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EXHIBIT 10.1
REINVESTMENT CONTRACT
AGREEMENT dated as of _____ __, 1999 by and among WESTERN FINANCIAL
BANK, a federally chartered savings association formerly known as Western
Financial Savings Bank, F.S.B. (including its successors and assigns, the
"Bank"), WFS FINANCIAL AUTO LOANS 2, INC., a California corporation (including
its successors and assigns, "WFAL 2"), and BANKERS TRUST COMPANY, not in its
individual capacity but solely in its respective capacities as trustee (the
"Indenture Trustee") and as collateral agent, under the Indenture dated as of
_____ __, 1999 (the "Indenture"), between the Trust and the Indenture Trustee.
R E C I T A L S
WFS Financial 1999-C Owner Trust (the "Trust") created by the Trust
Agreement dated as of _____ __, 1999, as amended and restated as of _____ __,
1999, among WFS Financial Auto Loans, Inc., WFS Investments, Inc., Financial
Security Assurance Inc. (the "Insurer") and Chase Manhattan Bank Delaware has
issued $_________ aggregate principal amount of ____% Auto Receivable Backed
Notes, Class A-1 (the "Class A-1 Notes"), $__________ aggregate principal amount
of ____% Auto Receivable Backed Notes, Class A-2 (the "Class A-2 Notes),
$________ aggregate principal amount of ____% Auto Receivable Backed Notes,
Class A-3 (the "Class A-3 Notes"), and $___________ aggregate principal amount
of ____% Auto Receivable Backed Notes, Class A-4 (the "Class A-4 Notes" and,
collectively with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the "Notes"), and $________ aggregate principal amount of ____% Auto
Receivable Backed Certificates (the "Certificates"). The Contracts will be sold
to the Trust and serviced by the Master Servicer pursuant to the Sale and
Servicing Agreement, dated as of _____ __, 1999 (the "Sale and Servicing
Agreement"), among the Trust, WFS Financial Auto Loans, Inc. and WFS Financial
Inc (the "Master Servicer"). The Indenture Trustee as trustee under the
Indenture desires to assure that the funds deposited in or credited to the
Collection Account, the Note Distribution Account and the Certificate
Distribution Account (collectively, the "Specified Accounts") from time to time
are invested and that funds deposited in or credited to the Holding Account are
held (but not invested) and applied in accordance with the Sale and Servicing
Agreement, and the Indenture Trustee as collateral agent desires to assure that
funds on deposit from time to time in the Spread Account are invested.
A G R E E M E N T S
The parties hereto agree as follows:
Section 1. Investments by the Indenture Trustee. In accordance with, but
subject to, Section 2, the Indenture Trustee shall invest pursuant to this
Agreement with the Bank or WFAL 2 or both, as directed by the Master Servicer,
(i) all funds credited to the Specified Accounts, from time to time, on the
Business Day on which such funds are
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so credited (such funds so invested being herein referred to as the "Specified
Account Invested Funds"), and (ii) all funds credited to the Spread Account,
from time to time, on the Business Day on which such funds are so credited (such
funds so invested being herein referred to as the "Spread Account Invested
Funds"). Each of the Indenture Trustee, WFAL 2 and the Bank agrees that the
aggregate amount of funds that are permitted to be invested hereunder with WFAL
2 that are Specified Account Invested Funds on any day shall not exceed
twenty-five percent (25%) of the aggregate amount of Specified Account Invested
Funds on such day. The Indenture Trustee, in addition, shall deliver to WFAL 2
or the Bank pursuant to this Agreement as directed by the Master Servicer, all
funds in the Holding Account, from time to time, on the Business Day on which
such funds are so credited (such funds so held being herein referred to as the
"Holding Account Deposited Funds"). The Specified Account Invested Funds and the
Spread Account Invested Funds are herein referred to collectively as the
"Invested Funds".
Section 2. Investment of Invested Funds. (a) The Master Servicer will
deposit in the Collection Account upon receipt certain collections on the
Contracts as described in Sections 4.01 and 5.02 of the Sale and Servicing
Agreement and the Indenture Trustee will deposit in the Spread Account, the Note
Distribution Account and the Certificate Distribution Account amounts from time
to time required to be deposited in such Accounts pursuant to Article Five of
the Sale and Servicing Agreement. Subject to paragraphs (b) and (c) below, each
of the Bank and WFAL 2, as the case may be, may invest the Invested Funds
received by it in investments selected by it at its discretion (including,
without limitation, in the case of the Bank, the use of such funds in its
operations, or, in the case of WFAL 2, the use of such funds to purchase
Contracts as permitted by its Articles) so long as this Agreement is an Eligible
Investment. Except as specified in paragraphs (b) and (c) below, it shall not be
necessary for the Bank or WFAL 2 to segregate the Invested Funds or the Holding
Account Deposited Funds deposited with it hereunder. If on any date this
Agreement shall cease to be an Eligible Investment or is terminated, then on
such date and on each date thereafter funds in the Specified Accounts will not
be delivered to and invested by the Bank and/or WFAL 2 but will instead be
invested by the Indenture Trustee in Eligible Investments pursuant to the Sale
and Servicing Agreement, funds in the Holding Account will be maintained in such
Account and will not be deposited with the Bank or WFAL 2 pursuant to this
Agreement and funds in the Spread Account will (in each case) not be invested by
the Bank or WFAL 2 but will instead be invested by the Indenture Trustee as
collateral agent in Eligible Investments pursuant to the Sale and Servicing
Agreement.
(b) If on any date the Insurer, acting in its sole discretion, shall
have notified the Bank and WFAL 2 and the Indenture Trustee (in its capacity as
Indenture Trustee under the Indenture) in writing that the Specified Account
Invested Funds are to be held in a segregated trust account, then on such date
(or, if such date is not a Business Day, the next succeeding Business Day) and
on each day thereafter during the term of this Agreement all Specified Account
Invested Funds shall be held in segregated trust accounts established by the
Indenture Trustee as Eligible Accounts at Bankers Trust Company or at another
depositary institution approved by the Insurer. All Invested Funds held in an
account established pursuant to this paragraph shall be invested in Eligible
Investments, except pursuant to paragraph (a) above, pursuant to instructions by
the Bank or WFAL 2 in its discretion or, in the absence of such instructions by
the Bank or WFAL 2, as the case may be, or if any Event of Default shall have
occurred and is continuing, pursuant to instructions by the Insurer.
(c) If on any date the Insurer, acting in its sole discretion, shall
have notified the Bank and WFAL 2 and the Indenture Trustee (in its capacity as
collateral agent) in writing that the Spread Account Invested Funds are to be
held in a segregated trust account, then on such date
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(or, if such date is not a Business Day, the next succeeding Business Day) and
on each day thereafter during the term of this Agreement all Spread Account
Invested Funds shall be held in a segregated trust account established by the
Indenture Trustee as an Eligible Account at Bankers Trust Company or at another
depositary institution approved by the Insurer. All Invested Funds held in an
account established pursuant to this paragraph shall be invested in Eligible
Investments, except pursuant to paragraph (a) above, pursuant to instructions by
the Master Servicer or, in the absence of such instructions, as otherwise
provided in Section 5.06(c) of the Sale and Servicing Agreement.
(d) If on any date the Insurer, acting in its sole discretion, shall
have notified the Bank and WFAL 2 and the Indenture Trustee (in its capacity as
Indenture Trustee under the Indenture) in writing that the Holding Account
Deposited Funds are to be held in a segregated trust account, then on such date
(or, if such date is not a Business Day, the next succeeding Business Day) and
on each day thereafter during the term of this Agreement all Holding Account
Deposited Funds shall be held in a segregated trust account established by the
Indenture Trustee as an Eligible Account at Bankers Trust Company or at another
depositary institution approved by the Insurer. All Holding Account Deposited
Funds held in an account established pursuant to this paragraph shall not be
invested.
Section 3. Payments by the Bank and WFAL 2. Each of the Bank and WFAL 2
shall be obligated to make payments in accordance with this Section until this
Agreement shall have terminated and all amounts owing by it under this Agreement
shall have been paid by it in full. On the fifth Business Day prior to each
Distribution Date, the Bank and/or WFAL 2, as the case may be, shall deposit,
and each shall cause the other to deposit, its Proportionate Share (as defined
below), if any, of the following amounts in the following accounts: (A) in the
related Specified Account, the portion of the Specified Account Invested Funds
allocable to such Specified Account with respect to such Distribution Date plus
the amount, if any (the "Reinvestment Earnings"), by which the Interest Payment
(as defined below) for such Distribution Date exceeds the sum of (i) the
aggregate amount of interest collected on the Contracts (adjusted with respect
to each Contract to the Pass-Through Rate and exclusive of such collections that
have been paid to the Master Servicer in reimbursement of a previous Advance)
that is part of the Net Collections for such Distribution Date and (ii) the
amount of the interest portion of the Advance for the related Due Period
(assuming for this purpose that an Advance was made in respect of each
delinquent Contract); (B) in the Spread Account, the Spread Account Invested
Funds; and (C) in the Holding Account, the Holding Account Deposited Funds;
provided, however, that if Invested Funds (or Holding Account Deposited Funds,
as the case may be) are held in one or more segregated trust accounts at the
Indenture Trustee or another depositary institution pursuant to paragraph (b),
(c), or (d) of Section 2, then the Indenture Trustee shall, on the fifth
Business Day prior to each Distribution Date, make or cause to be made the
following respective deposits (as paragraphs (b), (c), and (d) of Section 2 are
then applicable, respectively): (A) in each Specified Account, the Specified
Account Invested Funds with respect to such Specified Account and such
Distribution Date plus the net reinvestment income, if any, thereon, (B) in the
Spread Account, the Spread Account Invested Funds plus the net reinvestment
income, if any, thereon, (C) in the Holding Account, the Holding Account
Deposited Funds; provided, further, that solely for purposes of this Agreement
the Interest Payment for the first Distribution Date shall be calculated as
interest for the period from the Cut-Off Date to and including ________, 1999.
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"Interest Payment" means, with respect to any Distribution Date, an
amount equal to the sum of (i) interest at the Class A-1 Interest Rate on the
outstanding principal balance of the Class A-1 Notes as of the immediately
preceding Distribution Date, (ii) interest at the Class A-2 Interest Rate on the
outstanding principal balance of Class A-2 Notes as of the immediately preceding
Distribution Date, (iii) interest at the Class A-3 Interest Rate on the
outstanding principal balance of Class A-3 Notes as of the immediately preceding
Distribution Date, (iv) interest at the Class A-4 Interest Rate on the
outstanding principal balance of the Class A-4 Notes as of the immediately
preceding Distribution Date, and (v) interest at the Pass Through Rate on the
Certificate Balance as of the immediately preceding Distribution Date.
"Proportionate Share" means, with respect to the Specified Account
Invested Funds, the Spread Account Invested Funds or the Holding Account
Deposited Funds, as applicable, and with respect to the Bank or WFAL 2, as
applicable, the amount of Specified Account Invested Funds or Spread Account
Invested Funds invested hereunder or Holding Account Deposited Funds deposited
hereunder, as applicable, either with the Bank or WFAL 2, as applicable, divided
by the total amount of the Specified Account Invested Funds, the Spread Account
Invested Funds or the Holding Account Deposited Funds, as applicable, invested
or deposited hereunder as of the fifth Business Day before a Distribution Date.
Section 4. Timing of Payments. On the fifth Business Day immediately
prior to each Distribution Date (each, a "RIC Maturity Date"), (i) the
investment pursuant to this Agreement of Specified Account Invested Funds with
respect to such Distribution Date and of all Spread Account Invested Funds shall
mature and be due and payable, and the Holding Account Deposited Funds shall be
required to be returned to and deposited into the Holding Account.
Section 5. Manner of Payments. Deposits into any Specified Account by
the Bank and WFAL 2 in accordance with this Agreement shall be made in
immediately available funds to such Specified Account under advice to the
Indenture Trustee at its address set forth in Section 8. Deposits into the
Spread Account by the Bank and WFAL 2 in accordance with this Agreement shall be
made in immediately available funds to the Spread Account under advice to the
Indenture Trustee as collateral agent at its address set forth in Section 8.
Deposits into the Holding Account by the Bank and WFAL 2 in accordance with this
Agreement shall be made in immediately available funds to the Holding Account
under advice to the Indenture Trustee at its address set forth in Section 8.
Section 6. Term of Agreement. This Agreement shall terminate on the
first date on which (i) the Notes and the Certificates shall have been paid in
full as provided in the Sale and Servicing Agreement, (ii) each of the Bank and
WFAL 2 shall have paid the aggregate amount of all Specified Account Invested
Funds and Holding Account Deposited Funds hereunder to the Indenture Trustee and
the aggregate amount of all Class A-1 Spread Account Invested Funds hereunder to
the Indenture Trustee as collateral agent, and (iii) each of the Bank and WFAL 2
shall have paid all other remaining amounts owing by it hereunder; provided that
no termination of this Agreement shall limit or restrict any rights of the
Insurer under the Insurance Agreement to recover Unreimbursed Insurer Amounts in
respect of any claims paid under the Policies in respect of this Agreement. This
Agreement may be terminated by the Bank and WFAL 2, with the prior written
consent of the Insurer, upon written notice to the Insurer and the Indenture
Trustee on any date following receipt by the Bank and WFAL 2 of a notice from
the Insurer pursuant to paragraph (b) of Section 2 hereof; provided that such
termination by the Bank and
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WFAL 2 may occur on any RIC Maturity Date without such consent of the Insurer if
(i) each of the Bank and WFAL 2 shall have made all of the payments referred to
in clauses (ii) and (iii) of the immediately preceding sentence, and (ii) each
of the Bank and WFAL 2 shall have paid the amount of the Proportionate Share of
Reinvestment Earnings and net reinvestment income accrued under Section 3 but
not otherwise owing on such RIC Maturity Date. If on any date this Agreement
shall cease to be an Eligible Investment, then (A) on such date and on each date
thereafter funds in the Specified Accounts and in the Spread Account will be
invested, and funds in the Holding Account will be maintained, in the manner
specified in the last sentence of Section 2(a), (B) on the next succeeding RIC
Maturity Date the Bank and WFAL 2 shall make all of the payments referred to in
clause (ii) of the second preceding sentence (other than Specified Account
Invested Funds, if any, relating to the second Distribution Date immediately
following such RIC Maturity Date) and clause (iii) of the second preceding
sentence, and (C) on the RIC Maturity Date next succeeding the RIC Maturity Date
referred to in clause (B) of this sentence, the Bank and WFAL 2 shall pay the
aggregate amount of any remaining Specified Account Invested Funds hereunder to
the Indenture Trustee and shall pay all remaining amounts owing by the Bank or
WFAL 2 hereunder, including its Proportionate Share of the Reinvestment Earnings
and net reinvestment income accrued under Section 3 for the period ending on
such date, to the Indenture Trustee, as trustee under the Indenture and as
collateral agent, respectively, in the manner specified in Section 5, and upon
the making of all such payments pursuant to clauses (B) and (C) of this sentence
this Agreement shall terminate; provided, that no such termination of this
Agreement shall limit or restrict any rights of the Insurer under the Insurance
Agreement to recover Unreimbursed Insurer Amounts in respect of any claims paid
under the Policies in respect of this Agreement. Notwithstanding that the Notes
have been paid in full, the Indenture Trustee shall continue to perform its
obligations pursuant to this Agreement until the Certificate Balance is reduced
to zero.
Section 7. Representations. (a) Each of the Bank and WFAL 2 hereby makes
the representations and warranties set forth in Section 2 of the Master RIC
Reimbursement Agreement dated as of November 1, 1998 with Financial Security, on
and as of the date hereof as if set forth in full herein.
(b) Each of the Indenture Trustee, solely in its respective capacities
as trustee under the Indenture and as collateral agent and not in its individual
capacity, the Bank and WFAL 2 represent and warrant, each as to itself to the
other, that this Agreement has been duly authorized, executed and delivered and
constitutes a valid and binding agreement and that neither the execution and
delivery of this Agreement by it nor the performance of its obligations under
this Agreement will contravene any federal or state law or any order, decree,
license, permit or the like which is applicable to it or to which it is a party
or by which it is bound.
Section 8. Notices. All notices and other communications given pursuant
to this Agreement shall be communicated to the addresses listed below, in each
case with a copy to Financial Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Surveillance Department, or to such other
address or to the attention of such other person as such party shall have
designated for such purpose in a written notice to the other:
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If to the Indenture Bankers Trust Company
Trustee, as trustee Four Xxxxxx Xxxxxx, 00xx Xxxxx
under the Indenture Xxx Xxxx, Xxx Xxxx 00000
and as collateral Attention: Corporate Trust
agent Department - Asset Backed
Group
If to the Bank: Western Financial Bank
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxx XxXxxx, Esq.
General Counsel
If to WFAL 2: WFS Financial Auto Loans 2, Inc.
00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxx XxXxxx, Esq.
General Counsel
Section 9. Terms. All capitalized terms used herein and not defined
herein shall have the meanings assigned to them in the Sale and Servicing
Agreement or, if not otherwise defined in the Sale and Servicing Agreement, in
the Indenture, as applicable.
Section 10. Amendments. This Agreement may not be amended except with
the prior written consent of the Insurer pursuant to an instrument signed by
each party hereto.
Section 11. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, transferees and assigns; provided that neither the Bank nor WFAL 2
may assign all or any part of this Agreement without the prior written consent
of the Insurer.
Section 12. Governing Law. This Agreement shall be deemed to be a
contract made under, and shall be governed by and construed in accordance with,
the laws of the State of California, except that the duties of the Indenture
Trustee, as trustee under the Indenture and as collateral agent, shall be
governed by the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the day and year first
written above.
WESTERN FINANCIAL BANK
By: ________________________________________
Name:
Title:
WFS FINANCIAL AUTO LOANS 2, INC.
By: ________________________________________
Name:
Title:
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Indenture Trustee under
the Indenture and as collateral agent
By: ________________________________________
Name:
Title:
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ENDORSEMENT NO. 1
FINANCIAL SECURITY 000 Xxxx Xxxxxx
ASSURANCE INC. Xxx Xxxx, Xxx Xxxx 00000
OBLIGOR: WFS Financial 1999-C Owner Trust
OBLIGATIONS: $________ ____% Auto Receivable Backed Notes, Class A-1,
$________ ____% Auto Receivable Backed Notes, Class A-2,
$________ ____% Auto Receivable Backed Notes, Class A-3, and
$________ ____% Auto Receivable Backed Notes, Class A-4
Date of Issuance: _____ __, 1999
Policy No.: ___________
1. Definitions. For all purposes of this Policy, the terms
specified below shall have the meanings or constructions provided below.
Capitalized terms used and not defined herein shall have the respective meanings
ascribed to such terms in the Sale and Servicing Agreement, dated as of _____
__, 1999, by and among the Trust, WFS Financial Auto Loans, Inc., as Seller, and
WFS Financial Inc, as Master Servicer (as amended from time to time in
accordance with its terms, the "Sale and Servicing Agreement") or, if not
defined therein, then in the Indenture, dated as of _____ __, 1999, by and
between the Trust and Bankers Trust Company, unless the context shall otherwise
require.
"Business Day" means any day other than (i) a Saturday or Sunday,
or (ii) a day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to be closed.
"Guaranteed Payments" means, as to each Distribution Date, the
amount equal to the sum of (i) the Guaranteed RIC Payments for such Distribution
Date and (ii) the Scheduled Payments for such Distribution Date less the amount
of any payment under this Policy of the Guaranteed RIC Payments for such
Distribution Date that is required to be applied pursuant to the Sale and
Servicing Agreement to pay such Scheduled Payments; provided, however, that the
aggregate amount of payments guaranteed to be paid under this Policy shall not
exceed the Outstanding Amount of the Notes plus all interest thereon.
"Guaranteed RIC Payments" means (i) with respect to the first
Distribution Date to occur during any period in which Financial Security's
claims-paying ability is not rated Aa2 or higher by Moody's and AAA by Standard
& Poor's and amounts in the Collection Account, Note Distribution Account,
Certificate Distribution Account and the Spread Account shall have been invested
in the RIC pursuant to Section 2(a) thereof, an amount equal to the RIC Payment
Amount for such Distribution Date, (ii) with respect to the second Distribution
Date to occur during any period in which Financial Security's claims-paying
ability is not rated Aa2 or higher
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by Moody's and AAA by Standard & Poor's and amounts in the Collection Account in
respect of such second Distribution Date shall have been invested in the RIC
pursuant to Section 2(a) thereof, an amount equal to the Supplemental RIC
Payment Amount for such second Distribution Date, and (iii) with respect to any
other date, zero; provided, however, that with respect to clauses (i) and (ii)
above, the amount payable in respect of the Guaranteed RIC Payments under this
Policy on any Distribution Date shall not exceed the Scheduled Payments for such
Distribution Date.
"Indenture Trustee" means Bankers Trust Company, as trustee under
the Indenture, and any successor in such capacity.
"Policy" means this Financial Guaranty Insurance Policy and
includes each endorsement thereto.
"Receipt" and "Received" mean actual delivery to Financial
Security and to the Fiscal Agent (as defined below), if any, prior to 12:00
noon, New York City time, on a Business Day; delivery either on a day that is
not a Business Day, or after 12:00 noon, New York City time, shall be deemed to
be receipt on the next succeeding Business Day. If any notice or certificate
given hereunder by the Indenture Trustee is not in proper form or is not
properly completed, executed or delivered, it shall be deemed not to have been
Received, and Financial Security or its Fiscal Agent shall promptly so notify
the Indenture Trustee and the Indenture Trustee may submit an amended notice.
"RIC" means the Reinvestment Contract, dated as of _____ __,
1999, among Western Financial Bank, WFS Financial Auto Loans 2, Inc. and the
Indenture Trustee, as in effect on the date of this Policy and without regard to
any amendment or modification of the RIC except amendments or modifications to
which Financial Security has given its prior written consent.
"RIC Payment Amount" means, as to any Distribution Date, certain
obligations due and owing under the RIC for such Distribution Date in an amount
equal to the sum of (A) the Spread Account Invested Funds (as defined in the
RIC) plus the Holding Account Deposited Funds (as defined in the RIC) and (B)
the amount that is equal to the lesser of (a) the Specified Account Invested
Funds (as defined in the RIC) and (b) the amount by which (i) the sum of (x) the
aggregate amount due and owing on such Distribution Date to the Holders of the
Notes and the Certificates, (y) the amount (if any) required to be deposited out
of Excess Amounts into the Spread Account on such Distribution Date (after
giving effect to distributions and other payments required to have been made on
such date prior to such required deposit and assuming that the Spread Account
Invested Funds were available in the Spread Account for such date), and (z) the
amount of Servicing Fee due and owing to the Master Servicer on such date
exceeds (ii) the Net Collections for such Distribution Date that are otherwise
on deposit in the Collection Account and available for payment of the amounts
referred to in clause (i) above pursuant to the Sale and Servicing Agreement.
"Scheduled Payments" means, as to each Distribution Date, the
payment to be made to Holders in accordance with the original terms of the
Obligations when issued and without regard to any subsequent amendment or
modification of the Obligations or of the Indenture, except amendments or
modifications to which Financial Security has given its prior written consent,
in an amount equal to (i) the Note Interest Distributable Amount and (ii) the
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Note Principal Distributable Amount. Scheduled Payments do not include payments
which become due on an accelerated basis as a result of (a) a default by the
Obligor, (b) any election to pay principal on an accelerated basis, (c) the
occurrence of an Event of Default under the Indenture or (d) any other cause,
unless Financial Security elects, in its sole discretion, to pay in whole or in
part such principal due upon acceleration, together with any accrued interest to
the date of acceleration. In the event Financial Security does not so elect,
this Policy will continue to guarantee payment on the Notes in accordance with
their original terms. Scheduled Payments shall not include any portion of a Note
Interest Distributable Amount due to Noteholders because a notice and
certificate in proper form as required by paragraph 2 hereof was not timely
Received by Financial Security, unless, in each case, Financial Security elects,
in its sole discretion, to pay such amount in whole or in part. Scheduled
Payments shall not include any amounts due in respect of the Obligations
attributable to any increase in Interest Rate, penalty or other sum payable by
the Obligor by reason of any default or event of default in respect of the
Obligations, or by reason of any deterioration of the credit worthiness of the
Obligor, nor shall Scheduled Payments include, nor shall coverage be provided
under this Policy in respect of, any taxes, withholding or other charge with
respect to any Holder imposed by any governmental authority due in connection
with the payment of any Scheduled Payment to a Holder. Notwithstanding the
foregoing, the term "Scheduled Payments" that appears on the face of the Policy
(and only on the face of the Policy) shall mean "Guaranteed Payments" as such
term is defined in this Endorsement No. 1 to the Policy.
"Supplemental RIC Payment Amount" means, as to the first
Distribution Date following the Distribution Date (if any) on which the
Guaranteed RIC Payment shall have been equal to the RIC Payment Amount, the
amount that is equal to the lesser of (A) the amount of remaining Specified
Account Invested Funds (if any) that is required to be a part of the Net
Collections for such Distribution Date and (B) the amount (if any) by which (i)
the sum of (x) the aggregate amount due and owing on such Distribution Date to
Holders of the Notes and the Certificates plus (y) the amount (if any) required
to be deposited out of Excess Amounts into the Spread Account on such
Distribution Date (after giving effect to distributions and other payments
required to have been made on such date prior to such required deposit) exceeds
(ii) the Net Collections for such Distribution Date that are otherwise on
deposit in the Collection Account and available for payment of the amounts
referred to in clause (i) above pursuant to the Sale and Servicing Agreement.
"Term of this Policy" means the period from and including the
Closing Date to and including the date on which (i) all Scheduled Payments have
been paid that are required to be paid by the Obligor within the meaning of
Section 4.01 of the Indenture, (ii) any period during which any Scheduled
Payment could have been voided in whole or in part as a preference payment under
applicable bankruptcy, insolvency, receivership or similar law has expired, and
(iii) if any proceedings requisite to voidance as a preference payment have been
commenced prior to the occurrence of (i) and (ii), a final and nonappealable
order in resolution of each such proceeding has been entered.
2. Notices and Conditions to Payment in Respect of Guaranteed
Payments. Following Receipt by Financial Security of a notice and certificate
from the Trustee in the form attached as Exhibit A to this Endorsement,
Financial Security will pay any amount payable hereunder in respect of
Guaranteed Payments out of the funds of Financial Security on the later to occur
of (a) 12:00 noon, New York City time, on the fourth Business Day following
Receipt
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of such notice and certificate and (b) 12:00 noon, New York City time, on the
Distribution Date to which such claim relates. Payments due hereunder, in
respect of Guaranteed Payments, will be disbursed by wire transfer of
immediately available funds to the Indenture Trustee.
Financial Security shall be entitled to pay any amount hereunder
in respect of Guaranteed Payments, including any acceleration payment, whether
or not any notice and certificate shall have been Received by Financial Security
as provided above; provided, however, that by acceptance of this Policy the
Indenture Trustee agrees to provide upon request to Financial Security a notice
and certificate in respect of any such payments made by Financial Security.
Financial Security's obligations hereunder in respect of Guaranteed Payments
shall be discharged to the extent funds are disbursed by Financial Security as
provided herein, whether or not such funds are properly applied by the Indenture
Trustee.
3. Notices and Conditions to Payment in Respect of Guaranteed
Payments Avoided as Preference Payments. If any Guaranteed Payments is avoided
as a preference payment under applicable bankruptcy, insolvency, receivership or
similar law, Financial Security will pay such amount out of the funds of
Financial Security on the later of (a) the date when due to be paid pursuant to
the Order referred to below or (b) the first to occur of (A) the fourth Business
Day following Receipt by Financial Security from the Indenture Trustee of (a) a
certified copy of the order of the court or other governmental body which
exercised jurisdiction to the effect that (i) the Holder is required to return
payments of principal of or interest paid on the Obligations or (ii) the
Indenture Trustee is required to return payments of the RIC Payment Amount or
the Supplemental RIC Payment Amount paid under the RIC, during (in each case)
the Term of this Policy because such distributions or payments were avoidable as
preference payments under applicable bankruptcy law (the "Order"), (b) a
certificate of the Holder (or, in the case of the RIC, of the Indenture Trustee)
that the Order has been entered and is not subject to any stay and (c) an
assignment duly executed and delivered by the Holder (or, in the case of the
RIC, by the Indenture Trustee), in such form as is reasonably required by
Financial Security and provided by Financial Security (i) to the Holder
irrevocably assigning to Financial Security all rights and claims of the Holder
relating to or arising under the Obligations or (ii) to the Indenture Trustee
irrevocably assigning to Financial Security all rights and claims of the
Indenture Trustee relating to or arising under the RIC, to the extent of the RIC
Payment Amount and the Supplemental RIC Payment Amount, as the case may be, in
each case (as to clauses (i) and (ii)) against the debtor which made such
preference payment or otherwise with respect to such preference payment or (B)
the date of Receipt by Financial Security from the Indenture Trustee of the
items referred to in clauses (a), (b) and (c) above if, at least four Business
Days prior to such date of Receipt, Financial Security shall have Received
written notice from the Indenture Trustee that such items were to be delivered
on such date and such date was specified in such notice. Such payment shall be
disbursed to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the Order, and not to the Indenture Trustee or any Holder
directly (unless a Holder (or, in the case of the RIC, the Indenture Trustee)
has previously paid such amount to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order, in which case
such payment shall be disbursed to the Indenture Trustee for distribution to
such Holder (or, in the case of the RIC, for application in accordance with the
Sale and Servicing Agreement) upon proof of such payment reasonably satisfactory
to Financial Security). In connection with the foregoing, Financial Security
shall have the rights provided pursuant to Section 5.19 of the Indenture.
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4. Governing Law. This Policy shall be governed by, and shall be
construed in accordance with, the laws of the State of New York, without giving
effect to the conflict of laws principles thereof.
5. Fiscal Agent. At any time during the Term of this Policy,
Financial Security may appoint a fiscal agent (the "Fiscal Agent") for purposes
of this Policy by written notice to the Indenture Trustee at the notice address
specified in the Sale and Servicing Agreement specifying the name and notice
address of the Fiscal Agent. From and after the date of receipt of such notice
by the Indenture Trustee, (i) copies of all notices and documents required to be
delivered to Financial Security pursuant to this Policy shall be simultaneously
delivered to the Fiscal Agent and to Financial Security and shall not be deemed
Received until Received by both and (ii) all payments required to be made by
Financial Security under this Policy may be made directly by Financial Security
or by the Fiscal Agent on behalf of Financial Security. The Fiscal Agent is the
agent of Financial Security only and the Fiscal Agent shall in no event be
liable to any Holder for any acts of the Fiscal Agent or any failure of
Financial Security to deposit, or cause to be deposited, sufficient funds to
make payments when due under this Policy.
6. Waiver of Defenses. To the fullest extent permitted by
applicable law, Financial Security agrees not to assert, and hereby waives, for
the benefit of each Holder, all rights (whether by counterclaim, set-off or
otherwise) and defenses (including, without limitation, the defense of fraud),
whether acquired by subrogation, assignment or otherwise, to the extent that
such rights and defenses may be available to Financial Security to avoid payment
of its obligations under this Policy in accordance with the express provisions
of this Policy.
7. Notices. All notices to be given hereunder shall be in writing
(except as otherwise specifically provided herein) and shall be mailed by
registered mail or personally delivered or telecopied to Financial Security as
follows:
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Senior Vice President - Surveillance
Telecopy No.: (000) 000-0000
Confirmation: (000) 000-0000
Financial Security may specify a different address or addresses
by writing mailed or delivered to the Trustee.
8. Priorities. In the event that any term or provision of the
face of this Policy is inconsistent with the provisions of this Endorsement, the
provisions of this Endorsement shall take precedence and shall be binding.
9. Exclusions from Insurance Guaranty Funds. This Policy is not
covered by the Property/Casualty Insurance Security Fund specified in Article 76
of the New York Insurance Law. This Policy is not covered by the Florida
Insurance Guaranty Association created under Part II of Chapter 631 of the
Florida Insurance Code. In the event that Financial Security were to become
insolvent, any claims arising under this Policy are excluded from
5
13
coverage by the California Insurance Guaranty Association, established pursuant
to Article 14.2 of Chapter 1 of Part 2 of Division 1 of the California Insurance
Code.
10. Surrender of Policy. The Indenture Trustee shall, upon
request, surrender this Policy to Financial Security for cancellation upon
expiration of the Term of this Policy.
IN WITNESS WHEREOF, FINANCIAL SECURITY ASSURANCE INC. has caused
this Endorsement No. 1 to be executed by its Authorized Officer.
FINANCIAL SECURITY ASSURANCE INC.
By__________________________________________
Authorized Officer
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EXHIBIT A
CERTIFICATE OF CLAIM
(Letterhead of Trustee)
Dated:_____________________
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Senior Vice President
Re: WFS Financial 1999-C Owner Trust
The undersigned, a duly authorized officer of Bankers Trust
Company (the "Indenture Trustee"), hereby certifies to Financial Security
Assurance Inc. ("Financial Security"), with reference to Financial Guaranty
Insurance Policy No. ________ dated _____ __,1999 (the "Policy") issued by
Financial Security in respect of the $_________ ___% Auto Receivable Backed
Notes, Class A-1, $___________ ___% Auto Receivable Backed Notes, Class A-2,
$__________ ___% Auto Receivable Backed Notes, Class A-3, and $__________ ____%
Auto Receivable Backed Notes, Class A-4 (collectively, the "Obligations") that:
(i) The Indenture Trustee is the Indenture Trustee under the
Indenture for the Holders.
(ii) the sum of all amounts on deposit (or scheduled to be on
deposit) in the Collection Account and Spread Account and available for
application in accordance with the Sale and Servicing Agreement will be
$_________ (the "RIC Shortfall") less than the Guaranteed RIC Payment.
Of such RIC Shortfall, $__________ is attributable to the Guaranteed RIC
Payment amount to be paid to the Indenture Trustee for deposit into the
Collection Account and $__________ is attributable to Guaranteed RIC
Payment amount to be paid to the Indenture Trustee as collateral agent
for deposit into the Spread Account.
(iii) The sum of all amounts on deposit (or scheduled to be on
deposit) in the Note Distribution Account and available for distribution
to the Holders pursuant to the Indenture will be $__________ (the "Note
Shortfall") less than the aggregate amount of Scheduled Payments with
respect to [DISTRIBUTION DATE]. Of such Note Shortfall, $__________ is
attributable to Scheduled Payments to be made to Holders of the
Obligations.
(iv) The Indenture Trustee is making a claim under the Policy
[(i) for the RIC Shortfall to be applied to payment of the Guaranteed
RIC Payment and (ii)] for the Note Shortfall to be applied to
distributions of principal or interest or both with respect to the
Obligations.
(v) The Indenture Trustee agrees that, following receipt of
funds from Financial Security, it shall (a) hold such amounts in trust
and apply the same directly to
15
the payment of Guaranteed Payments; (b) not apply such funds for any
other purpose; (c) not commingle such funds with other funds held by the
Indenture Trustee; and (d) maintain an accurate record of such payments
with respect to each Obligation and with respect to the RIC and the
corresponding claim on the Policy and proceeds thereof and, if the
Obligation is required to be surrendered or presented for such payment,
shall stamp on each such Obligation the legend $"[insert applicable
amount] paid by Financial Security and the balance hereof has been
cancelled and reissued" and then shall deliver such Obligation to
Financial Security.
(vi) The Indenture Trustee, on behalf of the Holders, hereby
assigns to Financial Security the rights of the Holders with respect to
the Obligations to the extent of any payments under the Policy,
including, without limitation, any amounts due to the Holders in respect
of securities law violations arising from the offer and sale of the
Obligations and any amounts due and owing but unpaid under the RIC. The
foregoing assignment is in addition to, and not in limitation of, rights
of subrogation otherwise available to Financial Security in respect of
such payments. Payments to Financial Security in respect of the
foregoing assignment shall in all cases be subject to and subordinate to
the rights of the Holders to receive all Guaranteed Payments in respect
of the Obligations. The Indenture Trustee shall take such action and
deliver such instruments as may be reasonably requested or required by
Financial Security to effectuate the purpose or provisions of this
clause (vi).
(vii) The Indenture Trustee, on its behalf and on behalf of
the Holders, hereby appoints Financial Security as agent and
attorney-in-fact for the Indenture Trustee and each such Holder in any
legal proceeding with respect to the Obligations. The Indenture Trustee
hereby agrees that Financial Security may at any time during the
continuation of any proceeding by or against any debtor with respect to
which a preference claim (as defined below) or other claim with respect
to the Obligations or the RIC is being asserted under the United States
Bankruptcy Code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding")
direct all matters relating to such Insolvency Proceeding, including
without limitation, (A) all matters relating to any claim in connection
with an Insolvency Proceeding seeking the avoidance as a preferential
transfer of any payment made with respect to the Obligations or the RIC
(a "Preference Claim"), (B) the direction of any appeal of any order
relating to any Preference Claim at the expense of Financial Security
but subject to reimbursement as provided in the Insurance Agreement and
(C) the posting of any surety, supersedeas or performance bond pending
any such appeal. In addition, the Indenture Trustee hereby agrees that
Financial Security shall be subrogated to, and the Indenture Trustee on
its behalf and on behalf of each Holder, hereby delegates and assigns,
to the fullest extent permitted by law, the rights of the Indenture
Trustee and each Holder in the conduct of any Insolvency Proceeding,
including, without limitation, all rights of any party to an adversary
proceeding or action with respect to any court order issued in
connection with any such Insolvency Proceeding.
(viii) Payment should be made by wire transfer directed to
[SPECIFY ACCOUNT].
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Unless the context otherwise requires, any capitalized term used
in this Certificate of Claim shall have the meaning assigned thereto in the
Policy, including in the Endorsement thereto.
IN WITNESS WHEREOF, the Indenture Trustee has executed and
delivered this Certificate of Claim as of the ____ day of __________, 19___.
_______________________________________
not in its individual capacity
but solely as Indenture Trustee
By: ___________________________________
Name:
Title:
--------------------------------------------------------------------------------
For Financial Security Assurance Inc. or Fiscal Agent use only. Wire transfer
sent on ____________________ by ____________________ Confirmation Number ______.
3
17
ENDORSEMENT NO. 1
FINANCIAL SECURITY 000 Xxxx Xxxxxx
ASSURANCE INC. Xxx Xxxx, Xxx Xxxx 00000
TRUST: WFS Financial 1999-C Owner Trust
CERTIFICATES: $________ ___% Auto Receivable Backed Certificates
Date of Issuance: _________ __, 1999
Policy No.: __________________
1. Definitions. For all purposes of this Policy, the terms
specified below shall have the meanings or constructions provided below.
Capitalized terms used and not defined herein shall have the respective meanings
ascribed to such terms in the Sale and Servicing Agreement, dated as of _____
__, 1999, by and among the Trust, WFS Financial Auto Loans, Inc., as Seller, and
WFS Financial Inc, as Master Servicer (as may be amended from time to time in
accordance with its terms, the "Sale and Servicing Agreement"), unless the
context shall otherwise require.
"Business Day" means any day other than (i) a Saturday or Sunday,
or (ii) a day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to be closed.
"Guaranteed Certificate Distributions" means, as to each
Distribution Date, the distribution to be made to Holders of the Certificates in
an amount equal to the Certificate Distributable Amount due and payable on such
Distribution Date in accordance with the original terms of the Certificates when
issued and without regard to any amendment or modification of the Certificates,
the Sale and Servicing Agreement or the Trust Agreement except amendments or
modifications to which Financial Security has given its prior written consent.
Guaranteed Certificate Distributions shall not include, nor shall coverage be
provided under the Policy in respect of any taxes, withholding or other charges
imposed with respect to any Certificateholder by any governmental entity, or any
payments with respect to the Certificates owned by WII.
"Guaranteed Distributions" means, as to each Distribution Date,
the amount equal to the sum of (i) the Guaranteed RIC Payments for such
Distribution Date and (ii) the Guaranteed Certificate Distribution for such
Distribution Date less the amount of any payment under this Policy of the
Guaranteed RIC Payments for such Distribution Date that is required to be
applied pursuant to the Sale and Servicing Agreement to pay such Guaranteed
Certificate Distribution; provided, however, that the aggregate amount of
payments guaranteed to be paid under this Policy shall not exceed the
Certificate Balance plus all interest thereon.
"Guaranteed RIC Payments" means (i) with respect to the first
Distribution Date to occur during any period in which Financial Security's
claims-paying ability is not rated Aa2
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or higher by Moody's and AAA by Standard & Poor's and amounts in the Collection
Account, the Note Distribution Account, the Certificate Distribution Account and
the Spread Account shall have been invested in the RIC pursuant to Section 2(a)
thereof, an amount equal to the RIC Payment Amount for such Distribution Date,
(ii) with respect to the second Distribution Date to occur during any period in
which Financial Security's claims-paying ability is not rated Aa2 or higher by
Moody's and AAA by Standard & Poor's and amounts in the Collection Account in
respect of such second Distribution Date shall have been invested in the RIC
pursuant to Section 2(a) thereof, an amount equal to the Supplemental RIC
Payment Amount for such second Distribution Date, and (iii) with respect to any
other date, zero; provided, however, that with respect to clauses (i) and (ii)
above the amount payable in respect of the Guaranteed RIC Payments under this
Policy on any Distribution Date shall not exceed the Guaranteed Certificate
Distribution for such Distribution Date.
"Policy" means this Financial Guaranty Insurance Policy and
includes each endorsement thereto.
"Receipt" and "Received" mean actual delivery to Financial
Security and to the Fiscal Agent (as defined below), if any, prior to 12:00
noon, New York City time, on a Business Day; delivery either on a day that is
not a Business Day, or after 12:00 noon, New York City time, shall be deemed to
be receipt on the next succeeding Business Day. If any notice or certificate
given hereunder by the Owner Trustee is not in proper form or is not properly
completed, executed or delivered, it shall be deemed not to have been Received,
and Financial Security or its Fiscal Agent shall promptly so notify the Trustee
and the Trustee may submit an amended notice.
"RIC" means the Reinvestment Contract, dated as of _____ __,
1999, among Western Financial Bank, WFS Financial Auto Loans 2, Inc. and the
Trustee, as in effect on the date of this Policy and without regard to any
amendment or modification of the RIC except amendments or modifications to which
Financial Security has given its prior written consent.
"RIC Payment Amount" means, as to any Distribution Date, certain
obligations due and owing under the RIC for such Distribution Date in an amount
equal to the sum of (A) the Spread Account Invested Funds (as defined in the
RIC) plus the Holding Account Deposited Funds (as defined in the RIC) and (B)
the amount that is equal to the lesser of (a) the Specified Account Invested
Funds (as defined in the RIC) and (b) the amount by which (i) the sum of (x) the
aggregate amount due and owing on such Distribution Date to the Holders of the
Notes and the Certificates, (y) the amount (if any) required to be deposited out
of Excess Amounts into the Spread Account on such Distribution Date (after
giving effect to distributions and other payments required to have been made on
such date prior to such required deposit and assuming that the Spread Account
Invested Funds were available in the Spread Account for such date), and (z) the
amount of Servicing Fee due and owing to the Master Servicer on such date
exceeds (ii) the Net Collections for such Distribution Date that are otherwise
on deposit in the Collection Account and available for payment of the amounts
referred to in clause (i) above pursuant to the Sale and Servicing Agreement.
"Supplemental RIC Payment Amount" means, as to the first
Distribution Date following the Distribution Date (if any) on which the
Guaranteed RIC Payment shall have been equal to the RIC Payment Amount, the
amount that is equal to the lesser of (A) the amount of remaining Specified
Account Invested Funds (if any) that is required to be a part of the Net
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19
Collections for such Distribution Date and (B) the amount (if any) by which (i)
the sum of (x) the aggregate amount due and owing on such Distribution Date to
Holders of the Notes and the Certificates plus (y) the amount (if any) required
to be deposited out of Excess Amounts into the Spread Account on such
Distribution Date (after giving effect to distributions and other payments
required to have been made on such date prior to such required deposit) exceeds
(ii) the Net Collections for such Distribution Date that are otherwise on
deposit in the Collection Account and available for payment of the amounts
referred to in clause (i) above pursuant to the Sale and Servicing Agreement.
"Term of this Policy" means the period from and including the
Closing Date to and including the date on which (i) the Certificate Balance has
been reduced to zero and all Certificate Interest Distributable Amounts and all
Certificate Principal Distributable Amounts have been paid on the Certificates,
(ii) any period during which any payment on the Certificates could have been
voided in whole or in part as a preference payment under applicable bankruptcy,
insolvency, receivership or similar law has expired, and (iii) if any
proceedings requisite to voidance as a preference payment have been commenced
prior to the occurrence of (i) and (ii), a final and nonappealable order in
resolution of each such proceeding has been entered.
"Owner Trustee" means Chase Manhattan Bank Delaware, as owner
trustee for the Certificateholders under the Trust Agreement, and any successor
in such capacity.
2. Notices and Conditions to Payment in Respect of Guaranteed
Distributions. Following Receipt by Financial Security of a notice and
certificate from the Owner Trustee in the form attached as Exhibit A to this
Endorsement, Financial Security will pay any amount payable hereunder in respect
of Guaranteed Distributions out of the funds of Financial Security on the later
to occur of (a) 12:00 noon, New York City time, on the fourth Business Day
following Receipt of such notice and certificate and (b) 12:00 noon, New York
City time, on the Distribution Date to which such claim relates. Payments due
hereunder, in respect of Guaranteed Distributions, will be disbursed by wire
transfer of immediately available funds to the Owner Trustee.
Financial Security shall be entitled to pay any amount hereunder
in respect of Guaranteed Distributions, including any acceleration payment,
whether or not any notice and certificate shall have been Received by Financial
Security as provided above; provided, however, that by acceptance of this policy
the Owner Trustee agrees to provide upon request to Financial Security a notice
and certificate in respect of any such payments made by Financial Security.
Financial Security's obligations hereunder in respect of Guaranteed
Distributions shall be discharged to the extent funds are disbursed by Financial
Security as provided herein, whether or not such funds are properly applied by
the Owner Trustee.
3. Notices and Conditions to Payment in Respect of Guaranteed
Distributions Avoided as Preference Payments. If any Guaranteed Distribution is
avoided as a preference payment under applicable bankruptcy, insolvency,
receivership or similar law, Financial Security will pay such amount out of the
funds of Financial Security on the later of (a) the date when due to be paid
pursuant to the Order referred to below or (b) the first to occur of (A) the
fourth Business Day following Receipt by Financial Security from the Owner
Trustee of (a) a certified copy of the order of the court or other governmental
body which exercised jurisdiction to the effect that (i) the Holder is required
to return payments of the Certificate Interest Distributable Amount and the
Certificate Principal Distributable Amount distributed
3
20
with respect to the Certificates or (ii) the Owner Trustee is required to return
payments of the RIC Payment Amount or the Supplemental RIC Payment Amount paid
under the RIC, during (in each case) the Term of this Policy because such
distributions or payments were avoidable as preference payments under applicable
bankruptcy law (the "Order"), (b) a certificate of the Holder (or, in the case
of the RIC, of the Owner Trustee) that the Order has been entered and is not
subject to any stay and (c) an assignment duly executed and delivered by the
Holder (or, in the case of the RIC, by the Owner Trustee), in such form as is
reasonably required by Financial Security and provided by Financial Security (i)
to the Holder irrevocably assigning to Financial Security all rights and claims
of the Holder relating to or arising under the Certificates or (ii) to the Owner
Trustee irrevocably assigning to Financial Security all rights and claims of the
Owner Trustee relating to or arising under the RIC, to the extent of the RIC
Payment Amount and the Supplemental RIC Payment Amount, as the case may be, in
each case (as to clauses (i) and (ii)) against the debtor which made such
preference payment or otherwise with respect to such preference payment or (B)
the date of Receipt by Financial Security from the Owner Trustee of the items
referred to in clauses (a), (b) and (c) above if, at least four Business Days
prior to such date of Receipt, Financial Security shall have Received written
notice from the Owner Trustee that such items were to be delivered on such date
and such date was specified in such notice. Such payment shall be disbursed to
the receiver, conservator, debtor-in-possession or trustee in bankruptcy named
in the Order, and not to the Owner Trustee or any Holder directly (unless a
Holder (or, in the case of the RIC, the Owner Trustee) has previously paid such
amount to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the Order, in which case such payment shall be disbursed to
the Owner Trustee for distribution to such Holder (or, in the case of the RIC,
for application in accordance with the Sale and Servicing Agreement) upon proof
of such payment reasonably satisfactory to Financial Security). In connection
with the foregoing, Financial Security shall have the rights provided pursuant
to Section 8.06 of the Sale and Servicing Agreement.
4. Governing Law. This Policy shall be governed by, and shall be
construed in accordance with, the laws of the State of New York, without giving
effect to the conflict of laws principles thereof.
5. Fiscal Agent. At any time during the Term of this Policy,
Financial Security may appoint a fiscal agent (the "Fiscal Agent") for purposes
of this Policy by written notice to the Owner Trustee at the notice address
specified in the Sale and Servicing Agreement specifying the name and notice
address of the Fiscal Agent. From and after the date of receipt of such notice
by the Owner Trustee, (i) copies of all notices and documents required to be
delivered to Financial Security pursuant to this Policy shall be simultaneously
delivered to the Fiscal Agent and to Financial Security and shall not be deemed
Received until Received by both and (ii) all payments required to be made by
Financial Security under this Policy may be made directly by Financial Security
or by the Fiscal Agent on behalf of Financial Security. The Fiscal Agent is the
agent of Financial Security only and the Fiscal Agent shall in no event be
liable to any Holder for any acts of the Fiscal Agent or any failure of
Financial Security to deposit, or cause to be deposited, sufficient funds to
make payments when due under this Policy.
6. Waiver of Defenses. To the fullest extent permitted by
applicable law, Financial Security agrees not to assert, and hereby waives, for
the benefit of each Holder, all rights (whether by counterclaim, set-off or
otherwise) and defenses (including, without limitation, the defense of fraud),
whether acquired by subrogation, assignment or otherwise, to
4
21
the extent that such rights and defenses may be available to Financial Security
to avoid payment of its obligations under this Policy in accordance with the
express provisions of this Policy.
7. Notices. All notices to be given hereunder shall be in writing
(except as otherwise specifically provided herein) and shall be mailed by
registered mail or personally delivered or telecopied to Financial Security as
follows:
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Senior Vice President - Surveillance
Telecopy No.: (000) 000-0000
Confirmation: (000) 000-0000
Financial Security may specify a different address or addresses
by writing mailed or delivered to the Trustee.
8. Priorities. In the event that any term or provision of the
face of this Policy is inconsistent with the provisions of this Endorsement, the
provisions of this Endorsement shall take precedence and shall be binding.
9. Exclusions from Insurance Guaranty Funds. This Policy is not
covered by the Property/Casualty Insurance Security Fund specified in Article 76
of the New York Insurance Law. This Policy is not covered by the Florida
Insurance Guaranty Association created under Part II of Chapter 631 of the
Florida Insurance Code. In the event that Financial Security were to become
insolvent, any claims arising under this Policy are excluded from coverage by
the California Insurance Guaranty Association, established pursuant to Article
14.2 of Chapter 1 of Part 2 of Division 1 of the California Insurance Code.
10. Surrender of Policy. The Owner Trustee shall, upon request,
surrender this Policy to Financial Security for cancellation upon expiration of
the Term of this Policy.
IN WITNESS WHEREOF, FINANCIAL SECURITY ASSURANCE INC. has caused
this Endorsement No. 1 to be executed by its Authorized Officer.
FINANCIAL SECURITY ASSURANCE INC.
By _____________________________________
Authorized Officer
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EXHIBIT A
CERTIFICATE OF CLAIM
(Letterhead of Trustee)
Dated: __________________
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Senior Vice President
Re: WFS Financial 1999-C Owner Trust
The undersigned, a duly authorized officer of Chase Manhattan
Bank Delaware (the "Owner Trustee"), hereby certifies to Financial Security
Assurance Inc. ("Financial Security"), with reference to Financial Guaranty
Insurance Policy No. _______ dated _____ __, 1999 (the "Policy") issued by
Financial Security in respect of the $________ __% Auto Receivable Backed
Certificates (the "Certificates") that:
(i) The Owner Trustee is the Owner Trustee under the Trust
Agreement for the Holders.
(ii) the sum of all amounts on deposit (or scheduled to be on
deposit) in the Collection Account and Spread Account and available for
application in accordance with the Sale and Servicing Agreement will be
$_________ (the "RIC Shortfall") less than the Guaranteed RIC Payment.
Of such RIC Shortfall, $__________ is attributable to the Guaranteed RIC
Payment amount to be paid to the Owner Trustee for deposit into the
Collection Account and $__________ is attributable to the Guaranteed RIC
Payment amount to be paid to the Owner Trustee as collateral agent for
deposit into the Spread Account.
(iii) The sum of all amounts on deposit (or scheduled to be on
deposit) in the Certificate Distribution Account and available for
distribution to the Holders pursuant to the Sale and Servicing Agreement
will be $__________ (the "Certificate Shortfall") less than the
Guaranteed Certificate Distributions with respect to [DISTRIBUTION
DATE]. Of such Certificate Shortfall, $__________ is attributable to
Guaranteed Certificate Distributions to be made to Holders of the
Certificates.
(iv) The Owner Trustee is making a claim under the Policy [(i)
for the RIC Shortfall to be applied to payment of the Guaranteed RIC
Payment and (ii)] for the Certificate Shortfall to be applied to
distributions of principal or interest or both with respect to the
Certificates.
(v) The Owner Trustee agrees that, following receipt of funds
from Financial Security, it shall (a) hold such amounts in trust and
apply the same directly to the payment of Guaranteed Distributions when
due; (b) not apply such funds for any
23
other purpose; (c) not commingle such funds with other funds held by the
Owner Trustee; and (d) maintain an accurate record of such payments with
respect to each Certificate and with respect to the RIC and the
corresponding claim on the Policy and proceeds thereof and, if the
Certificate is required to be surrendered or presented for such payment,
shall stamp on each such Certificate the legend $"[insert applicable
amount] paid by Financial Security and the balance hereof has been
cancelled and reissued" and then shall deliver such Certificate to
Financial Security.
(vi) The Owner Trustee, on behalf of the Holders, hereby
assigns to Financial Security the rights of the Holders with respect to
the Certificates to the extent of any payments under the Policy,
including, without limitation, any amounts due to the Holders in respect
of securities law violations arising from the offer and sale of the
Certificates and any amounts due and owing but unpaid under the RIC. The
foregoing assignment is in addition to, and not in limitation of, rights
of subrogation otherwise available to Financial Security in respect of
such payments. Payments to Financial Security in respect of the
foregoing assignment shall in all cases be subject to and subordinate to
the rights of the Holders to receive all Guaranteed Distributions in
respect of the Certificates. The Owner Trustee shall take such action
and deliver such instruments as may be reasonably requested or required
by Financial Security to effectuate the purpose or provisions of this
clause (vi).
(vii) The Owner Trustee, on its behalf and on behalf of the
Holders, hereby appoints Financial Security as agent and
attorney-in-fact for the Owner Trustee and each such Holder in any legal
proceeding with respect to the Certificates. The Owner Trustee hereby
agrees that Financial Security may at any time during the continuation
of any proceeding by or against any debtor with respect to which a
preference claim (as defined below) or other claim with respect to the
Certificates or the RIC is being asserted under the United States
Bankruptcy Code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding")
direct all matters relating to such Insolvency Proceeding, including
without limitation, (A) all matters relating to any claim in connection
with an Insolvency Proceeding seeking the avoidance as a preferential
transfer of any payment made with respect to the Certificates or the RIC
(a "Preference Claim"), (B) the direction of any appeal of any order
relating to any Preference Claim at the expense of Financial Security
but subject to reimbursement as provided in the Insurance Agreement and
(C) the posting of any surety, supersedes or performance bond pending
any such appeal. In addition, the Owner Trustee hereby agrees that
Financial Security shall be subrogated to, and the Owner Trustee on its
behalf and on behalf of each Holder, hereby delegates and assigns, to
the fullest extent permitted by law, the rights of the Owner Trustee and
each Holder in the conduct of any Insolvency Proceeding, including,
without limitation, all rights of any party to an adversary proceeding
or action with respect to any court order issued in connection with any
such Insolvency Proceeding.
(viii) Payment should be made by wire transfer directed to
[SPECIFY ACCOUNT].
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Unless the context otherwise requires, any capitalized term used
in this Certificate of Claim shall have the meaning assigned thereto in the
Policy, including in the Endorsement thereto.
IN WITNESS WHEREOF, the Owner Trustee has executed and delivered
this Certificate of Claim as of the ____ day of ___________, 19___.
_______________________________________
not in its individual capacity
but solely as Indenture Trustee
By: ___________________________________
Name:
Title:
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For Financial Security Assurance Inc. or Fiscal Agent use only. Wire transfer
sent on ____________________ by ____________________ Confirmation Number ______.
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