to perform its duties under this Agreement. Except with
respect to a claim based on the failure of the Trustee to perform its duties
under this Agreement or based on the Trustee's willful misconduct, negligence,
or bad faith, or based on the Trustee's breach of a representation and
warranty specified in Section 13.14, no recourse shall be had for any claim or
defense based on any provision of this Agreement, the Certificates, or any
Receivable or assignment thereof against the Trustee in its individual
capacity. The Trustee shall not have any personal obligation, liability, or
duty whatsoever to any Certificateholder or any other Person with respect to
any such claim or defense, and any such claim or defense shall be asserted
solely against the Trust or any indemnitor who shall furnish indemnity as
provided in this Agreement. The Trustee shall not be accountable for the use
or application by the Depositor of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to the
Servicer in respect of the Receivables.
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Section 13.6 Trustee May Own Certificates. The Trustee in its individual
or any other capacity may become the owner or pledgee of Certificates and may
deal with the Depositor and the Servicer in banking transactions with the same
rights as it would have if it were not Trustee.
Section 13.7 Trustee's Fees and Expenses. By execution and delivery of
this Agreement, the Servicer shall covenant and agree to pay to the Trustee,
and the Trustee shall be entitled to, an annual fee agreed upon in writing
between the Servicer and the Trustee payable in advance on the Closing Date
and on each one year anniversary thereof (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust) for all services rendered by it in the execution of the trusts created
by this Agreement and in the exercise and performance of any of the powers and
duties under this Agreement of the Trustee, and the Servicer shall pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements, and advances (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) incurred or made by the Trustee under this Agreement (including
expenses, disbursements, and advances incurred in defense of any action
brought against it in connection with this Agreement) except any such expense,
disbursement, or advance as may arise from its negligence, willful
misfeasance, or bad faith or that is the responsibility of Certificateholders
under this Agreement. To the extent that the Trustee has not been paid for any
of the foregoing items by the Servicer, the Trustee shall be entitled to be
paid such amounts from amounts which are payable to the Servicer pursuant to
Section 7.5(b)(i) before payment to the Servicer of any portion thereof;
provided, however, that in the event that the Servicer shall have elected to
waive its rights to payment of the Servicing Fee or the Servicing Fee is
deferred, the Trustee shall nonetheless be entitled to receive such amounts
from payments which would ordinarily be applied to the payment of the
Servicing Fee, in the same order of priority as though such Servicing Fee were
payable. The Trustee shall be entitled to reimbursement by the Servicer for
any out-of-pocket costs or expenses (including, without limitation reasonable
fees and disbursements of one counsel to the Trustee) incurred in connection
with the review, negotiation, preparation, execution and delivery of this
Agreement or in connection with the issuance of any Certificate on the Closing
Date. The Servicer's obligation to pay such compensation and expenses shall
survive the termination of such Servicer to the extent that such obligation is
a result of services rendered prior to such Servicer's termination.
Additionally, the Servicer, pursuant to Section 13.8, shall indemnify the
Trustee with respect to certain matters, and Certificateholders, pursuant to
Section 15.3, shall upon the circumstances therein set forth, indemnify the
Trustee under certain circumstances. The provisions of this Section 13.7 shall
survive the termination of this Agreement and the resignation or removal of
the Trustee.
To the extent that the Trustee has not been paid by the Servicer for any
of the items described in the preceding paragraph for which the Servicer is
obligated, the Trustee shall be entitled to be paid for such items from
amounts which would otherwise be distributable to the Depositor under Section
7.5 of this Agreement. The covenants and agreements contained in this Section
13.7 shall survive the termination of this Agreement and shall be binding, as
applicable, on the Servicer, and any successor Servicer and the Depositor.
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Section 13.8 Indemnity. The Trustee, the Agents and their officers,
directors, agents and employees (each of the foregoing, an "Indemnified
Person") shall be indemnified by the Servicer and the Depositor and held
harmless against any loss, liability, or expense (including reasonable
attorneys' fees and expenses and expenses of litigation) arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties contained in this Agreement to the extent that (i) such loss,
liability, or expense shall not have been incurred by reason of the
Indemnified Person's willful misfeasance, bad faith, or negligence, and (ii)
such loss, liability, or expense shall not have been incurred by reason of the
Trustee's breach of its representations and warranties pursuant to Section
13.14; provided, however, that the obligations of the Servicer in this Section
13.8 shall survive such Servicer's termination with respect to the performance
of such Servicer prior to such Servicer's termination and provided, further,
that if the Servicer fails to indemnify the Indemnified Person and their
officers, directors, agents and employees pursuant to this Section 13.8, then
such indemnity shall be provided by the Trust, but any amounts so payable to
the Indemnified Person by the Trust pursuant to this Section 13.8 shall be
payable on a Payment Date only after all payments required to be made on such
date to the Certificateholders have been made, and, with respect to a
successor Servicer, if any, the Servicing Fee has been paid. The provisions of
this Section 13.8 shall survive the termination of this Agreement and the
resignation or removal of the Trustee.
Section 13.9 Eligibility Requirements for Trustee. The Trustee under this
Agreement shall at all times be a state banking corporation or national
banking association organized and doing business under the laws of such state
or the United States of America; authorized under such laws to exercise
corporate trust powers; and having a combined capital and surplus of at least
$100,000,000 as of the last day of the most recent fiscal quarter for such
institution and subject to supervision or examination by federal or state
authorities. If such state banking corporation or national banking association
shall publish reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining authority, then for
the purpose of this Section 13.9, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. The Trustee shall
at all times be rated not lower than Baa3 by Xxxxx'x or such other ratings as
are acceptable to Xxxxx'x. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 13.9, the Trustee
shall resign immediately in the manner and with the effect specified in
Section 13.10.
Section 13.10 Resignation or Removal of Trustee. The Trustee may at any
time resign and be discharged from the trust hereby created by giving written
notice thereof to the Servicer. Upon giving such notice of resignation, the
Trustee shall promptly appoint a successor Trustee by written instrument which
instrument shall be delivered to the successor Trustee. If no successor
Trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee. The Servicer shall provide notice to the Rating Agencies of
any resignation of the Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 13.9 or shall be legally unable to act, or shall be
adjudged a bankrupt or insolvent, or a
59
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation, or liquidation, then
the Trustee shall promptly resign. The Trustee shall promptly appoint a
successor Trustee by written instrument which instrument shall be delivered to
the successor Trustee. If the Trustee fails to resign, the Certificateholders
shall remove the Trustee and appoint a successor Trustee by written instrument
in duplicate, one copy of which instrument shall be delivered to the Trustee
so removed and one copy to the successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 13.10 shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to Section 13.11.
Section 13.11 Successor Trustee. Any successor Trustee appointed pursuant
to Section 13.10 shall execute, acknowledge, and deliver to the Servicer and
to its predecessor Trustee an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor Trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties, and obligations of its predecessor under this Agreement with like
effect as if originally named as Trustee. The predecessor Trustee shall
deliver to the successor Trustee all documents and statements held by it under
this Agreement, and the Servicer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties, and obligations.
No successor Trustee shall accept appointment as provided in this Section
13.11 unless at the time of such acceptance such successor Trustee shall be
eligible pursuant to Section 13.9.
Upon acceptance of appointment by a successor Trustee pursuant to this
Section 13.11, the Servicer shall mail notice of the successor of such Trustee
under this Agreement to all Certificateholders at their respective addresses
of record, and to the Rating Agencies. If the Servicer shall fail to mail such
notice within 10 days after acceptance of appointment by successor Trustee,
the successor Trustee shall cause such notice to be mailed at the expense of
the Servicer.
Section 13.12 Merger or Consolidation of Trustee. Any corporation or
other entity (i) into which the Trustee may be merged or consolidated, (ii)
which may result from any merger, conversion, or consolidation to which the
Trustee shall be a party, or (iii) which may succeed to all or substantially
all of the corporate trust business of the Trustee, which corporation or other
entity executes an agreement of assumption to perform every obligation of the
Trustee under this Agreement, shall be the successor of the Trustee hereunder,
provided such corporation or other entity shall be eligible pursuant to
Section 13.9, without the execution or filing of any instrument or any further
act on the part of any of the parties hereto. The Trustee shall provide prompt
written notice of any merger or consolidation to the Depositor, the Servicer
and the Rating Agencies.
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Section 13.13 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust or any Financed Vehicle may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such
Person, in such capacity and for the benefit of the Certificateholders, such
title to the Trust, or any part thereof, and, subject to the other provisions
of this Section 13.13, such powers, duties, obligations, rights, and trusts as
the Servicer and the Trustee may consider necessary or desirable. The Servicer
will pay all reasonable fees and expenses of any co-trustee or separate
trustee or separate trustees. The appointment of any separate trustee or
co-trustee shall not absolve the Trustee of its obligations under this
Agreement. If the Servicer shall not have joined in such appointment within 15
days after the receipt by it of a request so to do, or in the case an Event of
Servicing Termination shall have occurred and be continuing, the Trustee alone
shall have the power to make such appointment. No co-trustee or separate
trustee or separate trustees under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to Section 13.9 and
no notice to Certificateholders of the appointment of any co-trustee or
separate trustee or separate trustees shall be required pursuant to Section
13.11.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties, and obligations conferred or imposed
upon the Trustee shall be conferred upon and exercised or performed by
the Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee under this Agreement or
as successor to the Servicer under this Agreement), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties, and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee.
(ii) No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement.
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article XIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
properties specified in its
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instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Each such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Trustee,
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement
on its behalf and in its name. If any separate trustee or co-trustee shall
die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
Section 13.14 Representations and Warranties of Trustee. The Trustee
makes the following representations and warranties on which the
Depositor, the Servicer, and the Certificateholders may rely:
(i) Organization and Good Standing. The Trustee is a _______________
duly organized, validly existing, and in good standing under the laws of
the State of _______________.
(ii) Power and Authority. The Trustee has full power, authority and
legal right to execute, deliver, and perform this Agreement, and has
taken all necessary action to authorize the execution, delivery, and
performance by it of this Agreement.
(iii) No Violation. The execution and delivery of this Agreement and
the performance by the Trustee of its obligations under this Agreement do
not (a) violate any provision of any law governing the trust powers of
the Trustee or, to the best of the Trustee's knowledge, any order, writ,
judgment, or decree of any court, arbitrator, or governmental authority
applicable to the Trustee or any of its assets, (b) violate any provision
of the articles of association or by laws of the Trustee or (c) conflict
with, result in any breach of any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default under, any
indenture, agreement or other instrument to which the Trustee is a party
or by which it is bound to the extent such conflict, breach or default
would impair the Trustee's obligation or ability to perform under this
Agreement.
(iv) No Governmental Authorization Required. The execution, delivery
and performance by the Trustee of this Agreement do not require the
authorization, consent, or approval of, the giving of notice to, the
filing or registration with, or the taking of any other action in respect
of, any governmental authority or agency regulating the corporate trust
activities of the Trustee.
(v) Due Authorization, Execution and Delivery. This Agreement has
been duly authorized, executed and delivered by the Trustee and shall
constitute the legal, valid, and binding agreement of the Trustee,
enforceable in accordance with its terms except that (1) such enforcement
may be subject to bankruptcy, insolvency,
62
reorganization, moratorium or similar laws now or hereafter in effect
relating to creditors' rights generally, and (2) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to certain equitable defenses and to the discretion of the court
before which any proceeding thereof may be brought.
Section 13.15 Tax Returns. The Servicer shall prepare or shall cause to
be prepared any tax returns required to be filed by the Trust and furnish to
Certificateholders any information required by the Code or the regulations
thereunder and shall remit such returns to the Trustee for signature at least
five days before such returns are due to be filed. The Trustee, upon request,
will furnish the Servicer with all such information known to the Trustee as
may be reasonably required in connection with the preparation of all tax
returns of the Trust, and shall, upon request, execute such returns.
Section 13.16 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery
of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Certificateholders in respect
of which such judgment has been recovered.
Section 13.17 Suits for Enforcement. In case an Event of Servicing
Termination or other default by the Servicer or the Depositor hereunder shall
occur and be continuing, the Trustee, in its discretion, may proceed to
protect and enforce its rights and the rights of the Certificateholders under
this Agreement by a suit, action or proceeding in equity or at law or
otherwise whether for the specific performance of any covenant or agreement
contained in this Agreement or in aid of the execution of any power granted in
this Agreement or the enforcement of any other legal, equitable or other
remedy, as the Trustee, being advised by counsel, shall deem most effectual to
protect and enforce any of the rights of the Trustee or the
Certificateholders.
Section 13.18 Maintenance of Office or Agency. The Trustee shall maintain
at its expense in New York, an office or offices or agency or agencies where
notices and demands to or upon the Trustee in respect of the Certificates and
this Agreement may be served. The Trustee initially designates the Corporate
Trust Office as its office for such purposes. The Trustee will give prompt
written notice to the Servicer, the Paying Agent, the Transfer Agent and
Certificate Registrar, and to Certificateholders of any change in the location
of such office or agency.
ARTICLE XIV
Termination
Section 14.1 Termination of the Trust. The Trust, and the respective
obligations and responsibilities of the Depositor, the Servicer and the
Trustee, shall terminate with respect to the Certificateholders upon the first
to occur of (i) the Payment Date next succeeding the month
63
which is six months after the maturity or other liquidation of the last
Receivable and the disposition of any amounts received upon liquidation of any
property remaining in the Trust and (ii) the payment to Certificateholders of
all amounts required to be paid to them pursuant to this Agreement; provided,
however, that in no event shall the Trust created by this Agreement continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx Xxxxxxx Xxxxxx Xxxx, the former President of the United
States, living on the date of this Agreement. The Servicer shall promptly (but
in any event not later than the first day of the month of the specified
Payment Date) notify the Trustee, the Paying Agent, the Transfer Agent and
Certificate Registrar, and the Rating Agencies in writing of any prospective
termination pursuant to this Section 14.1.
Notice of any termination, specifying the Payment Date upon which the
Certificateholders may surrender their Certificates to the Transfer Agent and
Certificate Registrar for payment of the final distribution and cancellation,
shall be given promptly by the Trustee by letter to Certificateholders mailed
not earlier than the 15th day and not later than the 25th day of the month
next preceding the specified Payment Date stating the amount of any such final
payment, and that the Record Date otherwise applicable to such Payment Date is
not applicable, payments being made only upon presentation and surrender of
the Certificates at the office of the Transfer Agent and Certificate Registrar
therein specified. The Trustee shall give such notice to the Transfer Agent
and Certificate Registrar, the Paying Agent and the Rating Agencies at the
time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Paying Agent shall cause to be distributed
to Certificateholders amounts distributable on such Payment Date pursuant to
Section 7.5.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the date specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders upon receipt of the appropriate
records from the Transfer Agent and Certificate Registrar to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement.
All Certificates surrendered for payment of the final distribution with
respect to such Certificates and cancellation shall be cancelled by the
Transfer Agent and Certificate Registrar and shall be disposed of in a manner
satisfactory to the Trustee and the Depositor.
Section 14.2 Optional Purchase of All Receivables. As of the last
Business Day in any Collection Period as of which the Pool Balance (expressed
as a percentage) of initial Pool Balance shall be equal to or less than the
Optional Purchase Percentage, the Servicer shall have the option to purchase
the corpus of the Trust; provided that the Servicer shall not exercise such
option to purchase if the purchase price, as specified below, is less than the
amount required in order to distribute to certificateholders in accordance
with Section 7.5 the sum of the Class A Certificate Balance, the Class A
Interest Distributable Amount, the Class B Certificate Balance
64
and the Class B Interest Distributable Amount for the Distribution Date on
which the purchase price is applied to make such distributions. To exercise
such option, the Servicer shall notify the Trustee, the Paying Agent, and the
Transfer Agent and Certificate Registrar in writing, no later than the fifth
calendar day of the month in which such purchase is to be effected of its
intention to effect such purchase. On the Deposit Date in such month, the
Servicer shall pay the lower of (i) the aggregate Purchase Amount for the
Receivables (including Defaulted Receivables) and (ii) the fair market value
of the Receivables and shall succeed to all interests in and to the Trust
property. The payment shall be made in the manner specified in Section 7.4,
and shall be distributed pursuant to Section 7.5. The Trustee shall not permit
the purchase of the corpus of the Trust pursuant to this Section unless either
(i) the Servicer's long-term unsecured debt is rated at the time of such
purchase at least Baa3 by Xxxxx'x or (ii) the Servicer provides to the Trustee
an Opinion of Counsel in form reasonably satisfactory to the Trustee and in
form and substance satisfactory to Xxxxx'x to the effect that such purchase
will not constitute a fraudulent transfer of assets of the Servicer under
applicable state and federal law.
ARTICLE XV
Miscellaneous Provisions
Section 15.1 Amendment. This Agreement may be amended by the Depositor,
the Servicer and the Trustee, without prior notice to or the consent of any of
the Certificateholders, (i) to cure any ambiguity, to correct or supplement
any provision in this Agreement which may be inconsistent with any other
provision herein, to evidence a succession to the Servicer or the Depositor
pursuant to this Agreement or to add any other provisions with respect to
matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement; provided, however, that
such action shall not, as evidenced by an Officer's Certificate and/or an
Opinion of Counsel delivered to the Trustee, adversely and materially affect
the interests of the Trust or any of the Certificateholders and provided,
further, that the Servicer shall deliver written notice of such changes to
each Rating Agency prior to the execution of any such amendment and the Rating
Agency Condition shall be satisfied, or (ii) to effect a transfer or
assignment in compliance with Section 15.7(i) of this Agreement.
This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing not less than 51% of the Pool Balance, for the purpose of adding
any provision to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the rights of the
Certificateholders (including effecting a transfer or assignment in compliance
with Section 15.7(ii) of this Agreement); provided, however, that no such
amendment, except with the consent of the Holders of all Certificates then
outstanding, shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, or change the allocation or priority of
collections of payments of Receivables, or distributions that shall be required
to be made on any Certificate, (b) reduce the aforesaid percentage of the Pool
Balance required to consent to any such amendment or (c) reduce in any way the
shortfalls for which the Trustee may draw under the Reserve Account pursuant
to Article VII hereof. Notwithstanding anything herein to the contrary, the
Specified Reserve
65
Account Balance may be reduced to a lesser amount as determined by the
Depositor upon satisfaction of the Rating Agency Condition.
Promptly after the execution of any amendment or consent referred to in
this Section 15.1, the Trustee shall furnish a copy of such amendment or
consent to each Certificateholder and to the Rating Agencies.
It shall not be necessary for the consent of Certificateholders pursuant
to this Section 15.1 to approve the particular form of any proposed amendment
or consent, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable requirements as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement.
The Trustee shall not be obligated to enter into any such amendment which
affects the Trustee's own rights, duties or immunities under this Agreement.
Prior to the execution of any amendment to this Agreement, other than an
amendment permitted pursuant to clause (i) of the first paragraph of this
Section 15.1, the Servicer shall have received written notice from each of the
Rating Agencies that its rating of the Certificates will not be reduced or
withdrawn as a result of such amendment.
Section 15.2 Protection of Title to Trust.
(a) The Servicer 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 interests of the Trustee under this Agreement in the
Receivables and in the proceeds thereof. The Servicer shall deliver (or cause
to be delivered) to the Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Depositor nor the Servicer shall change its name,
identity, or corporate structure in any manner that would make any financing
statement or continuation statement filed by the Servicer in accordance with
paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC (or any successor provision to such Section), unless it
shall have given the Trustee at least 10 days prior written notice thereof.
(c) The Depositor and the Servicer shall give the Trustee at least 10
days prior written notice of any relocation of its principal executive office
if, as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement. The 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.
66
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Trustee,
the Servicer's master computer records (including archives) that shall refer
to a Receivable indicate clearly, by numerical code or otherwise, that such
Receivable is owned by the Trust. Indication of the Trust's ownership of a
Receivable shall be deleted from or modified on the Servicer's computer
systems when, and only when, the Receivable shall have been paid in full,
repurchased, purchased or assigned pursuant hereto.
(f) If at any time the Depositor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in a new or
used automobile or light-duty truck to any prospective purchaser, creditor, or
other transferee, the Depositor or the Servicer, as the case may be, shall
give to such prospective purchaser, creditor, or other transferee computer
tapes, records, or print-outs (including any restored from archives) that, if
they shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned by the Trust.
(g) The Servicer shall permit the Trustee and its agents upon reasonable
notice at any time during normal business hours which does not unreasonably
interfere with the Servicer's normal operations to inspect, audit, and make
copies of and abstracts from the Servicer's records regarding the Receivables.
(h) Upon request, the Servicer shall furnish to the Trustee, within five
Business Days of any request therefor, a list of all Receivables by contract
number and name of Obligor then held as part of the Trust, together with a
reconciliation of such list to the Schedule of Receivables attached as
Schedule A to this Agreement and to each of the Servicer Certificates
indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Trustee:
(1) upon the execution and delivery of this Agreement, an
Opinion of Counsel either (a) stating that, in the opinion of
such counsel and subject to customary qualifications and
assumptions, all financing statements and continuation
statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Trustee in
the Receivables, and reciting the details of such filings or
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
67
(2) on March 31 of each year, commencing with March 31,
_____, an Opinion of Counsel, dated as of such date, either (a)
stating that, in the opinion of such counsel and subject to
customary qualifications and assumptions, all financing
statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the
interest of the Trustee in the Receivables, and reciting the
details of such filings or 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.
(j) For the purpose of facilitating the execution of this Agreement and
for other purposes, this Agreement may be executed simultaneously in any
number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same
instrument.
Section 15.3 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle the Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations, and liabilities of the
parties to this Agreement or any of them.
No Certificateholder shall have any right to vote (except as provided in
Section 12.1, Section 12.4, Section 15.1 and this Section 15.3) or in any
manner otherwise control the operation and management of the Trust, or the
obligations of the parties to this Agreement, nor shall anything set forth in
this Agreement or contained in the terms of the Certificates, be construed so
as to constitute the Holders as partners or members of an association; nor
shall any Certificateholder be under any liability to any third person by
reason of any action taken pursuant to any provision of this Agreement.
No Certificateholder shall have any right by virtue or by availing itself
of any provision of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or with respect to a default under this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof and unless also the
Holders of Certificates evidencing not less than 25% of the Pool Balance shall
have made written request upon the Trustee to institute such action, suit, or
proceeding in its own name as Trustee under this Agreement and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses, and liabilities to be incurred therein or thereby, and the
Trustee, for 30 days after its receipt of such notice, request, and offer of
indemnity, shall have either neglected or refused to institute any such
action, suit or proceeding. No one or more Holders of Certificates shall have
any right in any manner whatever by virtue or by availing itself or themselves
of any provisions of this Agreement to affect, disturb, or prejudice the
rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder, or to enforce
any right, under this Agreement, except in the manner provided in this
Agreement and for the equal, ratable, and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 15.3,
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each Certificateholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
Section 15.4 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS,
RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
Section 15.5 Notices. All demands, notices, and communications under this
Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested, or sent by telecopy or other similar form of
rapid transmission and shall be deemed to have been duly given upon receipt
(a) in the case of the Depositor, USAA Acceptance, LLC, XxXxxxxxx Xxxxxxx, Xxx
Xxxxxxx, Xxxxx 00000 Attention: [ ], Telecopy Number (000) 000-0000, or at
such other address as shall be designated by the Depositor in a written notice
to the Trustee, (b) in the case of the Seller, at USAA Federal Savings Bank,
XxXxxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxx 00000 Attention: Vice President and
Banking Counsel, Telecopy Number: (000) 000-0000, or at such other address as
shall be designated by the Seller in a written notice to the Trustee, (c) in
the case of the Servicer, at USAA Federal Savings Bank, XxXxxxxxx Xxxxxxx, Xxx
Xxxxxxx, Xxxxx 00000, Attention: Vice President and Banking Counsel, Telecopy
Number: (000) 000-0000, or at such other address as shall be designated by the
Servicer in a written notice to the Trustee, and (d) in the case of the
Trustee and the Collateral Agent, at ________________________________________,
Attention: _______________, Telecopy Number: _______________ or at such other
address as shall be designated in a written notice to the Trustee. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of record of such Holder.
Any notice to a Certificateholder so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or
not the Certificateholder shall receive such notice.
Section 15.6 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
Section 15.7 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 10.3 and 11.3, neither the
Depositor nor the Servicer may transfer or assign all, or a portion of, its
rights, obligations and duties under this Agreement unless such transfer or
assignment (i) (A) will not result in a reduction or withdrawal by Standard &
Poor's or Xxxxx'x of its rating then assigned to the Certificates and (B) the
Trustee has consented to such transfer or assignment, which consent shall not
be unreasonably withheld or (ii) the Trustee and Holders of Certificates
evidencing not less than 51% of the Pool Balance consent thereto. Any transfer
or assignment with respect to the Servicer of all of its rights, obligations
and duties will not become effective until a successor Service has assumed the
69
Servicer's rights, duties and obligations under this Agreement. In the event
of a transfer or assignment pursuant to clause (ii) above, the Rating Agencies
shall be provided with notice of such transfer or assignment.
Section 15.8 Certificates Nonassessable and Fully Paid. The interests
represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever, and, upon authentication
thereof by the Trustee pursuant to Section 9.2, each Certificate shall be
deemed fully paid.
Section 15.9 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Certificateholders and
their respective successors and permitted assigns. Except as otherwise
provided in this Agreement, no other person will have any right or obligation
hereunder.
70
IN WITNESS WHEREOF, the parties have caused this Pooling and Servicing
Agreement to be duly executed by their respective officers as of the day and
year first above written.
USAA ACCEPTANCE, LLC,
as Depositor
By:
---------------------------------------
Name: _______________
Title: _______________
USAA FEDERAL SAVINGS BANK,
as Seller and Servicer
By:
---------------------------------------
Name: _______________
Title: _______________
-----------------,
as Trustee
By:
---------------------------------------
Name:
Title:
SCHEDULE A
Schedule A shall be the computer data disk or printout relating to the
Receivables delivered by the Depositor to the Trustee on the Closing Date.
Sch-A-1
SCHEDULE B
Location of Receivable Files
----------------------------
USAA Federal Savings Bank
00000 XxXxxxxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000
Sch-B-1
EXHIBIT A
FORM OF CLASS A CERTIFICATE
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
USAA AUTO LOAN GRANTOR TRUST ______
___% ASSET BACKED CERTIFICATE, CLASS A
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of motor vehicle
installment loans, secured by new and used automobiles and
light-duty trucks financed thereby and sold to the Trustee, as
defined below, on behalf of the Trust by USAA Acceptance, LLC.
(This Certificate is not a deposit account, does not represent an
interest in or obligation of USAA Acceptance, LLC, USAA Federal
Savings Bank or any of its affiliates and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any
other person or governmental authority.)
NUMBER CUSIP ______
R- [ ]
$[ ]
Final Payment Date:
---------------, ----
THIS CERTIFIES THAT __________. is the registered owner of a
nonassessable, fully paid, fractional undivided interest, in the amount set
forth above, in the USAA Auto Loan Grantor Trust ______ (the "Trust") formed
by USAA Acceptance, LLC, a limited liability company (the "Depositor"). The
Trust was created pursuant to a Pooling and Servicing Agreement dated as of
___________ __, ______ (the "Agreement") among the Depositor, the USAA Federal
Savings Bank, a federally chartered savings association (the "Seller"), acting
as Seller and Servicer, and _________________, as trustee (the trustee and any
successor in interest
Ex A-1
under the Agreement, the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth below. This Class A Certificate is one of the
duly authorized Certificates designated as "_____% Asset Backed Certificates,
Class A" (herein called the "Class A Certificates" or the "Certificates").
This Class A Certificate is issued under and is subject to the terms,
provisions, and conditions of the Agreement, to which Agreement the Holder of
this Class A Certificate by virtue of its acceptance hereof assents and by
which such Holder is bound. The property of the Trust includes a pool of motor
vehicle installment loans (the "Receivables") for the purchase of new and used
automobiles and light-duty trucks financed thereby, all monies due thereunder
on or after the Cut-off Date, security interests in the vehicles securing the
Receivables (the "Financed Vehicles"); such amounts as from time to time may
be held in the Collection Account established and maintained by the Servicer
in the name of the Trustee; benefits under the Reserve Account (described
below); an assignment of the rights of the Depositor to receive proceeds from
any claims on comprehensive and collision, credit life and credit disability
insurance policies covering the Financed Vehicles or the Obligors, as the case
may be, to the extent that such insurance policies relate to the Receivables;
and the rights with respect to any Financed Vehicle that has been repossessed
by the Servicer, on behalf of the Trustee.
Under the Agreement, there will be distributed on the ___th day of each
month or, if such __th day is not a Business Day, the next succeeding Business
Day (a "Payment Date"), commencing on ____________ __, ______, to the Person
in whose name this Class A Certificate is registered at the close of business
on the Record Date, such Certificateholder's fractional undivided interest in
the aggregate amounts allocable to interest and principal that are
distributable to the Class A Certificateholders on such Payment Date, all as
more fully described in the Agreement.
Distributions on this Class A Certificate will be made by the Paying
Agent by check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the
making of any notation hereon, except that if directed by the Depositor in the
case of Certificates registered in the name of a Clearing Agency,
distributions will be made in the form of immediately available funds. Except
as otherwise provided in the Agreement and notwithstanding the above, the
final distribution on this Class A Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Class A Certificate at the office or agency maintained
for that purpose by the Transfer Agent and Certificate Registrar in New York,
New York.
Reference is hereby made to the further provisions of this Class A
Certificate set forth below, which further provisions shall for all purposes
have the same effect as if set forth at this place.
All capitalized terms used herein and not otherwise defined shall have
the meaning assigned thereto in the Agreement.
Unless the authentication hereon shall have been executed by an
authorized officer of the Trustee or an authenticating agent acting on behalf
of the Trustee, by manual signature, this Class A Certificate shall not
entitle the holder hereof to any benefit under the Agreement or be valid for
any purpose.
Ex A-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in its
individual capacity, has caused this Class A Certificate to be duly executed.
USAA AUTO GRANTOR TRUST ______
_________________, as Trustee
By:
---------------------------------------
Authorized Signatory
Dated: __________ __, ______
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
-----------------,
as Trustee
By:
---------------------------------------
Authorized Signatory
EX A-3
USAA AUTO LOAN GRANTOR TRUST ______
____% ASSET BACKED CERTIFICATES
The Class A Certificates do not represent an obligation of, or an
interest in, the Depositor, the Seller, the Servicer, the Trustee or any
affiliate of any of them. The Certificates are limited in right of payment to
certain collections and recoveries in respect of the Receivables, all as more
specifically set forth in the Agreement. The Trust will have the benefit of a
Reserve Account. On the Business Day preceding each Payment Date (the "Deposit
Date"), the Trustee, or the Servicer on behalf of the Trustee, shall make a
withdrawal from the Reserve Account in the amount required by the Agreement,
but in no event in an amount greater than the Available Reserve Amount with
respect to such Payment Date.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Seller, the Servicer and
the Trustee with the consent of the Holders of Certificates evidencing not
less than 51% of the Pool Balance. Any such consent by the Holder of this
Class A Certificate shall be conclusive and binding on such Holder and on all
future Holders of this Class A Certificate and of any Certificate issued upon
registration of transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon this Class A Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances and with certain exceptions provided therein, without prior
notice to or the consent of the Holders of any of the Class A Certificates. A
copy of the Agreement may be examined during normal business hours at the
Corporate Trust Office of the Trustee, and at such other places, if any,
designated by the Trustee, by any Certificateholder upon request.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Class A Certificate is registrable in the
Certificate Register upon surrender of this Class A Certificate for
registration of transfer at the office or agency maintained by the Transfer
Agent and Certificate Registrar, in New York, New York, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Transfer Agent and Certificate Registrar duly executed by the Holder hereof,
which signature to such assignment has been guaranteed by a member of the New
York Stock Exchange or a commercial bank or trust company, and thereupon one
or more new Class A Certificates of authorized denominations evidencing the
same aggregate interest in the Trust will be issued to the designated
transferee.
The Class A Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof. As
provided in the Agreement and subject to certain limitations therein set
forth, Class A Certificates are exchangeable for new Certificates of
authorized denominations evidencing the same aggregate denomination, as
requested by the Holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Transfer Agent and
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
Ex A-4
In the event that the Holder of this Class A Certificate does not
surrender this Class A Certificate for cancellation within six months after
the date specified in the notice regarding the pendency of the final
distribution described herein, the Trustee shall give a second notice with
respect thereto. If within one year after such second notice this Class A
Certificate shall not have been surrendered for cancellation, the Trustee may
take appropriate steps to contact the Holder hereof. As provided in the
Agreement, any funds remaining in the Trust after exhaustion of such steps
shall be distributed to the Depositor, such distribution to occur not later
than three years from the date of the final Payment Date.
The Trustee, the Paying Agent and the Transfer Agent and Certificate
Registrar may treat the Person in whose name this Class A Certificate is
registered as the owner hereof for all purposes, and none of the Trustee, the
Paying Agent or the Transfer Agent and Certificate Registrar shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby with respect to the Certificateholders shall terminate
upon the payment to Certificateholders of all amounts required to be paid to
them pursuant to the Agreement on the Payment Date next succeeding the month
which is six months after the maturity or liquidation of the last Receivable
and the disposition of all property held as part of the Trust. The Servicer
may, at its option, purchase the corpus of the Trust at a price specified in
the Agreement, and such purchase of the Receivables and other property of the
Trust will effect early retirement of the Class A Certificates; provided,
however, that such right of purchase is exercisable only as of the last day of
a month immediately preceding any Payment Date as of which the Pool Balance is
equal to or less than [ ]% of the Original Pool Balance.
Ex A-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
--------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name and address,
including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ______________________________ Attorney to
transfer said Certificate on the books of the Transfer Agent and Certificate
Registrar, with full power of substitution in the premises.
Dated:
*
-----------------------------------------
Signature Guaranteed:
*
-----------------------------------------
*NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Certificate in every
particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by a member of the New York Stock
Exchange or a commercial bank or trust company.
EX A-6
EXHIBIT B
FORM OF CLASS B CERTIFICATE
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
USAA AUTO LOAN GRANTOR TRUST ______
___% ASSET BACKED CERTIFICATE, CLASS B
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of simple interest
motor vehicle installment loans, secured by new and used
automobiles and light-duty trucks financed thereby and sold to the
Trustee, as defined below, on behalf of the Trust by USAA
Acceptance, LLC.
(This Certificate is not a deposit account, does not represent an
interest in or obligation of USAA Acceptance, LLC or any of its
respective affiliates and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other person or
governmental authority.)
NUMBER CUSIP _______
R-[ ]
$[ ]
Final Payment Date:
_____________ __, 20__
THIS CERTIFIES THAT __________ is the registered owner of a
nonassessable, fully paid, fractional undivided interest, in the amount set
forth above, in the USAA Auto Loan Grantor Trust ______ (the "Trust") formed
by USAA Acceptance, LLC, a limited liability company (the "Depositor"). The
Trust was created pursuant to a Pooling and Servicing Agreement dated as of __
__, ______ (the "Agreement") among the Depositor, USAA Federal Savings Bank, a
federally chartered savings association (the "Seller"), acting as Depositor
and Servicer, and _________________, as trustee (the trustee and any successor
in interest under the Agreement, the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth
Ex B-1
below. This Class B Certificate is one of the duly authorized Certificates
designated as "___% Asset Backed Certificates, Class B" (herein called the
"Class B Certificates" or the "Certificates"). This Class B Certificate is
issued under and is subject to the terms, provisions, and conditions of the
Agreement, to which Agreement the Holder of this Class B Certificate by virtue
of its acceptance hereof assents and by which such Holder is bound. The
property of the Trust includes a pool of motor vehicle installment loans (the
"Receivables") for the purchase of new and used automobiles and light-duty
trucks financed thereby, all monies due thereunder on or after the Cut-off
Date, security interests in the vehicles securing the Receivables (the
"Financed Vehicles"); such amounts as from time to time may be held in the
Collection Account established and maintained by the Servicer in the name of
the Trustee; benefits under the Reserve Account (described below); an
assignment of the rights of the Depositor to receive proceeds from any claims
on comprehensive and collision, credit life and credit disability insurance
policies covering the Financed Vehicles or the Obligors, as the case may be,
to the extent that such insurance policies relate to the Receivables; and the
rights with respect to any Financed Vehicle that has been repossessed by the
Servicer, on behalf of the Trustee.
Under the Agreement, there will be distributed on the ___th day of each
month or, if such ___th day is not a Business Day, the next succeeding
Business Day (each, a "Payment Date"), commencing on ____________ __, ______,
to the Person in whose name this Class B Certificate is registered at the
close of business on the Record Date, such Certificateholder's fractional
undivided interest in the aggregate amounts allocable to interest principal
that are distributable to the Class B Certificateholders on such Payment Date,
all as more fully described in the Agreement.
Distributions on this Class B Certificate will be made by the Paying
Agent by check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Class B Certificate or
the making of any notation hereon, except that if directed by the Depositor in
the case of Certificates registered in the name of a Clearing Agency,
distributions will be made in the form of immediately available funds. Except
as otherwise provided in the Agreement and notwithstanding the above, the
final distribution on this Class B Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Class B Certificate at the office or agency maintained
for that purpose by the Transfer Agent and Certificate Registrar in New York,
New York.
Reference is hereby made to the further provisions of this Class B
Certificate set forth below, which further provisions shall for all purposes
have the same effect as if set forth at this place.
All capitalized terms used herein and not otherwise defined shall have
the meaning assigned thereto in the Agreement.
Unless the authentication hereon shall have been executed by an authorized
officer of the Trustee or an authenticating agent acting on behalf of the
Trustee, by manual signature, this Class B Certificate shall not entitle the
holder hereof to any benefit under the Agreement or be valid for any purpose.
Ex B-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in its
individual capacity, has caused this Class B Certificate to be duly executed.
USAA AUTO GRANTOR TRUST ______
-----------------,
as Trustee
By:
---------------------------------------
Dated: __ __, ______
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
-----------------,
as Trustee
By:
---------------------------------------
Authorized Signatory
Ex B-3
USAA AUTO LOAN GRANTOR TRUST ______
___% ASSET BACKED CERTIFICATES
The Class B Certificates do not represent an obligation of, or an
interest in, the Depositor, the Seller, the Servicer, the Trustee or any
affiliate of any of them. The Certificates are limited in right of payment to
certain collections and recoveries in respect of the Receivables, all as more
specifically set forth in the Agreement. The Trust will have the benefit of a
Reserve Account. On the Business Day preceding each Payment Date (the "Deposit
Date"), the Trustee, or the Servicer on behalf of the Trustee, shall make a
withdrawal from the Reserve Account in the amount required by the Agreement,
but in no event in an amount greater than the Available Reserve Amount with
respect to such Payment Date.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Seller, the Servicer and
the Trustee with the consent of the Holders of Certificates evidencing not
less than 51% of the Pool Balance. Any such consent by the Holder of this
Class B Certificate shall be conclusive and binding on such Holder and on all
future Holders of this Class B Certificate and of any Certificate issued upon
registration of transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon this Class B Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances and with certain exceptions provided therein, without prior
notice to or the consent of the Holders of any of the Class B Certificates. A
copy of the Agreement may be examined during normal business hours at the
Corporate Trust Office of the Trustee, and at such other places, if any,
designated by the Trustee, by any Certificateholder upon request.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Class B Certificate is registrable in the
Certificate Register upon surrender of this Class B Certificate for
registration of transfer at the office or agency maintained by the Transfer
Agent and Certificate Registrar, in New York, New York, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Transfer Agent and Certificate Registrar duly executed by the Holder hereof,
which signature to such assignment has been guaranteed by a member of the New
York Stock Exchange or a commercial bank or trust company, and thereupon one
or more new Class B Certificates of authorized denominations evidencing the
same aggregate interest in the Trust will be issued to the designated
transferee.
The Class B Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof
(except for a single Certificate in a smaller minimum denomination
representing any residual portion of the Pool Balance on the Cut-off Date). As
provided in the Agreement and subject to certain limitations therein set
forth, Class B Certificates are exchangeable for new Certificates of
authorized denominations evidencing the same aggregate denomination, as
requested by the Holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Transfer Agent and
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
Ex B-4
In the event that the Holder of this Class B Certificate does not
surrender this Class B Certificate for cancellation within six months after
the date specified in the notice regarding the pendency of the final
distribution described herein, the Trustee shall give a second notice with
respect thereto. If within one year after such second notice this Class B
Certificate shall not have been surrendered for cancellation, the Trustee may
take appropriate steps to contact the Holder hereof. As provided in the
Agreement, any funds remaining in the Trust after exhaustion of such steps
shall be distributed to the Depositor, such distribution to occur not later
than three years from the date of the final Payment Date.
The Trustee, the Paying Agent and the Transfer Agent and Certificate
Registrar may treat the Person in whose name this Class B Certificate is
registered as the owner hereof for all purposes, and none of the Trustee, the
Paying Agent or the Transfer Agent and Certificate Registrar shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby with respect to the Certificateholders shall terminate
upon the payment to Certificateholders of all amounts required to be paid to
them pursuant to the Agreement on the Payment Date next succeeding the month
which is six months after the maturity or liquidation of the last Receivable
and the disposition of all property held as part of the Trust. The Servicer
may, at its option, purchase the corpus of the Trust at a price specified in
the Agreement, and such purchase of the Receivables and other property of the
Trust will effect early retirement of the Class B Certificates; provided,
however, that such right of purchase is exercisable only as of the last day of
a month immediately preceding any Payment Date as of which the Pool Balance is
equal to or less than [ ]% of the Original Pool Balance.
Ex B-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
--------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name and address,
including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ____________________________ Attorney to transfer
said Certificate on the books of the Transfer Agent and Certificate Registrar,
with full power of substitution in the premises.
Dated:
*
-----------------------------------------
Signature Guaranteed:
*
-----------------------------------------
*NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every
particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by a member of the New York Stock
Exchange or a commercial bank or trust company.
Ex B-6
EXHIBIT C-1
Trustee's Certificate
pursuant to Section 13.3
of the Pooling and Servicing Agreement
_____________________________________________(the "Trustee") of the USAA
Auto Grantor Trust ______ created pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of ___________ __,
______, among USAA Acceptance, LLC (the "Depositor"), USAA Federal Savings
Bank, as Seller (the "Seller") and Servicer, and the Trustee, does hereby
sell, transfer, assign, and otherwise convey to the Depositor, without
recourse, representation, or warranty, all of the Trustee's right, title, and
interest in and to all of the Receivables (as defined in the Pooling and
Servicing Agreement) identified in the attached Servicer's Certificate as
"Repurchased Receivables," which are to be repurchased by the Depositor
pursuant to Section 5.2 of the Pooling and Servicing Agreement and all
security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
__________, 20__.
-------------------------------
Ex C-1-1
EXHIBIT C-2
Trustee's Certificate
pursuant to Section 13.3
of the Pooling and Servicing Agreement
_____________________________________ (the "Trustee") of the USAA Federal
Savings Grantor Trust ______ created pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of __________ __,
______ among USAA Acceptance, LLC (the "Depositor"), USAA Federal Savings
Bank, as Seller and Servicer (the "Servicer"), and the Trustee, does hereby
sell, transfer, assign, and otherwise convey to the Servicer, without
recourse, representation, or warranty, all of the Trustee's right, title, and
interest in and to all of the Receivables (as defined in the Pooling and
Servicing Agreement) identified in the attached Servicer's Certificate as
"Repurchased Receivables," which are to be purchased by the Servicer pursuant
to Section 6.6 or 14.2 of the Pooling and Servicing Agreement, and all
security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this day ___ of
____________, 20__.
-------------------------------
Ex C-2-1
EXHIBIT D
USAA Auto Loan Grantor Trust ______
___% Asset Backed Certificates, Class A
____% Asset Backed Certificates, Class B
SERVICER'S REPORT
Ex D-1
EXHIBIT E
FORM OF CERTIFICATEHOLDER REPORT
USAA Auto Loan Grantor Trust ______
___% Asset Backed Certificates, Class A
___% Asset Backed Certificates, Class B
On ________, ____, interest earned and principal paid on the underlying assets
for the month of ____________, ____ were paid to you in connection with the
above referenced issue. The following information is being provided pursuant
to Section 7.8 of the Pooling and Servicing Agreement, dated as of __ __,
______. This payment per $1000 of original issuance of your holdings is
allocated as follows:
1) Principal ________
2) Interest ________
Total per each individual certificate ________
3) Yield Supplement Amount ________
4) Fees and compensation paid to Servicer ________
(a) Total ________
(b) Per individual certificate ________
5) The amount deposited into the
Reserve Account ________
6) Aggregate Unreimbursed Advances in
prior month ________
Change From prior month ________
This month ________
7) (a) Pool Balance before this payment ________
(b) Pool Factor before this payment ________
(c) Pool Factor after this payment ________
8) (a) Available Reserve Amount ________
Ex E-1
(b) % of Pool Balance ________
9) Specified Reserve Account Balance ________
10) Aggregate Realized Losses in prior month ________
Ex E-2
EXHIBIT F
FORM OF YIELD SUPPLEMENT AGREEMENT
USAA Auto Grantor Trust ______
c/o _________________, as Trustee
and as Collateral Agent
--------------------------
-------, ------
Ladies and Gentlemen:
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, we (the "Depositor") hereby confirm arrangements made
as of the date hereof with you (the "Trust") to be effective upon receipt by
the Depositor of the enclosed copy of this letter agreement (as amended,
supplemented or otherwise modified and in effect from time to time, the "Yield
Supplement Agreement").
1. On or prior to the Determination Date preceding each Payment Date, the
Servicer shall notify the Trust and the Depositor of the Yield Supplement
Amount for such Payment Date.
2. The Depositor agrees to establish a Yield Supplement Account pursuant
to Article VIII of the Pooling and Servicing Agreement, dated as of _____,
______ (as amended, supplemented or otherwise modified and in effect from time
to time, the "Pooling and Servicing Agreement") by and among the Depositor, in
its individual capacity and as a Servicer thereunder (the "Servicer") and
_________________, as trustee thereunder (the "Trustee"), and the Depositor
hereby agrees, to make a payment of the Yield Supplement Amount to the Trustee
on behalf of the Trust, or to any assignee of the Trustee on behalf of the
Trust referred to in Section 8.1 hereof, prior to 11:00 A.M. on each Payment
Date. If and to the extent that such amounts shall not have been paid by the
Depositor in full at or prior to 11:00 A.M. (New York time), then, in such
event, pursuant to Section 8.2(g) of the Pooling and Servicing Agreement, the
Trustee shall instruct the Collateral Agent to withdraw the amount of any such
insufficiency from the Yield Supplement Account and deposit such funds to the
Collection Account.
3. All payments pursuant hereto shall be made by federal wire transfer
(same day) funds or in immediately available funds, to such account as the
Trustee on behalf of the Trust, may designate in writing to the Depositor
prior to the relevant Payment Date.
4. Our agreements set forth in this Yield Supplement Agreement are our
primary obligations and such obligations are irrevocable, absolute and
unconditional, shall not be subject to any counterclaim, setoff or defense
(other than full and strict compliance by us with our obligations hereunder)
and shall remain in full force and effect without regard to, and shall not be
released, discharged or in any way affected by, any circumstances or condition
whatsoever.
Ex F-1
5. This Yield Supplement Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
6. Except as otherwise provided herein, all demands, notices and
communications under this Yield Supplement Agreement shall be in writing,
personally delivered, sent by telecopier, sent by courier or mailed by
certified mail, return receipt requested, and shall be deemed to have been
duly given upon receipt by the Purchaser or the Depositor. All notices shall
be directed as set forth below, or to such other address or to the attention
of such other person as the relevant party shall have designated for such
purpose in a written notice.
The Trust:
USAA Auto Grantor Trust ______
c/o _________________,
as Trustee
----------------------------------------
----------------------------------------
Attention: Corporate Trust Department
Telecopy: ( )
The Depositor:
USAA Acceptance, LLC
00000 XxXxxxxxx Xxxxxxx
-----------------
Xxx Xxxxxxx, XX 00000
------------------
Attention:
Telecopy: ( )
7. This Yield Supplement Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, all
of which shall be deemed to be one and the same document.
8. Capitalized terms used herein but not otherwise defined shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
Ex F-2
If the foregoing satisfactorily sets forth the terms and conditions of
our agreement, please indicate your acceptance thereof by signing in the space
provided below and returning to us the enclosed duplicate original of this
letter.
Very truly yours,
USAA ACCEPTANCE, LLC
By:
---------------------------------
Name:
Title:
Agreed and accepted as of
the date first above written:
_________________, as
Trustee and as Collateral Agent
By: ------------------------------
Authorized Signatory
Ex F-3
