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USAA FEDERAL SAVINGS BANK
Seller and Servicer
and
THE BANK OF NEW YORK
---------------------------------------------------------
Trustee and Collateral Agent
on behalf of the Certificateholders
---------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of ________ __, 1999
$699,376,130
USAA Auto Loan Grantor Trust 1999-1
_____% Automobile Loan Pass-Through Certificates, Class A
_____% Automobile Loan Pass-Through Certificates, Class B
This Pooling and Servicing Agreement, dated as of _____ __, 1999, is made
with respect to the formation of the USAA Auto Loan Grantor Trust 1999-1 (the
"Trust"), between USAA Federal Savings Bank, a federally chartered savings
association (the "Seller" and the "Servicer" in its respective capacities as
such), and The Bank of New York, a banking corporation organized under the laws
of the State of New York, 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
Section 1.1 Creation of Trust. Upon the execution of this Agreement by the
parties hereto, there is hereby created the USAA Auto Loan Grantor Trust 1999-1.
ARTICLE II
Section 2.1 Conveyance of Receivables. In consideration of the Trustee's
delivery to, or upon the order of, the Seller of authenticated Certificates, in
authorized denominations, in an aggregate amount equal to the Original Pool
Balance, the Seller does hereby sell, transfer, assign, and otherwise convey to
the Trustee on behalf of the Trust, without recourse (subject to the Seller's
obligations herein):
(i) all right, title, and interest of the Seller in and to the
Receivables listed in SCHEDULE A hereto, all proceeds thereof and all
monies paid thereon on and after the Cutoff Date (including proceeds of the
repurchase of Receivables by the Seller pursuant to Section 12.2 or the
purchase of Receivables by the Servicer pursuant to Section 13.7 or 21.2),
together with the interest of the Seller in the security interests in the
Financed Vehicles granted by the Obligors pursuant to the Receivables;
(ii) all right, title and interest of the Seller 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 (i) and (ii).
In connection with such sale, the Seller 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 Seller 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 Seller
to the Trust and that the Receivables not be part of the Seller'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 Seller 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 Seller'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.
ARTICLE III
[Reserved]
ARTICLE IV
Section 4.1 Acceptance by Trustee. The Trustee does hereby accept all
consideration conveyed by the Seller pursuant to Section 2.1 and declares that
the Trustee shall hold such consider ation upon the trusts herein set forth for
the benefit of the Certificateholders, subject to the terms and provisions of
this Agreement.
ARTICLE V
Section 5.1 Incorporation of Standard Terms and Conditions of Agreement.
This Pooling and Servicing Agreement does hereby incorporate herein by reference
the Standard Terms and Conditions of Agreement for the USAA Auto Loan Grantor
Trust 1999-1 effective _____ ___,1999 (the "Standard Terms and Conditions of
Agreement") attached hereto as Annex I. The terms and conditions of Articles I
through X of this Pooling and Servicing Agreement, to the extent they are
inconsistent with the Standard Terms and Conditions of Agreement, shall control.
ARTICLE VI
Section 6.1 Special Definitions and Terms. Whenever used in the Standard
Terms and Conditions of Agreement and in this Pooling and Servicing Agreement,
the following words and phrases shall have the following meanings:
The "Class A Pass-Through Rate" shall be __% per annum, calculated on the
basis of a 360-day year comprised of twelve 30-day months.
"Class A Percentage" means ___%.
The "Class B Pass-Through Rate" shall be ___% per annum, calculated on the
basis of a year of twelve 30-day months.
"Class B Percentage" means ___%.
"Closing Date" shall mean July 28, 1999.
The "Corporate Trust Office" at the date hereof is located at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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The "Cutoff Date" shall be the opening of business on July 1, 1999.
The first "Distribution Date" shall be August 16, 1999.
The "Final Scheduled Distribution Date" shall be February 15, 2006 or, if
such day is not a Business Day, the next succeeding Business Day.
The "Optional Purchase Percentage" shall be [5]%.
The "Original Pool Balance" shall be $699,376,130.44.
The "Reserve Account Initial Deposit" shall be $5,245,321.
The "Required Deposit Rating" shall be 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.
"Servicing Fee Rate" shall mean 1.00% per annum.
"Specified Reserve Account Balance" means, with respect to any Distribution
Date, the greater of (i) 1.25% of the Pool Balance as of the last day of the
preceding Collection Period and (ii) 0.50% of the initial Pool Balance (such
amount not to exceed the outstanding Pool Balance as of the last day of the
preceding Collection Period); provided, however, that the Specified Reserve
Account Balance will be calculated using a percentage of [2.50]% for any
Distribution Date (beginning with the _____ __, 1999 Distribution Date) on which
the Average Net Loss Ratio exceeds [0.85]% or the Average Delinquency Ratio
exceeds [0.85]%; provided, further, that such higher percentage shall remain in
effect until the Average Net Loss Ratio and the Average Delinquency Ratio have
been equal to or less than [0.85]% for at least six consecutive Collection
Periods. The Specified Reserve Account Balance may be reduced to a lesser amount
as determined by the Seller; provided, however, that the Rating Agency Condition
is satisfied.
"Specified Yield Supplement Balance" means with respect to any Distribution
Date, an amount equal to at least the sum of all projected Yield Supplement
Amounts for all future Distribution 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.
ARTICLE VII
Section 7.1 Additional Representations and Warranties of Seller. The
Seller does hereby make the following representations and warranties to the
Trustee and the Certificateholders and the Trustee shall rely on such
representations and warranties in accepting the Receivables in trust and
authenticating the Certificates:
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(i) Receivables. Each Receivable represents a motor vehicle
installment loan made to Obligors located in a State of the United States
or the District of Columbia;
(ii) Security. Each Receivable is secured by a new or used automobile
or light-duty truck;
(iii) Maturity of Receivables. Each Receivable has a remaining
maturity, as of the Cutoff 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 9 months and not more than 60
months;
(iv) 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 [7.5]%, 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 Cutoff Date, by application of
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended;
(v) No Repossessions. Each Receivable is secured by a Financed Vehicle
that, as of the Cutoff Date, has not been repossessed without reinstatement
of such Receivable;
(vi) 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 Seller as being a debtor in any bankruptcy proceeding
as of the Cutoff Date;
(vii) No Overdue Payments. No Receivable has any payment that is more
than 30 days past due as of the Cutoff Date;
(viii) Remaining Principal Balance. Each Receivable had a remaining
principal balance, as of the Cutoff Date, of at least $500; and
(ix) Receivable Files. The Receivable Files shall be kept at one or
more of the locations specified in SCHEDULE B hereto.
ARTICLES VIII THROUGH X
[RESERVED]
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USAA AUTO LOAN GRANTOR
TRUST 1999-1 STANDARD TERMS
AND CONDITIONS OF AGREEMENT
EFFECTIVE _____ __, 1999
for the USAA Auto Loan
Grantor Trust 1999-1 formed on or
subsequent to the date specified above
INTRODUCTION
These Standard Terms and Conditions of Agreement shall be applicable to the
USAA Auto Loan Grantor Trust 1999-1 formed on or after the effective date
hereof, with respect to which a Pooling and Servicing Agreement relating to such
trust and incorporating by reference these Standard Terms and Conditions of
Agreement shall have been executed.
ARTICLE XI
Definitions
Section 11.1 Definitions. Whenever used in the 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, 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 14.3.
"Agent" means any of the Paying Agent, the Collateral Agent, the
Authenticating Agent and the Transfer Agent.
"Agreement" means a Pooling and Servicing Agreement executed by the parties
as of the related Cutoff Date, into which this Standard Terms and Conditions of
Agreement shall be incorporated by reference, and all amendments and supplements
thereto.
"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 16.12.
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"Authorized Officer" means any officer in the Corporate Trust Department of
the Trustee with direct responsibility for the administration of the Agreement.
"Available Interest" means, with respect to any Distribution Date, the
excess of (a) the sum of (i) Interest Collections for such Distribution Date,
(ii) the Yield Supplement Amount for such Distribution Date and (iii) all
Advances made by the Servicer with respect to such Distribution Date pursuant to
Section 14.3(a), over (b) the amount of Outstanding Advances to be reimbursed on
or with respect to such Distribution Date pursuant to Section 14.3(a).
"Available Principal" means, with respect to any Distribution 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 Repurchase Amount received with respect to
each Receivable repurchased by the Seller 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 Distribution Date shall exclude
all payments and proceeds of any Receivables the Repurchase Amount of which has
been distributed on a prior Distribution Date.
"Available Reserve Amount" shall mean, as of any Distribution 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.
"Average Delinquency Ratio" means, as of any Distribution Date, the average
of the Delinquency Ratios for the preceding three Collection Periods.
"Average Net Loss Ratio" means, as of any Distribution Date, the average of
the Net Loss Ratios for the preceding three Collection Periods.
"Book-Entry Certificates" means beneficial interests in the Certificates
described in Section 16.8, the ownership and transfers of which shall be made
through book entries by a Clearing Agency as described in Section 16.8.
"Business Day" means a day, other than a Saturday or a Sunday, on which the
Trustee and banks located in New York, New York are open for the purpose of
conducting a commercial banking business.
"Certificate" means any Class A Certificate or Class B Certificate.
"Certificate Account" means the account established and maintained pursuant
to Section 14.1.
"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 the
Agreement, the interest evidenced by any Certificate registered in the name of
the Seller, the Servicer or any Person controlling, controlled by, or under
common control with the Seller 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
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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
16.3.
"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.
"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 Seller, the Servicer or any Person actually known
to an Authorized Officer of the Trustee to be an Affiliate of the Seller 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 14.1.
"Class A Interest Carryover Shortfall" means, (i) with respect to the
initial Distribution Date, zero and (ii) with respect to any other Distribution
Date, the excess of Class A Monthly Interest for the preceding Distribution
Date, and any outstanding Class A Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest that is actually
deposited in the Class A Distribution Account on such preceding Distribution
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 Distribution
Date, the sum of Class A Monthly Interest for such Distribution Date and the
Class A Interest Carryover Shortfall for such Distribution Date.
"Class A Monthly Interest" means, with respect to any Distribution Date,
one-twelfth of the Class A Pass-Through Rate multiplied by the Class A
Certificate Balance as of the preceding Distribution Date (after giving effect
to all payments of principal made on such Distribution Date) or, in the case of
the first Distribution Date, as of the Closing Date.
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"Class A Monthly Principal" means, with respect to any Distribution Date,
the Class A Percentage of Available Principal for such Distribution Date plus
the Class A Percentage of Realized Losses with respect to the related Collection
Period.
"Class A Pool Factor" means, with respect to any Distribution Date, the
Class A Certificate Balance as of such Distribution Date (after giving effect to
all payments of principal to be made on such Distribution 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 Distribu tion Date, zero and (ii) with respect to any other Distribution
Date, the excess of Class A Monthly Principal for such Distribution Date and any
outstanding Class A Principal Carryover Shortfall from the preceding
Distribution Date over the amount in respect of principal that is actually
deposited in the Class A Distribution Account on such Distribution Date.
"Class A Principal Distribution" means, (i) with respect to the initial
Distribution Date, the Class A Monthly Principal for such Distribution Date and
(ii) with respect to any other Distribution Date, the sum of Class A Monthly
Principal for such Distribution Date and the Class A Principal Carryover
Shortfall as of the preceding Distribution Date. In addition, on the Final
Scheduled Distribution 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 Seller, the Servicer or any Person actually known
to an Authorized Officer of the Trustee to be an Affiliate of the Seller 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
represent ing 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 14.1.
"Class B Interest Carryover Shortfall" means, (i) with respect to the
initial Distribution Date, zero and (ii) with respect to any other Distribution
Date, the excess of Class B Monthly Interest for the preceding Distribution
Date, and any outstanding Class B Interest Carryover Shortfall on such
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preceding Distribution Date, over the amount in respect of interest that is
actually deposited in the Class B Distribution Account on such preceding
Distribution 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 Distribution
Date, the sum of Class B Monthly Interest for such Distribution Date and the
Class B Interest Carryover Shortfall for such Distribution Date.
"Class B Monthly Interest" means, with respect to any Distribution Date,
one-twelfth of the Class B Pass-Through Rate multiplied by the Class B
Certificate Balance as of the preceding Distribution Date (after giving effect
to all payments of principal made on such Distribution Date) or, in the case of
the first Distribution Date, as of the Closing Date.
"Class B Monthly Principal" means, with respect to any Distribution Date,
the Class B Percentage of Available Principal for such Distribution Date plus
the Class B Percentage of Realized Losses with respect to the related Collection
Period.
"Class B Pool Factor" means, with respect to any Distribution Date, the
Class B Principal Balance as of such Distribution Date (after giving effect to
all payments of principal to be made on such Distribution 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 Distribu tion Date, zero and (ii) with respect to any other Distribution
Date, the excess of Class B Monthly Principal for such Distribution Date and any
outstanding Class B Principal Carryover Shortfall from the preceding
Distribution Date over the amount in respect of principal that is actually
deposited in the Class B Distribution Account on such Distribution Date.
"Class B Principal Distribution" means, (i) with respect to the initial
Distribution Date, the Class B Monthly Principal for such Distribution Date and
(ii) with respect to any other Distribution Date, the sum of Class B Monthly
Principal for such Distribution Date and the Class B Principal Carryover
Shortfall as of the preceding Distribution Date. In addition, on the Final
Scheduled Distribution 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.
"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 the date set forth as such in the Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Collateral Agent" means The Bank of New York, a banking corporation, in
its capacity as collateral agent for the benefit of the Certificateholders with
respect to the Reserve Account and the Yield Supplement Account.
"Collection Period" means, during the term of this Agreement, the calendar
month preceding each Distribution Date, or in the case of the initial Collection
Period, the period from the Cutoff Date to July 31, 1999. With respect to any
Determination Date, Deposit Date or Distribution Date, the "related Collection
Period" shall mean the Collection Period preceding the month in which such
Determination Date, Deposit Date or Distribution 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 which its
corporate trust business shall be principally administered, which office shall
be the office specified as such in the Agreement, or such office at some other
address as the Trustee may designate from time to time by notice to the
Certificateholders, the Seller, the Servicer, the Paying Agent and the Transfer
Agent and Certificate Registrar.
"Cutoff Date" means the date specified as such in the Agreement.
"Cutoff Date Principal Balance" means, with respect to any Receivable, the
initial Principal Balance of such Receivable minus the sum of the portion of all
payments received under such Receivable from or on behalf of the related Obligor
on or prior to the close of business of the Servicer on the Cutoff 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 10% 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.
"Definitive Certificates" shall have the meaning specified in Section 16.8.
"Delinquency Ratio" means, for any Collection Period, the ratio, expressed
as a percentage, of (i) the principal amount of all outstanding Receivables
(other than Purchased Receiv xxxxx and Defaulted Receivables) which are sixty
(60) or more days delinquent, including, without limitation, any Account with
respect to which the Collateral has been repossessed and not liquidated, as of
the end of such Collection Period, determined in accordance with the Servicer's
customary practices, divided by (ii) the Pool Balance as of the last day of such
Collection Period.
"Deposit Date" shall mean the Business Day immediately preceding each
Distribution Date.
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"Depository Agreement" shall mean the agreement among the Seller, the
Trustee and the initial Clearing Agency, in the form attached hereto as Exhibit
F.
"Determination Date" means the 10th calendar day of the month (or, if such
10th calendar day is not a Business Day, the Business Day preceding such 10th
calendar day) immediately succeeding the related Collection Period.
"Distribution Date" means, for each Collection Period, the 15th day of the
following month, or if the 15th day is not a Business Day, the next following
Business Day, commencing with the first Distribution Date specified in the
Agreement.
"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 19.1.
"Excess Funds" shall have the meaning specified in Section 14.5(d).
"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 Distribution Date" means the date specified as such in the
Agreement.
"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.
"FNMA" means the Federal National Mortgage Association or any successor
thereto.
"Interest Collections" mean, with respect to any Distribution 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 Repurchase
Amount received with respect to each Receivable repurchased by the Seller or
purchased by the Servicer under an obligation which arose during the related
Collection Period. "Interest Collections" for any Distribution Date shall
exclude all payments and proceeds of any Receivables the Repurchase Amount of
which has been distributed on a prior Distribution Date.
"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.
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"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Loss Ratio" means, for any Collection Period, an amount, expressed as
an annualized percentage, equal to (i) the Realized Losses minus Recoveries for
such Collection Period, divided by (ii) the average of the Pool Balances on the
first day of such Collection Period and the last day of such Collection Period.
"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 Seller or Servicer, as appropriate.
"Opinion of Counsel" means a written opinion of counsel (who may be counsel
to the Seller or the Servicer) acceptable in form and substance to the Trustee.
"Optional Purchase Percentage" means the percentage specified as such in
the Agreement.
"Original Pool Balance" means the Pool Balance as of the Cutoff Date, as
specified in the Agreement.
"Outstanding Advances" means, as of any date, the aggregate of all Advances
made by the Servicer with respect to prior Distribution Dates which have not
been reimbursed pursuant to Section 14.3.
"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 16.11 and shall
initially be The Bank of New York.
"Permitted Investments" means, at any time, any one or more of the
following obligations and securities:
(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;
I-8
(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, FNMA or any other 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;
(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
I-9
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 Certifi xxxxx by the Rating Agencies.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof, 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 the last day of the preceding
Collection Period, means the Amount Financed minus that portion of all payments
received on or prior to such date allocable to principal.
"Purchased Receivable" means, on any date of determination, a Receivable as
to which payment of the Repurchase Amount has been made by the Seller or the
Servicer pursuant to the 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 Moody's.
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"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 Cutoff Date), which Receivable shall appear on Schedule A to the
Agreement.
"Receivable Files" means the documents specified in Section 12.3.
"Receivables Pool" means the pool of Receivables included in the Trust.
"Record Date" means, with respect to any Distribution Date, the Business
Day prior to such Distribution Date unless Definitive Certificates are issued,
in which case Record Date shall mean the last day of the immediately preceding
calendar month.
"Recoveries" mean, with respect to any Collection Period, all monies
received by the Servicer with respect to any Defaulted Receivable during any
Collection Period following the Collection Period in which such Receivable
became a Defaulted Receivable, net of the sum of (i) any fees, costs or expenses
incurred by the Servicer in connection with the collection of such Receivable
and the disposition of the Financed Vehicle as permitted by Section 13.3 (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 Amount" with respect to a Repurchased Receivable or any
Receivable purchased by the Servicer pursuant to Section 21.2 means the sum, as
of the last day of the preceding Collection Period on which such Receivable
becomes such, of the Principal Balance thereof plus the accrued interest thereon
at the weighted average of the Class A Pass-Through Rate and the Class B
Pass-Through Rate.
"Repurchase Date" shall have the meaning set forth in Section 12.2.
"Repurchased Receivable" means as of the last day of any Collection Period
a Receivable repurchased as of such date by the Seller pursuant to Section 12.2
or purchased as of such date by the Servicer pursuant to Section 13.7.
"Required Deposit Rating" means the ratings specified as such in the
Agreement.
"Reserve Account" shall mean the Reserve Account established and maintained
as such pursuant to Section 14.6.
"Securities Act" means the Securities Act of 1933, as amended.
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"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 the Agreement, and each successor to USAA Federal Savings
Bank (in the same capacity) pursuant to Section 17.3.
"Servicer" means USAA Federal Savings Bank in its capacity as the servicer
of the Receivables under the Agreement, each successor to USAA Federal Savings
Bank (in the same capacity) pursuant to Section 18.3, and each successor
Servicer pursuant to Section 19.2.
"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
13.9.
"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 13.8.
"Servicing Fee Rate" means the rate specified as such in the Agreement.
"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 Certificate Account relating to such Collection Period pursuant
to Sections 14.2, 14.3 and 14.4.
"Transfer Agent and Certificate Registrar" shall have the meaning specified
in Section 16.3 and shall initially be The Bank of New York.
"Trust" means the trust created by the Agreement, the estate of which shall
consist of the property transferred thereto pursuant to the Agreement; funds
deposited in the Certificate 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 the Agreement as Trustee, its
successor in interest pursuant to Section 20.12, and any successor Trustee
pursuant to Section 20.11.
"Trustee's Certificate" means a certificate completed and executed by an
Authorized Officer pursuant to Section 20.3 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 15.2.
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"Yield Supplement Account Property" has the meaning specified in Section
15.2(b).
"Yield Supplement Agreement" means the Yield Supplement Agreement dated as
of the Closing Date between the Seller, the Servicer and Trustee, substantially
in the form attached hereto as Exhibit F.
"Yield Supplement Amount" shall have the meaning specified in Section 15.1.
"Yield Supplement Initial Deposit" means cash or Permitted Investments
having a value of at least $____.
Section 11.2 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 the Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
Section 11.3 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 Seller 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 11.4 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 Cutoff 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 11.5 Section References. All section references shall be to
Sections in these Standard Terms and Conditions of Agreement unless otherwise
specified.
Section 11.6 Separate Agreements. Each Agreement which shall incorporate by
reference these Standard Terms and Conditions of Agreement shall be separate and
distinct from each other such Agreement, no provision of any such Agreement
shall be applicable to any other such Agreement, and all references to "the
Agreement" and to provisions thereof shall be references to a particular
Agreement which incorporates these Standard Terms and Conditions of Agreement.
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ARTICLE XII
The Receivables
Section 12.1 Representations and Warranties of Seller; Conditions Relating
to Receivables.
(a) The Seller 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 Cutoff 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 the 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 Seller which meet the selection criteria specified
herein and in the Agreement.
(ii) No Sale or Transfer. No Receivable has been sold, transferred,
assigned or pledged by the Seller to any Person other than the Trustee.
(iii) Good Title. Immediately prior to the transfer and assignment of
the Receivables to the Trustee on behalf of the Trust herein contem plated,
the Seller had good and marketable title to each Receivable free and clear
of all Liens, encumbrances, security interests 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, encum brances, security interests,
and rights of others, and the transfer has been perfected under applicable
law or (ii) a first priority perfected security interest in each Receiv
able.
(b) Each Receivable satisfies the following conditions as of the Cutoff
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 custom ary 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 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 Cutoff 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
5
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 municipal ity 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 Seller 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 representa
tions and warranties made by the Seller herein with respect thereto or to
meet all of the conditions with respect thereto pursuant to this subsection
12.1(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 13.2 and no such
amendment has caused such Receivable either to fail to meet all of the
representations and warran ties made by the Seller herein with respect
thereto or to fail to meet all of the condi tions with respect thereto
pursuant to this subsection 12.1(b).
(ix) No Defenses. As of the Cutoff Date, there are no rights of
rescission, setoff, counterclaim, or defense, and the Seller has no
knowledge of the same being asserted or threatened, with respect to any
Receivable.
(x) No Liens. As of the Cutoff Date, the Seller has no knowledge of
any Liens or claims that have been filed, including Liens for work, labor,
materials or unpaid
6
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 Cutoff Date, the Seller has no
knowledge that a default, breach, violation, or event permitting
acceleration under the terms of any Receivable exists; the Seller 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 Seller 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 the 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
Seller.
(xvi) Agreement. The additional representations and warran ties in
Section 7.1 of the Agreement are true and correct.
Section 12.2 Repurchase Upon Breach or Failure of a Condition. The Seller,
the Servicer, or the Trustee, as the case may be, shall inform the other parties
promptly, in writing, upon the discovery by the Seller, the Servicer or an
Authorized Officer of the Trustee of either any breach of the Seller's
representations and warranties set forth in subsection 12.1(a) or the failure of
any Receivable to satisfy any of the conditions set forth in subsection 12.1(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 Seller's option, the last day of the Collection
Period during which such discovery occurred) (such date, the "Repurchase Date"),
the Seller 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. In consideration of the repurchase of a Receivable, the Seller
shall remit the Repurchase Amount of such Receivable as of the Repurchase Date
(less any Liquidation Proceeds deposited, or to be deposited, by the Servicer in
the Certificate Account with respect to such Receiv able pursuant to Section
13.3) in the manner specified in Section 14.4; provided, however, that
notwithstanding anything to the contrary contained herein, the Seller shall
repurchase such Receivable as of the last day of the Collection Period during
which the discovery thereof by the Seller or the Servicer occurred or the notice
thereof from the Trustee was received by the Seller. The sole remedy of the
Trust, the Trustee or the Certificateholders with respect either to a breach of
the Seller's representations and warranties set forth in subsection 12.1(a)
8
or to a failure of any of the conditions set forth in subsection 12.1(b) shall
be to require the Seller to repurchase Receivables pursuant to this Section
12.2. The obligation of the Seller to repurchase under this Section 12.2 shall
not be solely dependent upon the actual knowledge of the Seller of any breached
representation or 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 12.2 or the eligibility of
any Receivable for purposes of the Agreement.
Section 12.3 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 the 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 Seller 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 Seller 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 12.4 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 the 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 report to the Trustee any failure on its part to hold
the Receivable Files and maintain its
9
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 the 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 12.5 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 12.6 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 12.7 Effective Period and Termination. The Servicer's appointment
as custodian shall become effective as of the Cutoff Date and shall continue in
full force and effect until terminated pursuant to this Section 12.7 or until
the Agreement shall be terminated. If the Servicer shall resign as Servicer
under Section 18.5 or if all of the rights and obligations of the Servicer shall
have been terminated under Section 19.1, 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 19.1. As soon as practicable after any termination of such
appointment, the Servicer shall, at its expense, deliver the Receivable Files 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.
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ARTICLE XIII
Administration and Servicing of Receivables
Section 13.1 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
14.3. 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
2.1 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 13.2 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 the 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 or others and that is consistent with prudent
industry standards. 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 the 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 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
Distribution 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 13.7. For the purpose of such purchases pursuant to Section 13.7, notice
shall be deemed to have been received by
11
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 13.3 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 Receiv able shall
be deposited by the Servicer in the Certificate Account in the manner specified
in Section 14.2 and shall be applied to reduce (or to satisfy, as the case may
be) the Repurchase Amount of the Receivable, if such Receivable is to be
repurchased by the Seller pursuant to Section 12.2, or is to be purchased by the
Servicer pursuant to Section 13.7. 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 13.4 [Reserved]
Section 13.5 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 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 13.6 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:
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(i) Security Interest to Remain in Force. The Financed Vehicle
securing each Receivable shall not be released from the security interest
xxxxx xx 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 13.2. 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 Distribution Date.
Section 13.7 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
13.6. Except as otherwise specified in Section 13.2, 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 13.6(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 Repurchase Amount
(less any Liquidation Proceeds deposited, or to be deposited, by the Servicer in
the Certificate Account with respect to such Receivable pursuant to Section
13.3) in the manner specified in Section 14.4. The sole remedy of the Trust, the
Trustee, or the Certificateholders against the Servicer with respect to a breach
pursuant to Section 13.6 shall be to require the Servicer to purchase
Receivables pursuant to this Section 13.7. 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 13.7 or the
eligibility of any Receivable for purposes of the Agreement.
Section 13.8 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 Certificate Account or earned on collections
pending deposit in the Certificate 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 Distribution 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
13
distributions and reports to Certificateholders) except expenses in connection
with realizing upon a Receivable under Section 13.3 which may be paid from
Liquidation Proceeds from such Receivable.
Section 13.9 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 14.5 and
all information necessary for the Paying Agent to send statements to
Certificateholders pursuant to Section 14.7. 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 Seller 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 14.3 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 the Agreement; provided, however, that no material informa
tion 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 13.10 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, 2000, 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 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 the 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 the
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 19.1. The Seller 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 19.1.
Section 13.11 Annual Audit Report. The Servicer shall cause a firm of
independent public accountants (which may provide other services to the Servicer
or the Seller) 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, 2000, 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
14
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 13.9 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 13.9 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 13.12 Access to Certain Documentation and Information Regarding
Receiv xxxxx. The Servicer shall provide to the Certificateholders access to the
Receivable Files in such cases where the Certificateholders shall be required by
applicable statutes or regulations to have access to such documentation. Nothing
in this Section 13.12 shall affect the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors, and
the failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section 13.12.
Section 13.13 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 13.9, the annual audit statement described in
Section 13.10, or the annual audit report described in Section 13.11. The
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 14.8 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 13.14 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.
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ARTICLE XIV
Distributions; Statements to
Certificateholders
Section 14.1 Accounts. (a) The Servicer shall establish the (i) Certificate
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 Certificate Account shall satisfy the requirements of clause (x) above.
The Seller 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 Seller 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 Certificate Account, the Class A
Distribution Account or the Class B Distribution Account cease to be either a
Qualified Institution or a Qualified Trust Institution, then the Servicer shall,
with the Seller'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.
All amounts held in the Certificate 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 proximate to but not
later than the Deposit Date next succeeding the date of investment; provided,
that if the Certificate Account is maintained with the Trustee, such Permitted
Investments may mature on the Distribution 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 Seller shall establish the Reserve Account in the name of the
Collateral Agent for the benefit of the Certificateholders. Subject to Section
14.5(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 Seller's assistance as necessary, cause such account to be
moved to a Qualified Trust Institution, unless the Seller 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
16
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 Distribution 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 Seller. 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 applicable Account.
(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 Seller (and any successor to the Seller in accordance with
Section 17.3) 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 interests created by this Section 14.4 and
otherwise effectuate the purposes, terms and conditions of this Section 14.4.
(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 Seller; (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
17
(vi) such Qualified Trust Institution has agreed that it will waive any right of
set-off unrelated to its fees for such Account.
Section 14.2 Collections. The Servicer shall remit daily within two
Business Days of receipt to the Certificate 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. Notwith standing the
provisions of the first sentence of this Section 14.2, the Servicer, so long as
the Servicer is USAA Federal Savings Bank, 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 A-1 and P-1, respectively, or (b) the Servicer provides the
Trustee with (1) 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 the remittance of Collections on a monthly, rather than a
daily, basis. Any such collections remitted to the Certificate 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 14.2 the phrase "payments made on behalf of the
Obligors" shall mean payments made by Persons other than the Seller or the
Servicer.
Section 14.3 Advances.
(a) As of each Deposit Date, the Servicer may, in its sole discretion, 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 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 Repurchase Amount during or with respect to such Collection
Period. The Servicer shall deposit all such Advances into the Certificate
Account in immediately available funds no later than, 11:00 a.m. New York City
time, on the Deposit Date. 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 14.5(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 up to the amount of accrued and unpaid interest thereon
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. The Servicer shall not be required to make an Advance (other
than a Simple Interest Advance) to the extent that the Servicer, in its sole
discretion, determines that such Advance would not subsequently be recovered
(whether from Interest Collections on such Receivables (including Liquidation
Proceeds) or the Reserve Account). The Servicer shall not make any advance with
respect to principal of Receivables. Notwithstanding anything else herein, the
Servicer shall be reimbursed only from accrued interest due from the Obligor
under the Receivable.
(b) The Servicer shall deposit in the Certificate Account the aggregate
Advances on the Receivables pursuant to Section 14.3(a). To the extent that the
Servicer fails to make an Advance pursuant to Section 14.3(a) on the date
required, the Servicer shall so notify the Trustee in writing
18
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 Certificate Account. The
Trustee shall deposit in the Certificate Account the aggregate of any amounts
received pursuant to the Yield Supplement Agreement on the date of receipt
thereof.
Section 14.4 Additional Deposits. The Servicer, or the Seller, as the case
may be, shall deposit into the Certificate Account the aggregate Repurchase
Amount pursuant to Sections 12.2, 13.7 and 21.2, as applicable. All remittances
shall be made to the Certificate Account, in immediately available funds, no
later than 11:00 a.m., on the Deposit Date.
SECTION 14.5 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 Distribution Date, after making the reimbursements to the
Servicer from amounts on deposit in the Certificate Account of Outstanding
Advances pursuant to Section 14.3, the Trustee shall withdraw from the
Certificate Account, the Available Interest and Available Principal for such
Distribution Date, withdraw from the Reserve Account such amounts as may be
required to satisfy amounts requested by the Servicer for such Distribution
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 20.7 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 Distribution 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 Distribution Date based solely on
the information contained in the Servicer's Certificate.
On each Distribution 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:
19
(iv) to the Class A Distribution Account, the Class A Principal
Distribution for such Distribution Date;
(v) to the Class B Distribution Account, the Class B Principal
Distribution for such Distribution Date;
(vi) 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
(vii) to the Seller, any amount remaining less any accrued and unpaid
Trustee fees and expenses which shall be paid to the Trustee;
(c) On each Distribution 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 21.1, 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 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 the bank maintaining the Class A Distribution Account or the Class B
Distribution Account, as applicable, shall promptly deliver to the Trustee a
confirmation of such wire transfer. To the extent that the Trustee is required
to make payments to Certificateholders by check hereunder, it shall request the
bank maintaining the Class A Distribution Account or the Class B Distribution
Account, as applicable, to provide it with a supply of checks to make such
payments. The bank shall, if a request is made by the Trustee for a wire
transfer by 9:00 A.M. (New York time) on any Distribution Date, wire such funds
in accordance with such instructions by 10:00 A.M. (New York time) on such
Distribution Date, and it will otherwise act in compliance with the provisions
of this paragraph and the other provisions of this Agreement applicable to it as
the bank maintaining the Class A Distribution Account or the Class B
Distribution Account, as applicable. The Servicer shall take all necessary
action (including requiring an agreement to such effect) to ensure that any bank
maintaining the Class A Distribution Account or the Class B Distribution
Account, as applicable, agrees to comply, and complies, with the provisions of
this paragraph and the other provisions of this Agreement applicable to it as
the bank maintaining the Class A Distribution Account or the Class B
Distribution Account, as applicable.
SECTION 14.6 Reserve Account. On the Closing Date, the Seller shall deposit
the Reserve Account Initial Deposit into the Reserve Account. The Seller hereby
grants to the Collateral Agent for the benefit of the Certificateholders a
security interest in and to the Reserve Account and any and all Financial Assets
or other property credited thereto from time to time, including, but not limited
to, Permitted Investments, 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 The
Bank of New York, as Collateral Agent. The Bank of New York hereby accepts such
appointment as Collateral Agent. The Collateral Agent accepts such
20
appointment and agrees to establish the Reserve Account at the Corporate Trust
Office and to comply with Section 14.1(f).
Section 14.7 Net Deposits. USAA Federal Savings Bank (in whatever capacity)
may make the remittances pursuant to Section 14.2 and Section 14.4 above, net of
amounts to be retained by it or distributed to it (also in whatever capacity)
pursuant to Section 14.5, if (a) it shall be the Servicer and (b) it is
entitled, pursuant to Section 14.2, to make deposits on a monthly basis, rather
than a daily basis. The Servicer may remit amounts to the Certificate Account
net of investment earnings accrued on such amounts pending deposit into the
Certificate 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 14.8 Statements to Certificateholders. On each Distribution 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 13.9, 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;
(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
Distribution 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 Repurchase Amount of Receivables repurchased by
the Seller or purchased by the Servicer;
(ix) the balance of the Reserve Account on such Distribution Date,
after giving effect to changes therein on such Distribution Date; and
(x) the Specified Reserve Account Balance as of the close of business
on such Distribution Date.
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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 XV
Yield Supplement Agreement
Section 15.1 Yield Supplement Agreement. Simultaneously with the execution
of this Agreement, the Seller 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 Seller, 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 calcu lated 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 Servic ing 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 Distribution Date, the "Yield Supplement Amount").
SECTION 15.2 Yield Supplement Account. (a) The Seller shall establish and
maintain in the name of the Collateral Agent a segregated trust account to
secure the Seller'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 Seller 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 Seller of its
obligations under the Yield Supplement Agreement, the Seller, on behalf of
itself and its succes sors 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 Ac count, and all
proceeds of the foregoing, including, without limitation, all other amounts and
investments held from time to time in the Yield Supplement Account (whether in
the form of deposit accounts, physical securities, book-entry securities,
uncertificated securities
22
or otherwise) 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 Seller and
designated in writing by the Seller to the Collat eral Agent; provided, however,
it is understood and agreed 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 Permit xxx Investments are not required to be (but may be)
invested over night. The Seller 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) No later than 11:00 A.M. (New York time) on each Deposit Date, the
Servicer shall deposit to the Certificate Account an amount equal to the Yield
Supplement Amount for the related Collection Period; provided that if, on any
Distribution 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 Supple ment Account an amount equal to such deficiency and deposit
such amount to the Certificate Account.
(e) 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.
(f) Amounts on deposit in the Yield Supplement Account will be released to
the Seller on each Distribution Date to the extent that the amount on deposit in
the Yield Supplement Account would exceed the Specified Yield Supplement
Balance. Upon a distribution to the Seller of amounts from the Yield Supplement
Account, the Certificateholders
23
will not have any rights in, or claims to, such amounts. Amounts properly
distributed to the Seller 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 Seller shall in no event
thereafter be required to refund any such distributed amounts.
(g) With respect to the Yield Supplement Account Property, the Seller and
the Collateral Agent agree that:
(i) any Yield Supplement Account Property that is held in deposit
accounts shall be held solely in the name of the Collateral Agent at
one or more depository institu tions having the Required Deposit
Rating; each such deposit account shall be subject to the exclusive
custody and con trol of the Collateral Agent, and the Collateral Agent
shall have sole signature authority with respect thereto;
(ii) any Yield Supplement Account Property that constitutes
physical securities shall be delivered to the Collateral Agent in
accordance with paragraph (i) of the definition of "Delivery" (except
that all references therein to the "Trustee" shall be deemed to be
references to the Collateral Agent) and shall be held, pending
maturity or disposition, solely by the Collateral Agent or a financial
intermediary (as such term is defined in the relevant UCC) acting
solely for the benefit of Certificateholders;
(iii) any Yield Supplement Account Property that is a book-entry
security held through the Federal Reserve System pursuant to Federal
book-entry regulations shall be delivered in accordance with paragraph
(b) of the definition of "Delivery" and shall be maintained by the
Collateral Agent, pending maturity or disposition, through continued
book-entry registration of such Yield Supplement Account Property as
described in such paragraph; and
(iv) any Yield Supplement Account Property that is an
"uncertificated security" under the relevant UCC and that is not
governed by clause (iii) above shall be delivered to the Collateral
Agent in accordance with paragraph (iii) of the definition of
"Delivery" (except that all references therein to the "Trustee" shall
be deemed to be references to the Collateral Agent) and shall be
maintained by the Collateral Agent, pending maturity or disposition,
through continued registration of the Collateral Agent's (or its
nominee's) ownership of such security.
Effective upon Delivery of any Yield Supplement Account Property in the form of
physical securities, book-entry securities or uncertifi cated securities, the
Collateral Agent shall be deemed to have repre sented that it has purchased such
Yield Supplement Account Property for value, in good faith and without notice of
any adverse claim thereto.
(h) The Seller 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 instru-
24
ments (including, without limitation, any financing statements under the UCC or
this Agreement) as may be determined to be necessary, in order to perfect the
interests created by this Section 15.2 and otherwise fully to effectuate the
purposes, terms and conditions of this Section 15.2. The Seller and Servicer
shall:
(A) promptly execute, deliver and file any financing statements,
amendments, continuation statements, assignments, certifi xxxxx and other
documents with respect to such interests and perform all such other acts as may
be necessary in order to perfect or to maintain the perfection of the Collateral
Agent's security interest; and
(B) make the necessary filings of financing statements or amendments
thereto within five days after the occurrence of any of the following: (1) any
change in their respective names or any trade names, (2) any change in the
location of their respective chief execu tive offices or principal places of
business and (3) any merger or consolidation or other change in their respective
identities or corporate structures; and all promptly notify the Collateral Agent
of any such filings.
(i) Investment earnings attributable to the Yield Supple ment Account
Property and proceeds therefrom shall be held by the Collateral Agent for the
benefit of the Seller. 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
Distribution Date to the Seller.
ARTICLE XVI
The Certificates
Section 16.1 The Certificates. Unless otherwise specified in the Agreement,
the Certificates shall be issued in denominations of $1,000 and integral
multiples thereof; provided, however, 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
the Agree ment, 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 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 16.2 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
25
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 Seller,
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 16.3 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 accordance with the provisions of Section 16.7,
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. The Bank of New York 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 Seller, 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 the Agreement
applicable to it, to act, as successor Transfer Agent and Certificate Registrar
under the Agreement.
The Bank of New York shall be permitted to resign as Transfer Agent and
Certificate Registrar upon 30 days' written notice to the Seller and the
Servicer; provided, however, that such resignation shall not be effective and
The Bank of New York 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 Seller.
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 16.7, 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,
26
which signature on such assignment must be guaranteed by a member of the New
York Stock Exchange or a commercial bank or trust company.
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 Seller.
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 16.4 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 16.4, 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 16.4 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 16.5 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
14.5(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 16.6 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 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 the 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
27
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 16.7 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 000 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Structured Finance Operations, 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 16.8 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 Seller, shall
be issued in the form of one or more typewritten Certificates representing the
Book-Entry Certificates, to be delivered to the initial Clearing Agency, by, or
on behalf of, the Seller. 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
16.10. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to Class A Certificateholders or the Class B
Certificateholders pursuant to Section 16.10:
(i) the provisions of this Section 16.8 shall be in full force
and effect;
(ii) the Seller, 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 16.8
conflict with any other provisions of the Agreement, the provisions of
this Section 16.8 shall control;
(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 the
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 the 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
28
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 16.9 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under the Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 16.10, 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 16.10 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 Seller,
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 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.
29
Section 16.11 Appointment of Paying Agent.
(a) The Paying Agent shall have the revocable power to withdraw funds from
the Certificate Account and make distributions to the Certificateholders
pursuant to Section 14.5 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 the Agreement in
any material respect or for other good cause. The Paying Agent shall initially
be The Bank of New York. The Bank of New York 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 The Bank of New York 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 20.2, 20.4 and 20.5 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) The Bank of New York 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 16.12 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 Seller, which consent may not be unreasonably
withheld.
(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 Seller. 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 Seller. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time an authenticating
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agent shall cease to be acceptable to the Trustee or the Seller, the Trustee
promptly may appoint a successor authenticating agent with the consent of the
Seller. 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 Seller, 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 16.13.
(e) The provisions of Sections 20.2, 20.4 and 20.5 shall be applicable to
any authenticating agent.
(f) Pursuant to an appointment made under this Section 16.13, 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:
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 16.13 Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by the 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 Seller 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 the Agreement and conclusive in
favor of the Trustee, the Seller and the Servicer, if made in the manner
provided in this Section 16.14.
(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.
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(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 Seller 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 16.13 as it shall deem necessary.
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ARTICLE XVII
The Seller
Section 17.1 Representations of Seller. The Seller makes the following
representa tions 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 the Agreement, and shall survive the sale of the
Receivables to the Trustee.
(i) Organization and Good Standing. The Seller 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 and own the Receivables.
(ii) Power and Authority. The Seller has the power and authority to
execute and deliver the Agreement and to carry out its terms; the Seller
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 perfor xxxxx of the Agreement has been duly
authorized by the Seller by all necessary corporate action.
(iii) Valid Sale; Binding Obligations. The Agreement effects a valid
sale, transfer, and assignment of the Receivables, enforceable against
creditors of and purchasers from the Seller and constitutes a legal, valid,
and binding obligation of the Seller enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforce ment 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 contem plated
by the 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 charter or bylaws of the Seller, 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 Seller 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 Seller's
knowledge, any order, rule, or regulation applicable to the Seller of any
court or of any federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the Seller or
its properties.
(v) No Proceedings. There are no proceedings or investigations
pending, or, to the best of the Seller's knowledge, threatened, before any
court, regulatory body,
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administrative agency, or other governmental instrumentality having
jurisdiction over the Seller or its properties (a) asserting the invalidity
of the Agreement or the Certificates, (b) seeking to prevent the issuance
of the Certificates or the consummation of any of the transactions
contemplated by the Agreement, (c) seeking any determination or ruling that
might materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, the Agree ment or
the Certificates or (d) relating to the Seller and which might adversely
affect the federal income tax attributes of the Certificates.
Section 17.2 Liability of Seller; Indemnities. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller in such capacity under the Agreement and shall have no
other obligations or liabilities hereunder.
The Seller 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 the Agreement, and
costs and expenses in defending against the same.
The Seller 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 Seller'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 Seller's violation of federal or state securities laws in
connection with the registration of the sale of the Certificates.
Indemnification under this Section 17.2 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
Seller shall have made any indemnity payments to the Trust or the Trustee
pursuant to this Section 17.2 and the Trust or the Trustee thereafter shall
collect any of such amounts from others, the Trust shall repay such amounts to
the Seller, without interest.
Section 17.3 Merger or Consolidation of Seller. Any corporation or other
entity (i) into which the Seller may be merged or consolidated, (ii) which may
result from any merger, conversion, or consolidation to which the Seller shall
be a party, or (iii) which may succeed to all or substantially all of the
business of the Seller, which corporation or other entity executes an agreement
of assumption to perform every obligation of the Seller under the Agreement,
shall be the successor to the Seller hereunder without the execution or filing
of any document or any further act by any of the parties to the Agreement. The
Seller shall give prompt written notice of any merger or consolidation to the
Trustee, the Servicer and the Rating Agencies.
Section 17.4 Limitation on Liability of Seller and Others. The Seller and
any director, officer, employee or agent of the Seller may rely in good faith on
the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Seller shall not be under any obligation under this Agreement to appear in,
prosecute, or
34
defend any legal action that shall be unrelated to its obligations under the
Agreement, and that in its opinion may involve it in any expense or liability.
Section 17.5 Seller May Own Certificates. The Seller and any Person
controlling, controlled by, or under common control with the Seller 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 Seller or an affiliate
thereof, except as otherwise provided in the definition of "Certificateholder",
"Class A Certificateholder" and "Class B Certificateholder" specified in Section
11.1. Certificates so owned by or pledged to the Seller or such controlling or
commonly controlled Person shall have an equal and proportionate benefit under
the provisions of the Agreement, without preference, priority, or distinction as
among all of the Certificates.
ARTICLE XVIII
The Servicer
Section 18.1 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 the 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 or corporation and is in good standing under the laws of the
United States of America or its state of incorporation, 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 author ity to
execute and deliver the Agreement and to carry out its terms; and the
execution, delivery, and performance of the Agreement has been duly
authorized by the Servicer by all necessary corporate action.
(iii) Binding Obligations. The 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
and by 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 contem plated
by the 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
35
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 the Agreement or the Certificates, (b) seeking
to prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by the 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, the 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 18.2 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 the 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 the Agreement, including,
without limitation, any sales, gross receipts, general corporation,
tangible or intangible personal property, privilege, or license taxes (but
not 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
36
misfeasance, negligence, or bad faith of the Servicer in the performance of
its duties under the Agreement or by reason of reckless disregard of its
obligations and duties under the Agreement.
(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 20.14; or (3) shall be one as to which the Seller is
required to indemnify the Trustee.
Indemnification under this Section 18.2 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 18.2 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 18.2 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 18.3 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, or (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,
shall be the successor to the Servicer under the Agreement without the execution
or filing of any document or any further act on the part of any of the parties
to the Agreement. The Servicer shall promptly inform the Trustee, the Seller and
the Rating Agencies in writing of any such merger or consolidation.
Section 18.4 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 the
Agreement, for any action taken or for refraining from the taking of any
action pursuant to the 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 the
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 the 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 the Agreement, other than (i) any
loss or liability otherwise reimbursable pursuant to the Agreement; (ii) any
loss, liability, or expense incurred solely by reason of the
37
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 the Agreement; (iii) any loss, liability, or expense for
which the Trust is to be indemnified by the Servicer under the Agreement, and
(iv) any loss, liability, or expense incurred by the Person to be indemnified
for which loss, liability, or expense, such Person shall be indemnified by the
Trust. Any amounts due the Servicer pursuant to this subsection shall be payable
on a Distribution Date from the Total Collections on deposit in the Certificate
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 20.8 have been made,
and deposits of any amount required to be deposited into the Reserve Account
pursuant to Section 14.5(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 the 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 the 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 the Agreement and the rights and duties of the parties
to the Agreement and the interests of the Certificateholders under the
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 Distribution
Date from the Total Collections on deposit in the Certificate 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 20.8 have been made and deposits of any amount
required to be deposited into the Reserve Account pursuant to Section
14.5(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.
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 18.5 Servicer Not To Resign. The Servicer shall not resign from its
obligations and duties under the 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 19.2, 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 19.2.
Section 18.6 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 18.6, the Servicer shall not be relieved of its liability and
responsibility
38
with respect to such duties, and any such delegation shall not
constitute a resignation within the meaning of Section 18.5 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 XIX
Events of Servicing Termination
Section 19.1 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 to deliver to the Trustee the
Servicer's Certificate for the related Collection Period, or 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 the 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 Distribution Date), in each case that continues
unremedied for a period of five Business Days after (A) discovery by 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; or
(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
the 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 60 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
18.6 or to meet the eligibility criteria set forth in Section 19.2 shall
constitute an Event of Servicing Termination without regard to (a) and (b)
above; or
(iii) 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 their respective affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
39
(iv) 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 or of or relating to substantially all of their
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 voluntarily suspend payment of its
obligations;
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 25% 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 the Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under the 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 19.1; 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 the 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 Certificate 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 the Agreement to reflect such succession as Servicer pursuant to this
Section 19.1 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.
Section 19.2 Trustee to Act; Appointment of Successor. Upon the Servicer's
receipt of notice of termination pursuant to Section 19.1 the Trustee shall, and
upon the Servicer's resignation pursuant to Section 18.5 the Trustee may, be the
successor in all respects to the Servicer in its capacity as Servicer under the
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 the Agreement. As compensation therefor,
the Trustee shall be entitled to such compensation (whether payable out of the
Certificate Account or otherwise) as the Servicer would have been entitled to
under the 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 the Agreement; provided, that the appointment of any such
successor Servicer will not result in the withdrawal or reduction of the
outstanding ratings assigned to the Certificates by the Rating Agencies. 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 the
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Agreement. The Trustee and such successor Servicer shall take such action,
consistent with the 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 19.2 until the newly appointed successor Servicer shall have assumed the
responsibilities and obligations of the Servicer under the Agreement.
Section 19.3 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 XIX, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses of record, to the Seller and to the Rating Agencies.
Section 19.4 Waiver of Past Defaults. The Holders of Certificates
evidencing not less than 51% 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 Certificate 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.
ARTICLE XX
The Trustee
Section 20.1 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 20.2 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 the 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 the 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 19.2,
the Trustee
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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 the Agreement, shall examine them to determine whether they conform
to the requirements of the 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 the 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 the Agreement, the Trustee shall not be
liable except for the performance of such duties and obligations as shall
be specifically set forth in the Agreement, no implied covenants or
obligations shall be read into the Agreement against the Trustee, the
permissible right of the Trustee to do things enumerated in the Agreement
shall not be construed as a duty 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 the 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 the 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 the 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 the 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 the 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 the Agreement.
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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 the 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 the 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 the 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 the 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 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 20.3 Trustee's Assignment of Repurchased Receivables and Trustee's
Certificate. With respect to any Receivable repurchased by the Seller pursuant
to Section 12.2 or purchased by the Servicer pursuant to Section 13.7 or 21.2,
the Trustee shall (i) assign, without recourse, representation, or warranty, to
the Seller 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 2.1 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 Seller 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 the 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 20.3 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 20.4 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 20.2:
(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
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letter of independent certified public accountants described in Section
13.11, the Servicer's Certificate described in Section 13.9, and the annual
compliance statement described in Section 13.10) 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 the 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 Seller and the Servicer.
(iii) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by the Agreement, or to institute, conduct or
defend any litigation under the Agreement or in relation to the Agreement,
at the request, order or direction of any of the Certificateholders
pursuant to the provisions of the 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 the 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 the 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 the
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 the 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.
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(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties under the 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.
(viii) 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 20 shall also be afforded to each Paying Agent, Collateral
Agent, Authenticating Agent or Transfer Agent and Registrar.
Section 20.5 Trustee Not Liable for Certificates or Receivables. The
recitals contained in the Agreement and in the Certificates shall be taken as
the statements of the Seller or the Servicer, as the case may be, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee shall
make no representations as to the validity or sufficiency of the 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 Seller or Servicer unless explicitly set forth in the 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 the 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 or Force Placed 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 Seller or the Servicer with any warranty or representation
made under the 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 Seller, 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 the
Agreement. Except with respect to a claim based on the failure of the Trustee to
perform its duties under the 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 20.14, no recourse shall be had
for any claim or defense based on any provision of the 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 the Agreement. The Trustee shall not be accountable for the use
or application by the Seller 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 20.6 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 Seller and the Servicer in banking transactions with the same rights as
it would have if it were not Trustee.
Section 20.7 Trustee's Fees and Expenses. By execution and delivery of the
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 the Agreement and in
the exercise and performance of any of the powers and duties under the 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
the Agreement (including expenses, disbursements, and advances incurred in
defense of any action brought against it in connection with the 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 the 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 14.5(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 20.8, shall indemnify the Trustee with respect to
certain matters, and Certificateholders, pursuant to Section 22.3, shall upon
the circumstances therein set forth, indemnify the Trustee under certain
circumstances. The provisions of this Section 20.7 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 Seller under Section 14.5 of this
Agreement. The covenants and agreements contained in this Section 20.7 shall
survive the termination of this Agreement and shall be binding, as applicable,
on the Servicer, and any successor Servicer and the Seller.
Section 20.8 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 Seller 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 the
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
46
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 20.14; provided, however, that the obligations of
the Servicer in this Section 20.8 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 20.8, 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 20.8 shall be payable on a Distribution 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 20.8 shall survive the termination of this
Agreement and the resignation or removal of the Trustee.
Section 20.9 Eligibility Requirements for Trustee. The Trustee under the
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 20.9, 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 BBB- and Baa3 by Xxxxx'x or such other ratings as are acceptable to
the Rating Agencies. In case at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section 20.9, the Trustee shall resign
immediately in the manner and with the effect specified in Section 20.10.
Section 20.10 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 20.9 or shall be legally unable to act, or shall be
adjudged a bankrupt or insolvent, or a 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 20.10 shall not become
effective until acceptance of appointment by the successor Trustee pursuant to
Section 20.11.
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Section 20.11 Successor Trustee. Any successor Trustee appointed pursuant
to Section 20.10 shall execute, acknowledge, and deliver to the Servicer and to
its predecessor Trustee an instrument accepting such appointment under the
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 the 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 the 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
20.11 unless at the time of such acceptance such successor Trustee shall be
eligible pursuant to Section 20.9.
Upon acceptance of appointment by a successor Trustee pursuant to this
Section 20.11, the Servicer shall mail notice of the successor of such Trustee
under the 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 20.12 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 the Agreement, shall be the successor of the Trustee hereunder, provided
such corporation or other entity shall be eligible pursuant to Section 20.9,
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 Seller, the Servicer and the Rating Agencies.
Section 20.13 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of the 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 20.13,
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
the Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 20.9 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee or separate trustees shall be
required pursuant to Section 20.11.
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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 the Agreement or as
successor to the Servicer under the 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 the Agreement shall be personally liable by
reason of any act or omission of any other trustee under the 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 the Agreement and the conditions
of this Article XX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or properties specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of the Agreement,
specifically including every provision of the 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 the 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 20.14 Representations and Warranties of Trustee. The Trustee makes
the following representations and warranties on which the Seller, the Servicer,
and the Certificateholders may rely:
(i) Organization and Good Standing. The Trustee is a banking
corporation duly organized, validly existing, and in good standing under
the laws of the State of New York.
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(ii) Power and Authority. The Trustee has full power, authority and
legal right to execute, deliver, and perform the Agreement, and has taken
all necessary action to authorize the execution, delivery, and performance
by it of the Agreement.
(iii) No Violation. The execution and delivery of the Agreement and
the performance by the Trustee of its obligations under the 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 the 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. The 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, 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 20.15 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 20.16 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under the 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 20.17 Suits for Enforcement. In case an Event of Servicing
Termination or other default by the Servicer or the Seller 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 the
50
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
the Agreement or in aid of the execution of any power granted in the 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 20.18 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 XXI
Termination
Section 21.1 Termination of the Trust. The Trust, and the respective
obligations and responsibilities of the Seller, the Servicer and the Trustee
shall terminate with respect to the Certificateholders upon the first to occur
of (i) the Distribution Date next succeeding the month 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 the Agreement; provided, however, that in no event shall the
Trust created by the 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 the Agreement.
The Servicer shall promptly (but in any event not later than the first day of
the month of the specified Distribution 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 21.1.
Notice of any termination, specifying the Distribution 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 Distribution Date stating the amount of any such final
payment, and that the Record Date otherwise applicable to such Distribution 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 Distribution Date pursuant to
Section 14.5.
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
51
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 the 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 Seller.
Section 21.2 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. To exercise such option, the Servicer shall notify the Trustee,
the Paying Agent, and the Transfer Agent and Certificate Registrar and 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 aggregate Repurchase
Amount for the Receivables (including Defaulted Receivables) and shall succeed
to all interests in and to the Trust property. The payment shall be made in the
manner specified in Section 14.4, and shall be distributed pursuant to Section
14.5. 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 BBB and Baa3 by the Rating
Agencies 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 the Rating Agencies to the effect that such purchase will not
constitute a fraudulent transfer of assets of the Servicer under applicable
state and federal law.
ARTICLE XXII
Miscellaneous Provisions
Section 22.1 Amendment. The Agreement may be amended by the Seller, 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 the Agreement which may be inconsistent with any other provision
herein or therein, to evidence a succession to the Servicer or the Seller
pursuant to the Agreement or to add any other provisions with respect to matters
or questions arising under the Agreement that shall not be inconsistent with the
provisions of the 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 22.7(i) of the
Agreement.
The Agreement may also be amended from time to time by the Seller, 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
the Agreement, or of modifying in any manner the rights of the
Certificateholders (including effecting a transfer or assignment in compliance
with Section 22.7(ii) of the Agreement); provided, however, that no such
amendment, except with the consent of the Holders of all Certificates then
52
outstanding, shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing 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 XIV hereof or change the formula
for determining the Specified Reserve Account Balance.
Promptly after the execution of any amendment or consent referred to in
this Section 22.1, 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 22.1 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 the 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 the Agreement. The
Trustee shall not be obligated to enter into any such amendment which affects
the Trustee's own rights, duties or immunities under the 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 22.1, the Servicer shall have received written notice from each of the
Rating Agencies that the rating of the Certificates will not be reduced or
withdrawn as a result of such amendment.
Section 22.2 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 the 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 Seller nor the Servicer shall change its name, identity, or
corporate structure in any manner that would, could, or might make any financing
statement or continuation statement filed by the Servicer in accordance with
paragraph (a) above seriously misleading within the meaning of 'SS' 9-402(7) of
the UCC, unless it shall have given the Trustee at least 30 days prior written
notice thereof.
(c) The Seller and the Servicer shall give the Trustee at least 60 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.
53
(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 Certificate Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under the 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 Seller 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 Seller 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 the 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 the Agreement, an Opinion of Counsel
either (a) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Trust in the
Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (b) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest; and
(2) on March 31 of each year, commencing with March 31, 2000, an Opinion of
Counsel, dated as of such date, either (a) stating that, in the opinion of such
counsel, all financing statements and continuation statements have been executed
and filed that are necessary fully to preserve and protect the interest of 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.
54
(j) The Servicer shall, to the extent required by applicable law, cause the
Certificates to be registered with the Securities and Exchange Commission
pursuant to Section 12(b) or Section 12(g) of the Securities Exchange Act of
1934 within the time periods specified in such sections.
(k) For the purpose of facilitating the execution of the Agreement and for
other purposes, the 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 22.3 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate the 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 the Agreement or any of
them.
No Certificateholder shall have any right to vote (except as provided in
Section 19.1, Section 19.4, Section 22.1 and this Section 22.3) or in any manner
otherwise control the operation and management of the Trust, or the obligations
of the parties to the Agreement, nor shall anything set forth in the 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 the Agreement.
No Certificateholder shall have any right by virtue or by availing itself
of any provision of the Agreement to institute any suit, action, or proceeding
in equity or at law upon or under or with respect to the Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, 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 the 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 the 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 the
Agreement, except in the manner provided in the Agreement and for the equal,
ratable, and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 22.3, each Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 22.4 Governing Law. THE 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 THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 22.5 Notices. All demands, notices, and communications under the
Agree ment 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
55
receipt (a) 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, (b) 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: (210)
498-7210, or at such other address as shall be designated by the Servicer in a
written notice to the Trustee, and (c) in the case of the Trustee and the
Collateral Agent, at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Structured Finance Services, Telecopy Number: (000) 000-0000 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 the Agreement shall be conclusively presumed to have been duly given, whether
or not the Certificateholder shall receive such notice.
Section 22.6 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of the 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 the Agreement and shall in no way affect the validity or
enforceability of the other provisions of the Agreement or of the Certificates
or the rights of the Holders thereof.
Section 22.7 Assignment. Notwithstanding anything to the contrary contained
herein, except as provided in Sections 17.3 and 18.3, neither the Seller nor the
Servicer may transfer or assign all, or a portion of, its rights, obligations
and duties under the Agreement unless such transfer or assignment (i) (A) will
not result in a reduction or withdrawal by Standard & Poor's or Moody's of the
rating then assigned to the Certificates and (B) the Trustee has consented to
such transfer or assign ment, 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 Servicer's rights, duties and
obligations under the 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 22.8 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 16.2, each Certificate shall be
deemed fully paid.
Section 22.9 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Certificateholders and
the Certificate Owners and their respective successors and permitted assigns.
Except as otherwise provided in this Agreement, no other person will have any
right or obligation hereunder.
56
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 FEDERAL SAVINGS BANK,
as Seller and Servicer
By:__________________________
Name: Xxxxx X. XxXxxxxxx
Title: Vice President
The Bank of New York,
as Trustee
By:___________________________
Name:
Title:
SCHEDULE A
SCHEDULE A shall be deemed to be the computer data disk or printout relating to
the Receivables delivered by the Seller to the Trustee on the Closing Date.
A-1
SCHEDULE B
Location of Receivable Files
----------------------------
USAA Federal Savings Bank
00000 XxXxxxxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000
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 1999-1
___% AUTOMOBILE LOAN PASS-THROUGH CERTIFICATE, CLASS A
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 Federal Savings Bank.
(This Certificate does not represent an interest in or obligation of USAA
Federal Savings Bank or United Services Automobile Association or any of
their respective affiliates.)
NUMBER CUSIP ______
R-[ ]
$[ ]
Final Distribution Date:
____, ____, 20-
THIS CERTIFIES THAT CEDE & CO. 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 1999-1 (the "Trust") formed by USAA Federal Savings
Bank, a federally chartered savings association (the "Seller"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of __ __, 1999
(the "Agreement") between the Seller, acting as Seller and Servicer, and The
Bank of New York, National Association, 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 below. This Class A
Certificate is one of the duly authorized Certificates designated as "____%
Automobile Loan Pass-Through 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 simple interest 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 Cutoff Date,
security interests in the vehicles securing the Receivables (the "Financed
Vehicles"); such amounts as from time to time may be held in the Certificate
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 Seller 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.
A-1
Under the Agreement, there will be distributed on the 15th day of each
month or, if such 15th day is not a Business Day, the next succeeding Business
Day (a "Distribution Date"), commencing on __ __, 1999 , 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 all
amounts allocable to interest from any source with respect to each Receivable in
an amount equal to the Pass-Through Rate of ___% per annum on the Class A
Certificate Balance as of the preceding Distribution Date after giving effect to
any amounts distributed with respect to principal on such preceding Distribution
Date (calculated on the basis of a 360-day year comprised of twelve 30-day
months), and the aggregate amount allocable to principal from any source, 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 Seller 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.
A-2
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.
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 LOAN GRANTOR
TRUST 1999-1
The Bank of New York, National Association,
as Trustee
By:____________________________
Authorized Signatory
Dated: __ __, 1999
This is one of the Class A Certificates referred to in the within-mentioned
Agreement.
The Bank of New York, National Association,
as Trustee
By: _____________________
Authorized Signatory
A-3
USAA AUTO LOAN GRANTOR TRUST 1999-1
____% AUTOMOBILE LOAN PASS-THROUGH CERTIFICATES
The Class A Certificates do not represent an obligation of, or an interest
in, 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 Distribution 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
Distribution 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 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.
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 Seller,
such distribution to occur not later than three years from the date of the final
Distribution 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.
A-4
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 Distribution 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 Distribution Date as of which the Pool Balance is
equal to or less than 5% of the Original Pool Balance.
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.
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 1999-1
___% AUTOMOBILE LOAN PASS-THROUGH 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 Federal Savings Bank.
(This Certificate does not represent an interest in or obligation of USAA
Federal Savings Bank or United Services Automobile Association or any of
their respective affiliates.)
NUMBER CUSIP ____
R-[ ]
$[ ]
Final Distribution Date:
__ __, 20__
THIS CERTIFIES THAT CEDE & CO. 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 1999-1 (the "Trust") formed by USAA Federal Savings
Bank, a federally chartered savings association (the "Seller"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of __ __, 1999
(the "Agreement") between the Seller, acting as Seller and Servicer, and The
Bank of New York, National Association, 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 below. This Class B
Certificate is one of the duly authorized Certificates designated as "___%
Automobile Loan Pass-Through 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 simple interest 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 Cutoff Date,
security interests in the vehicles securing the Receivables (the "Financed
Vehicles"); such amounts as from time to time may be held in the Certificate
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 Seller 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.
B-1
Under the Agreement, there will be distributed on the 15th day of each
month or, if such 15th day is not a Business Day, the next succeeding Business
Day (each, a "Distribution Date"), commencing on __ __, 1999, 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 all
amounts allocable to interest from any source with respect to each Receivable in
an amount equal to the Pass-Through Rate of ___% per annum on the Class B
Certificate Balance as of the preceding Distribution Date after giving effect to
any amounts distributed with respect to principal on such preceding Distribution
Date (calculated on the basis of a 360-day year comprised of twelve 30-day
months), and the aggregate amount allocable to principal from any source, 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 Seller 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.
B-2
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.
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 LOAN GRANTOR
TRUST 1999-1
The Bank of New York, National Association,
as Trustee
By:____________________________
Dated: __ __, 1999
This is one of the Class B Certificates referred to in the within-mentioned
Agreement.
The Bank of New York, National Association,
as Trustee
By: _____________________
Authorized Signatory
B-3
USAA AUTO LOAN GRANTOR TRUST 1999-1
___% AUTOMOBILE LOAN PASS-THROUGH CERTIFICATES
The Class B Certificates do not represent an obligation of, or an interest
in, 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 Distribution 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
Distribution 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 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 Cutoff 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.
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 Seller,
such distribution to occur not later than three years from the date of the final
Distribution 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
B-4
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 Distribution 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 Distribution Date as of which the Pool Balance is
equal to or less than 5% of the Original Pool Balance.
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.
B-6
EXHIBIT C-1
Trustee's Certificate
pursuant to Section 20.3
of the Pooling and Servicing
Agreement
_____________________________________________(the "Trustee") of the USAA
Auto Loan Grantor Trust 1999-1 created pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of __ __, 1999,
between USAA Federal Savings Bank, as Seller (the "Seller") and Servicer, and
the Trustee, does hereby sell, transfer, assign, and otherwise convey to the
Seller, 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
Seller pursuant to Section 12.2 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 ____, 19__.
--------------------
C-1-1
EXHIBIT C-2
Trustee's Certificate
pursuant to Section 20.3
of the Pooling and Servicing
Agreement
_____________________________________ (the "Trustee") of the USAA Federal
Savings Grantor Trust 1999-1 created pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of __ __, 1999
between 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 13.7 or 21.2 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 ____, 19__.
-------------------
C-2-1
EXHIBIT D
USAA Auto Loan Grantor Trust 1999-1
___% Automobile Loan Pass-Through Certificates, Class A
____% Automobile Loan Pass-Through Certificates, Class B
SERVICER'S REPORT
D-1
Exhibit E
FORM OF CERTIFICATEHOLDER REPORT
USAA Auto Loan Grantor Trust 1999-1
___% Automobile Loan Pass-Through Certificates, Class A
___% Automobile Loan Pass-Through Certificates, Class B
On ________, 19__, interest earned and principal paid on the underlying assets
for the month of ____________, 19__ were paid to you in connection with the
above referenced issue. The following information is being provided pursuant to
Section 14.7 of the Pooling and Servicing Agreement, dated as of __ __, 1999.
This payment per $1000 of original issuance of your holdings is allocated as
follows:
1) Principal ________
2) Interest ________
Total per each individual certificate _______
3) Fees and Compensation paid to Servicer _______
(a) Total _______
(b) Per individual certificate _______
4) The amount deposited into the Cash
Collateral Account _______
5) Aggregate Unreimbursed Advances
Previous Month _______
Change From Previous Month _______
This Month _______
6) (a) Pool Balance before this payment _______
(b) Pool Factor before this payment _______
7) (a) Available Cash Collateral Amount _______
(b) % of Pool Balance _______
8) Required Cash Collateral Amount _______
E-1
EXHIBIT F
FORM OF YIELD SUPPLEMENT AGREEMENT
USAA Auto Loan Grantor Trust 1999-1
c/o The Bank of New York, National Association, as Trustee
and as Collateral Agent
------------
July __, 1999
Ladies and Gentlemen:
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, we (the "Seller") hereby confirm arrangements made as
of the date hereof with you (the "Trust") to be effective upon receipt by the
Seller 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 Distribution Date,
the Servicer shall notify the Trust and the Seller of the Yield Supplement
Amount for such Distribution Date.
2. The Seller agrees to establish a Yield Supplement Account pursuant to
Article XV of the Pooling and Servicing Agreement, dated as of July __, 1999 (as
amended, supplemented or otherwise modified and in effect from time to time, the
"Pooling and Servicing Agreement") by and among the Seller, in its individual
capacity and as a Servicer thereunder (the "Servicer") and The Bank of New York,
National Association, as trustee thereunder (the "Trustee"), and the Seller
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 15.1 hereof, prior to 11:00 A.M. on each Distribution
Date. If and to the extent that such amounts shall not have been paid by the
Seller in full at or prior to 11:00 A.M. (New York time), then, in such event,
pursuant to Sections 15.2(d) and (f) 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
Certificate 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 Seller prior to
the relevant Distribution 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.
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
F-2
or the Seller. 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 Loan Grantor Trust 1999-1
c/o The Bank of New York, National Association,
as Trustee
-------------
-----------
Attention: Corporate Trust Department
Telecopy: ()
F-3
The Seller:
USAA Federal Savings Bank
00000 XxXxxxxxx Xxxxxxx__________________
Xxx Xxxxxxx, XX 78288__________________
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]
F-4
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 FEDERAL SAVINGS BANK
By: _______________________
Name:
Title:
Agreed and accepted as of
the date first above written:
USAA AUTO LOAN GRANTOR TRUST 1999-1
By: The Bank of New York, National Association,
as Trustee and as Collateral Agent
------------------------
Authorized Signatory
ANNEX I
USAA FEDERAL SAVINGS BANK
Seller and Servicer
Standard Terms and Conditions of Agreement
Effective __ __, 1999
A-I
TABLE OF CONTENTS
Section Page
ARTICLE I
Section 1.1 Creation of Trust............................................ 1
ARTICLE II
Section 2.1 Conveyance of Receivables.................................... 2
ARTICLE III
[Reserved] . . . . . . . . . . . 3
ARTICLE IV
Section 4.1 Acceptance by Trustee........................................ 3
ARTICLE V
Section 5.1 Incorporation of Standard Terms and Conditions of Agreement.. 4
ARTICLE VI
Section 6.1 Special Definitions and Terms................................ 4
ARTICLE VII
Section 7.1 Additional Representations and Warranties of Seller.......... 5
ARTICLES VIII-X
[Reserved]................................................... 7
ARTICLE XI (Attached as ANNEX I)
Definitions
Section 11.1 Definitions................................................ I-1
Section 11.2 Usage of Terms. ......................................... I-11
Section 11.3 Simple Interest Method; Allocations....................... I-11
Section 11.4 References................................................ I-11
Section 11.5 Section References........................................ I-12
Section 11.6 Separate Agreements....................................... I-12
i
ARTICLE XII
The Receivables
Section 12.1 Representations and Warranties of Seller; Conditions Relating to Receivables.. 31
Section 12.2 Repurchase Upon Breach or Failure of a Condition............................... 35
Section 12.3 Custody of Receivable Files.................................................... 36
Section 12.4 Duties of Servicer as Custodian................................................ 37
Section 12.5 Instructions; Authority to Act................................................. 38
Section 12.6 Custodian's Indemnification.................................................... 38
Section 12.7 Effective Period and Termination............................................... 39
ARTICLE XIII
Administration and Servicing of Receivables
Section 13.1 Duties of Servicer............................................................. 40
Section 13.2 Collection of Receivable Payments.............................................. 40
Section 13.3 Realization Upon Receivables................................................... 41
Section 13.4 [Reserved]..................................................................... 42
Section 13.5 Maintenance of Security Interests in Financed Vehicles......................... 42
Section 13.6 Covenants of Servicer.......................................................... 43
Section 13.7 Purchase of Receivables Upon Breach............................................ 44
Section 13.8 Servicing Fee.................................................................. 44
Section 13.9 Servicer's Certificate......................................................... 45
Section 13.10 Annual Statement as to Compliance............................................. 46
Section 13.11 Annual Audit Report........................................................... 46
Section 13.12 Access to Certain Documentation and Information Regarding Receivables......... 47
Section 13.13 Reports to Certificateholders and the Rating Agencies......................... 47
Section 13.14 Insurance..................................................................... 48
ARTICLE XIV
Distributions; Statements to Certificateholders
Section 14.1 Accounts....................................................................... 48
Section 14.2 Collections.................................................................... 52
Section 14.3 Advances....................................................................... 52
Section 14.4 Additional Deposits............................................................ 53
Section 14.5 Distributions.................................................................. 54
Section 14.6 Reserve Account................................................................ 56
Section 14.7 Net Deposits................................................................... 57
Section 14.8 Statements to Certificateholders............................................... 57
ARTICLE XV
Yield Supplement Agreement
Section 15.1 Yield Supplement Agreement...................................................... 59
Section 15.2 Yield Supplement Account....................................................... 59
ii
ARTICLE XVI
The Certificates
Section 16.1 The Certificates............................................................... 60
Section 16.2 Execution, Authentication and Delivery of Certificates........................ 60
Section 16.3 Registration of Transfer and Exchange of Certificates.......................... 61
Section 16.4 Mutilated, Destroyed, Lost, or Stolen Certificates............................. 62
Section 16.5 Persons Deemed Owners.......................................................... 63
Section 16.6 Access to List of Certificateholders' Names and Addresses...................... 63
Section 16.7 Maintenance of Office or Agency................................................ 64
Section 16.8 Book-Entry Certificates........................................................ 64
Section 16.9 Notices to Clearing Agency..................................................... 66
Section 16.10 Definitive Certificates....................................................... 66
Section 16.11 Appointment of Paying Agent................................................... 67
Section 16.12 Authenticating Agent.......................................................... 68
Section 16.13 Actions of Certificateholders................................................. 70
ARTICLE XVII
The Seller
Section 17.1 Representations of Seller...................................................... 72
Section 17.2 Liability of Seller; Indemnities............................................... 74
Section 17.3 Merger or Consolidation of Seller.............................................. 74
Section 17.4 Limitation on Liability of Seller and Others.................................. 75
Section 17.5 Seller May Own Certificates.................................................... 75
ARTICLE XVIII
The Servicer
Section 18.1 Representations of Servicer.................................................... 76
Section 18.2 Liability of Servicer; Indemnities............................................. 78
Section 18.3 Merger or Consolidation of Servicer............................................ 79
Section 18.4 Limitation on Liability of Servicer and Others................................. 80
Section 18.5 Servicer Not To Resign......................................................... 81
Section 18.6 Delegation of Duties........................................................... 82
ARTICLE XIX
Events of Servicing Termination
Section 19.1 Events of Servicing Termination................................................ 83
Section 19.2 Trustee to Act; Appointment of Successor...................................... 85
Section 19.3 Notification to Certificateholders............................................. 86
Section 19.4 Waiver of Past Defaults........................................................ 86
iii
ARTICLE XX
The Trustee
Section 20.1 No Power to Engage in Business or to Vary Investments.......................... 88
Section 20.2 Duties of Trustee.............................................................. 88
Section 20.3 Trustee's Assignment of Repurchased Receivables and Trustee's Certificate...... 91
Section 20.4 Certain Matters Affecting the Trustee.......................................... 91
Section 20.5 Trustee Not Liable for Certificates or Receivables..............................94
Section 20.6 Trustee May Own Certificates....................................................95
Section 20.7 Trustee's Fees and Expenses.....................................................96
Section 20.8 Indemnity.......................................................................97
Section 20.9 Eligibility Requirements for Trustee............................................98
Section 20.10 Resignation or Removal of Trustee..............................................98
Section 20.11 Successor Trustee..............................................................99
Section 20.12 Merger or Consolidation of Trustee............................................100
Section 20.13 Appointment of Co-Trustee or Separate Trustee.................................100
Section 20.14 Representations and Warranties of Trustee.....................................102
Section 20.15 Tax Returns...................................................................103
Section 20.16 Trustee May Enforce Claims Without Possession of Certificates.................104
Section 20.17 Suits for Enforcement.........................................................104
Section 20.18 Maintenance of Office or Agency...............................................104
ARTICLE XXI
Termination
Section 21.1 Termination of the Trust.......................................................105
Section 21.2 Optional Purchase of All Receivables...........................................106
ARTICLE XXII
Miscellaneous Provisions
Section 22.1 Amendment......................................................................108
Section 22.2 Protection of Title to Trust...................................................109
Section 22.3 Limitation on Rights of Certificateholders.....................................112
Section 22.4 Governing Law..................................................................113
Section 22.5 Notices........................................................................113
Section 22.6 Severability of Provisions.....................................................114
Section 22.7 Assignment.....................................................................114
Section 22.8 Certificates Nonassessable and Fully Paid......................................114
Section 22.9 Third-Party Beneficiaries......................................................115
iv
SCHEDULES and EXHIBITS
Schedule A: Schedule of Receivables
Schedule B: Locations of Receivable Files
Exhibit A: Form of Class A Certificate
Exhibit B: Form of Class B Certificate
Exhibit C-1:
Exhibit C-2:
Exhibit D:
Exhibit E: Form of Certificateholder Report
Exhibit F: Form of Yield Supplement Agreement
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