Exhibit 4.1
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USAA ACCEPTANCE, LLC
Depositor
USAA FEDERAL SAVINGS BANK
Seller and Servicer
and
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Trustee and Collateral Agent
on behalf of the Certificateholders
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FORM OF POOLING AND SERVICING AGREEMENT
Dated as of ________ __, ______
$____________
USAA Auto Grantor Trust ______
_____% Asset Backed Certificates, Class A
_____% Asset Backed Certificates, Class B
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Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.........................................................................1
Section 1.2 Usage of Terms.....................................................................14
Section 1.3 Simple Interest Method; Allocations................................................14
Section 1.4 References.........................................................................14
Section 1.5 Section References.................................................................14
ARTICLE II
Section 2.1 Creation of Trust..................................................................14
ARTICLE III
Section 3.1 Conveyance of Receivables..........................................................15
ARTICLE IV
Section 4.1 Acceptance by Trustee..............................................................15
ARTICLE V
THE RECEIVABLES
Section 5.1 Representations and Warranties of Depositor; Conditions Relating to
Receivables........................................................................16
Section 5.2 Repurchase Upon Breach or Failure of a Condition...................................19
Section 5.3 Custody of Receivable Files........................................................19
Section 5.4 Duties of Servicer as Custodian....................................................20
Section 5.5 Instructions; Authority to Act.....................................................21
Section 5.6 Custodian's Indemnification........................................................21
Section 5.7 Effective Period and Termination...................................................21
ARTICLE VI
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 6.1 Duties of Servicer.................................................................22
Section 6.2 Collection of Receivable Payments..................................................22
Section 6.3 Realization Upon Receivables.......................................................23
Section 6.4 Maintenance of Security Interests in Financed Vehicles.............................23
Section 6.5 Covenants of Servicer..............................................................24
Section 6.6 Purchase of Receivables Upon Breach................................................24
Section 6.7 Servicing Fee......................................................................25
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Section 6.8 Servicer's Certificate.............................................................25
Section 6.9 Annual Statement as to Compliance..................................................25
Section 6.10 Annual Audit Report................................................................26
Section 6.11 Reports to Certificateholders and the Rating Agencies..............................26
Section 6.12 Insurance..........................................................................27
ARTICLE VII
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 7.1 Accounts...........................................................................27
Section 7.2 Collections........................................................................29
Section 7.3 Advances...........................................................................29
Section 7.4 Additional Deposits................................................................30
Section 7.5 Distributions......................................................................30
Section 7.6 Reserve Account....................................................................32
Section 7.7 Net Deposits.......................................................................32
Section 7.8 Statements to Certificateholders...................................................32
ARTICLE VIII
YIELD SUPPLEMENT AGREEMENT
Section 8.1 Yield Supplement Agreement.........................................................33
Section 8.2 Yield Supplement Account...........................................................34
ARTICLE IX
THE CERTIFICATES
Section 9.1 The Certificates...................................................................36
Section 9.2 Execution, Authentication and Delivery of Certificates.............................36
Section 9.3 Registration of Transfer and Exchange of Certificates..............................36
Section 9.4 Mutilated, Destroyed, Lost, or Stolen Certificates.................................38
Section 9.5 Persons Deemed Owners..............................................................38
Section 9.6 Access to List of Certificateholders' Names and Addresses..........................38
Section 9.7 Maintenance of Office or Agency....................................................39
Section 9.8 Book-Entry Certificates............................................................39
Section 9.9 Notices to Clearing Agency.........................................................40
Section 9.10 Definitive Certificates............................................................40
Section 9.11 Appointment of Paying Agent........................................................41
Section 9.12 Authenticating Agent...............................................................41
Section 9.13 Actions of Certificateholders......................................................43
ARTICLE X
THE DEPOSITOR
Section 10.1 Representations of Depositor.......................................................44
Section 10.2 Liability of Depositor; Indemnities................................................45
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Section 10.3 Merger or Consolidation of Depositor...............................................45
Section 10.4 Limitation on Liability of Depositor and Others....................................45
Section 10.5 Depositor May Own Certificates.....................................................46
ARTICLE XI
THE SERVICER
Section 11.1 Representations of Servicer........................................................46
Section 11.2 Liability of Servicer; Indemnities.................................................47
Section 11.3 Merger or Consolidation of Servicer................................................48
Section 11.4 Limitation on Liability of Servicer and Others.....................................48
Section 11.5 Servicer Not To Resign.............................................................50
Section 11.6 Delegation of Duties...............................................................50
ARTICLE XII
EVENTS OF SERVICING TERMINATION
Section 12.1 Events of Servicing Termination....................................................50
Section 12.2 Trustee to Act; Appointment of Successor...........................................52
Section 12.3 Notification to Certificateholders.................................................52
Section 12.4 Waiver of Past Defaults............................................................52
ARTICLE XIII
THE TRUSTEE
Section 13.1 No Power to Engage in Business or to Vary Investments..............................53
Section 13.2 Duties of Trustee..................................................................53
Section 13.3 Trustee's Assignment of Repurchased Receivables and Trustee's Certificate..........55
Section 13.4 Certain Matters Affecting the Trustee..............................................55
Section 13.5 Trustee Not Liable for Certificates or Receivables.................................57
Section 13.6 Trustee May Own Certificates.......................................................58
Section 13.7 Trustee's Fees and Expenses........................................................58
Section 13.8 Indemnity..........................................................................59
Section 13.9 Eligibility Requirements for Trustee...............................................59
Section 13.10 Resignation or Removal of Trustee..................................................59
Section 13.11 Successor Trustee..................................................................60
Section 13.12 Merger or Consolidation of Trustee.................................................60
Section 13.13 Appointment of Co-Trustee or Separate Trustee......................................61
Section 13.14 Representations and Warranties of Trustee..........................................62
Section 13.15 Tax Returns........................................................................63
Section 13.16 Trustee May Enforce Claims Without Possession of Certificates......................63
Section 13.17 Suits for Enforcement..............................................................63
Section 13.18 Maintenance of Office or Agency....................................................63
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ARTICLE XIV
TERMINATION
Section 14.1 Termination of the Trust...........................................................64
Section 14.2 Optional Purchase of All Receivables...............................................65
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Amendment..........................................................................65
Section 15.2 Protection of Title to Trust.......................................................66
Section 15.3 Limitation on Rights of Certificateholders.........................................68
Section 15.4 Governing Law......................................................................69
Section 15.5 Notices............................................................................69
Section 15.6 Severability of Provisions.........................................................69
Section 15.7 Assignment.........................................................................69
Section 15.8 Certificates Nonassessable and Fully Paid..........................................70
Section 15.9 Third-Party Beneficiaries..........................................................70
Schedule A:.......List of Receivables
Schedule B:.......Location of Receivables Files
Exhibit A:........Form of Class A Certificate
Exhibit B:........Form of Class B Certificate
Exhibit C-1:......Trustee's Certificate
Exhibit C-2:......Trustee's Certificate
Exhibit D:........Servicer's Report
Exhibit E:........Form of Certificateholder Report
Exhibit F:........Form of Yield Supplement Agreement
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This Pooling and Servicing Agreement, dated as of _____ __, ______, is
made with respect to the formation of the USAA Auto Grantor Trust ______ (the
"Trust"), among USAA Acceptance, LLC, a Delaware limited liability company (the
"Depositor"), USAA Federal Savings Bank, a federally chartered savings
association (the "Seller" and the "Servicer" in its respective capacities as
such), and _________________, a banking corporation organized under the laws of
the State of _____________, as trustee (the "Trustee") and as collateral agent
with respect to the Reserve Account and the Yield Supplement Account (in such
capacity, the "Collateral Agent").
WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Account Property" means the Reserve Account, the Yield Supplement
Account and all amounts, Financial Assets and other investments held from time
to time in the Reserve Account and the Yield Supplement Account and all proceeds
of the foregoing.
"Advance" as of a Record Date means any payment made by the Servicer
pursuant to Section 7.3.
"Agent" means any of the Paying Agent, the Collateral Agent, the
Authenticating Agent and the Transfer Agent.
"Agreement" means this Pooling and Servicing Agreement and all
amendments and supplements hereto.
"Amount Financed" in respect of a Receivable means the amount advanced
under the Receivable toward the purchase price of the Financed Vehicle and
related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of interest stated in the Receivable.
"Authenticating Agent" shall have the meaning specified in Section
9.12.
"Authorized Officer" means any officer in the Corporate Trust
Department of the Trustee with direct responsibility for the administration of
this Agreement.
"Available Interest" means, with respect to any Payment Date, the
excess of (a) the sum of (i) Interest Collections for such Payment Date, [(ii)
the Yield Supplement Amount for such Payment Date] and (iii) all Advances made
by the Servicer with respect to such Payment Date
pursuant to Section 7.3(a), over (b) the amount of Outstanding Advances to be
reimbursed on or with respect to such Payment Date pursuant to Section 7.3(a).
"Available Principal" means, with respect to any Payment Date, the sum
of the following amounts with respect to the preceding Collection Period: (i)
that portion of all Collections on the Receivables received during such
Collection Period and allocable to principal in accordance with the terms of the
Receivables and the Servicer's customary servicing procedures, (ii) to the
extent attributable to principal, the Purchase Amount received with respect to
each Receivable repurchased by the Depositor or purchased by the Servicer under
an obligation which arose during the related Collection Period and (iii)
Liquidation Proceeds, to the extent allocable to principal, received during such
Collection Period. Available Principal on any Payment Date shall exclude all
payments and proceeds of any Receivables the Purchase Amount of which has been
distributed on a prior Payment Date.
"Available Reserve Amount" means, as of any Payment Date, the lesser of
(i) the amount on deposit in the Reserve Account (exclusive of earnings and
income from the investment of funds therein) as of such date and (ii) the
Specified Reserve Account Balance as of such date.
"Book-Entry Certificates" means beneficial interests in the
Certificates described in Section 9.8, the ownership and transfers of which
shall be made through book entries by a Clearing Agency as described in Section
9.8.
"Business Day" means a day, other than a Saturday or a Sunday, on which
banking institutions or trust companies located in the State of New York and the
State of Texas are open for the purpose of conducting a commercial banking
business.
"Certificate" means any Class A Certificate or Class B Certificate.
"Certificateholder" or "Holder" means the Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent, request, waiver or demand pursuant to this
Agreement, the interest evidenced by any Certificate registered in the name of
the Depositor, the Servicer or any Person controlling, controlled by, or under
common control with the Depositor or the Servicer shall not be taken into
account in determining whether the requisite percentage necessary to effect any
such consent, request or waiver shall have been obtained; provided, however,
that in determining whether the Trustee shall be protected in relying upon any
such consent, request, waiver or demand, only Certificates that an Authorized
Officer of the Trustee knows to be so owned shall be so disregarded.
"Certificate Owner" means, with respect to a Book-Entry Certificate,
the Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a direct or indirect Clearing
Agency Participant.
"Certificate Register" means the register maintained pursuant to
Section 9.3.
"Class A Certificate" means a certificate executed by the Trustee on
behalf of the Trust and authenticated by the Trustee, substantially in the form
of Exhibit A hereto.
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"Class A Certificateholder" or "Class A Holder" means the Person in
whose name a Class A Certificate shall be registered in the Certificate
Register, except that, solely for the purpose of giving any consent, request or
waiver pursuant to this Agreement, the interest evidenced by any Class A
Certificate registered in the name of the Depositor, the Servicer or any Person
actually known to an Authorized Officer of the Trustee to be an Affiliate of the
Depositor or the Servicer shall not be taken into account in determining whether
the requisite percentage necessary to effect any such consent, request or waiver
shall have been obtained.
"Class A Certificate Balance" means, at any time, the Original Class A
Certificate Balance, as reduced by all principal amounts distributed to Class A
Certificateholders prior to such time.
"Class A Certificate Owner" means, with respect to a Book-Entry
Certificate representing a beneficial interest in the Class A Certificates, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant in accordance
with the rules, regulations and procedures of such Clearing Agency).
"Class A Distribution Account" means the account established and
maintained as such pursuant to Section 7.1.
"Class A Interest Carryover Shortfall" means, (i) with respect to the
initial Payment Date, zero and (ii) with respect to any other Payment Date, the
excess of Class A Monthly Interest for the preceding Payment Date, and any
outstanding Class A Interest Carryover Shortfall on such preceding Payment Date,
over the amount in respect of interest that is actually deposited in the Class A
Distribution Account on such preceding Payment Date, plus 30 days of interest on
such excess, to the extent permitted by law, at the Class A Pass-Through Rate.
"Class A Interest Distribution" means, with respect to any Payment
Date, the sum of Class A Monthly Interest for such Payment Date and the Class A
Interest Carryover Shortfall for such Payment Date.
"Class A Monthly Interest" means, with respect to any Payment Date,
one-twelfth (or in the case of the first Payment Date, ____) of the Class A
Pass-Through Rate multiplied by the Class A Certificate Balance as of the
preceding Payment Date (after giving effect to all payments of principal made on
such Payment Date) or, in the case of the first Payment Date, as of the Closing
Date.
"Class A Monthly Principal" means, with respect to any Payment Date,
the Class A Percentage of Available Principal for such Payment Date plus the
Class A Percentage of Realized Losses with respect to the related Collection
Period.
"Class A Pass-Through Rate" means ____% per annum, calculated on the
basis of a 360-day year comprised of twelve 30-day months.
"Class A Percentage" means ____%.
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"Class A Pool Factor" means, with respect to any Payment Date, the
Class A Certificate Balance as of such Payment Date (after giving effect to all
payments of principal to be made on such Payment Date) divided by the Original
Class A Certificate Balance, expressed as a seven-digit decimal.
"Class A Principal Carryover Shortfall" means, (i) with respect to the
initial Payment Date, zero and (ii) with respect to any other Payment Date, the
excess of (x) Class A Monthly Principal for such Payment Date and (y) any
outstanding Class A Principal Carryover Shortfall from the preceding Payment
Date over the amount in respect of principal that is actually deposited in the
Class A Distribution Account on such Payment Date.
"Class A Principal Distribution" means, (i) with respect to the initial
Payment Date, the Class A Monthly Principal for such Payment Date and (ii) with
respect to any other Payment Date, the sum of Class A Monthly Principal for such
Payment Date and the Class A Principal Carryover Shortfall as of the preceding
Payment Date. In addition, on the Final Scheduled Payment Date, the Class A
Principal Distribution shall include any additional amount required to reduce
the outstanding principal balance of the Class A Certificates to zero.
"Class B Certificate" means a certificate executed by the Trustee on
behalf of the Trust and authenticated by the Trustee, substantially in the form
of Exhibit B hereto.
"Class B Certificateholder" or "Class B Holder" means the Person in
whose name a Class B Certificate shall be registered in the Certificate
Register, except that, solely for the purpose of giving any consent, request or
waiver pursuant to this Agreement, the interest evidenced by any Class B
Certificate registered in the name of the Depositor, the Servicer or any Person
actually known to an Authorized Officer of the Trustee to be an Affiliate of the
Depositor or the Servicer shall not be taken into account in determining whether
the requisite percentage necessary to effect any such consent, request or waiver
shall have been obtained.
"Class B Certificate Balance", at any time, equals the Original Class B
Certificate Balance, as reduced by all principal amounts distributed to Class B
Certificateholders prior to such time.
"Class B Certificate Owner" means, with respect to a Book-Entry
Certificate representing a beneficial interest in the Class B Certificates, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant in accordance
with the rules, regulations and procedures of such Clearing Agency).
"Class B Distribution Account" means the account established and
maintained as such pursuant to Section 7.1.
"Class B Interest Carryover Shortfall" means, (i) with respect to the
initial Payment Date, zero and (ii) with respect to any other Payment Date, the
excess of Class B Monthly Interest for the preceding Payment Date, and any
outstanding Class B Interest Carryover Shortfall on such preceding Payment Date,
over the amount in respect of interest that is actually deposited in the
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Class B Distribution Account on such preceding Payment Date, plus 30 days of
interest on such excess, to the extent permitted by law, at the Class B
Pass-Through Rate.
"Class B Interest Distribution" means, with respect to any Payment
Date, the sum of Class B Monthly Interest for such Payment Date and the Class B
Interest Carryover Shortfall for such Payment Date.
"Class B Monthly Interest" means, with respect to any Payment Date,
one-twelfth (or in the case of the first Payment Date, ____) of the Class B
Pass-Through Rate multiplied by the Class B Certificate Balance as of the
preceding Payment Date (after giving effect to all payments of principal made on
such Payment Date) or, in the case of the first Payment Date, as of the Closing
Date.
"Class B Monthly Principal" means, with respect to any Payment Date,
the Class B Percentage of Available Principal for such Payment Date plus the
Class B Percentage of Realized Losses with respect to the related Collection
Period.
"Class B Pass-Through Rate" means ___% per annum, calculated on the
basis of a year of twelve 30-day months.
"Class B Percentage" means ____%.
"Class B Pool Factor" means, with respect to any Payment Date, the
Class B Principal Balance as of such Payment Date (after giving effect to all
payments of principal to be made on such Payment Date) divided by the Original
Class B Certificate Balance, expressed as a seven-digit decimal.
"Class B Principal Carryover Shortfall" means, (i) with respect to the
initial Payment Date, zero and (ii) with respect to any other Payment Date, the
excess of the sum of (x) Class B Monthly Principal for such Payment Date (y) and
any outstanding Class B Principal Carryover Shortfall from the preceding Payment
Date over the amount in respect of principal that is actually deposited in the
Class B Distribution Account on such Payment Date.
"Class B Principal Distribution" means, (i) with respect to the initial
Payment Date, the Class B Monthly Principal for such Payment Date and (ii) with
respect to any other Payment Date, the sum of Class B Monthly Principal for such
Payment Date and the Class B Principal Carryover Shortfall as of the preceding
Payment Date. In addition, on the Final Scheduled Payment Date, the Class B
Principal Distribution shall include any additional amount required to reduce
the outstanding principal balance of the Class B Certificates to zero.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The initial Clearing Agency shall be The Depository Trust Company.
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"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers of securities deposited with the Clearing
Agency.
"Closing Date" means _______.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means _________________, a ________________, in its
capacity as collateral agent for the benefit of the Certificateholders with
respect to the Reserve Account and the Yield Supplement Account.
"Collection Account" means the account established and maintained
pursuant to Section 7.1.
"Collection Period" means, during the term of this Agreement, the
calendar month preceding each Payment Date, or in the case of the initial
Collection Period, the period from the Cut-off Date to __________. With respect
to any Determination Date, Deposit Date or Payment Date, the "related Collection
Period" shall mean the Collection Period preceding the month in which such
Determination Date, Deposit Date or Payment Date occurs.
"Collections" mean all collections on the Receivables.
"Contract Rate" means, with respect to a Receivable, the rate per annum
of interest charged to the Obligor on the outstanding Principal Balance of such
Receivable in accordance with the terms thereof.
"Corporate Trust Office" means the office of the Trustee at _______ or
such office at some other address as the Trustee may designate from time to time
by notice to the Certificateholders, the Depositor, the Servicer, the Paying
Agent, the Transfer Agent and Certificate Registrar.
"Cut-off Date" means _______.
"Cut-off Date Principal Balance" means, with respect to any Receivable,
the initial Principal Balance of such Receivable minus the sum of the portion of
all payments received under such Receivable from or on behalf of the related
Obligor prior to the close of business by the Servicer on the day prior to the
Cut-off Date and allocable to principal in accordance with the terms of the
Receivable and the Servicer's customary servicing practices.
"Defaulted Receivable" means a Receivable (other than a Repurchased
Receivable) as to which either (i) more than 5% of a scheduled payment is 120 or
more days delinquent as of the last day of the applicable Collection Period or
(ii) the Servicer has determined based on its usual collection practices and
procedures, during any Collection Period, that eventual payment in full of the
Amount Financed is unlikely, whichever occurs first.
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"Definitive Certificates" shall have the meaning specified in Section
9.8.
"Deposit Date" means the Business Day immediately preceding each
Payment Date.
"Depositor" shall mean USAA Acceptance, LLC, a Delaware limited
liability company, as the depositor of the Receivables under this Agreement, and
each successor to USAA Acceptance, LLC pursuant to Section 10.3.
"Depository Agreement" shall mean the agreement among the Depositor,
the Trustee and the initial Clearing Agency, substantially in the form attached
hereto as Exhibit F.
"Determination Date" means the __th calendar day of the month (or, if
such 10th calendar day is not a Business Day, the Business Day preceding such
__th calendar day) immediately succeeding the related Collection Period.
"Entitlement Order" has the meaning specified in Section 8-102(a)(8) of
the UCC.
"Event of Servicing Termination" means an event specified in Section
12.1.
"Excess Funds" shall have the meaning specified in Section 7.5(d).
"Xxxxxx Xxx" means Xxxxxx Mae or any successor thereto.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation or any
successor thereto.
"Final Scheduled Payment Date" means _______.
"Financed Vehicle" with respect to a Receivable means the new or used
automobile or light-duty truck, together with all accessions thereto, securing
an Obligor's indebtedness under such Receivable.
"Financial Asset" has the meaning specified in Section 8-102(a)(9) of
the UCC.
"Interest Collections" mean, with respect to any Payment Date, the sum
of the following amounts for the preceding Collection Period: (i) that portion
of the Collections on the Receivables received during such Collection Period
that is allocable to interest in accordance with the terms of the Receivables
and the Servicer's customary servicing procedures, (ii) Liquidation Proceeds, to
the extent allocable to interest, received during such Collection Period, (iii)
all Recoveries and (iv) to the extent attributable to interest, the Purchase
Amount received with respect to each Receivable repurchased by the Depositor or
purchased by the Servicer under an obligation which arose during the related
Collection Period. "Interest Collections" for any Payment Date shall exclude all
payments and proceeds of any Receivables the Purchase Amount of which has been
distributed on a prior Payment Date.
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"Lien" means a security interest, lien, charge, pledge or encumbrance
of any kind other than tax liens, mechanics' liens or any other liens that
attach to a Receivable by operation of law.
"Liquidation Proceeds" means (i) insurance proceeds received by the
Servicer and (ii) the monies collected by the Servicer (from whatever source,
including but not limited to proceeds of a Financed Vehicle which is sold after
repossession) during a Collection Period on a Defaulted Receivable net of any
payments required by law to be remitted to the Obligor.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Obligor" on a Receivable means the purchaser or the co-purchasers of
the Financed Vehicle purchased in part or in whole by the execution and delivery
of such Receivable or any other Person who owes or may be liable for payments
under such Receivable.
"Officer's Certificate" means a certificate signed by the chairman of
the board, the president, the treasurer, the controller, any executive or senior
vice president or any vice president of the Depositor or Servicer, as
appropriate.
"Opinion of Counsel" means a written opinion of counsel (who may be
counsel to the Depositor or the Servicer) acceptable in form and substance to
the Trustee.
"Optional Purchase Percentage" means _____________%.
"Original Pool Balance" means $_____________.
"Original Pool Balance" means the Pool Balance as of the Cut-off Date,
as specified in this Agreement.
"Outstanding Advances" means, as of any date, the aggregate of all
Advances made by the Servicer with respect to prior Payment Dates which have not
been reimbursed pursuant to Section 7.3.
"Outstanding Receivable" means, as of the time of reference thereto, a
Receivable that (i) has not been fully paid, (ii) has not become a Defaulted
Receivable, and (iii) has not become a Repurchased Receivable.
"Paying Agent" shall have the meaning specified in Section 9.11 and
shall initially be _________________.
"Payment Date" means, for each Collection Period, the __th day of
the following month, or if the __th day is not a Business Day, the next
following Business Day, commencing on _________, ___.
"Permitted Investments" means, at any time, any one or more of the
following obligations and securities:
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(i) obligations guaranteed as to timely payment of interest
and principal of the United States of America or any agency thereof,
provided such obligations are backed by the full faith and credit of
the United States of America;
(ii) general obligations of or obligations guaranteed as to
the timely payment of interest and principal by any state of the United
States of America or the District of Columbia then rated A-1+ or AAA by
Standard & Poor's and P-1 or Aaa by Moody's or such lower ratings (as
approved in writing by the Rating Agencies) as will not result in the
qualification, downgrading or withdrawal of the ratings then assigned
to the Certificates by the Rating Agencies;
(iii) commercial paper which is then rated P-1 by Moody's and
A-1+ by Standard & Poor's , or such lower rating categories (as
approved in writing by the Rating Agencies) as will not result in the
qualification, downgrading or withdrawal of the ratings then assigned
to the Certificates by the Rating Agencies;
(iv) certificates of deposit, demand or time deposits, federal
funds or banker's acceptances issued by any depository institution or
trust company (including the Trustee acting in its commercial banking
capacity) incorporated under the laws of the United States or of any
state thereof or incorporated under the laws of a foreign jurisdiction
with a branch or agency located in the United States of America and
subject to supervision and examination by federal or state banking
authorities, provided that the short term unsecured deposit obligations
of such depository institution or trust company is then rated P-1 by
Moody's and A-1+ by Standard & Poor's or such lower rating categories
(as approved in writing by the Rating Agencies) as will not result in
the qualification, downgrading or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies;
(v) demand or time deposits of, or certificates of deposit
issued by, any bank, trust company, savings bank or other savings
institution provided that such deposits or certificates of deposit are
fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation (A) the short term unsecured
debt or deposits of which are rated P-1 by Moody's and A-1+ by Standard
& Poor's or the long-term unsecured debt of which are rated at least
Aaa by Moody's and AAA by Standard & Poor's or (B) are otherwise
approved in writing by the Rating Agencies as investments which will
not result in the qualification, downgrading or withdrawal of the
ratings then assigned to the Certificates by the Rating Agencies;
(vii) repurchase obligations with respect to any security
described in clauses (i), (ii) or (ix) herein or any other security
issued or guaranteed by the FHLMC, Xxxxxx Mae or any agency or
instrumentality of the United States of America which is backed by the
full faith and credit of the United States of America, in either case
entered into with a federal agency or a depository institution or trust
company (acting as principal) described in (iv) above or a corporation
(acting as principal) described in (vi) above;
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(viii) investments in money market funds, which funds (A) are
not subject to any sales, load or other similar charge; (B) are rated
at least AAAm or AAAm-G by Standard & Poor's and Aaa by Moody's and (C)
are invested solely in obligations described in clauses (i) through
(vii) above;
(ix) interests in any open-end or closed-end management type
investment company or investment trust (a) registered under the
Investment Company Act of 1940, as from time to time amended, the
portfolio of which is limited to obligations of the United States or
obligations guaranteed by the United States and to agreements to
repurchase such obligations, which agreements, with respect to
principal and interest, are at least 100% collateralized by such
obligations marked to market on a daily basis and pursuant to which the
investment company or investment trust is required to take delivery of
such obligations either directly or through an independent custodian
designated in accordance with the Investment Company Act of 1940, as
from time to time amended and (b) acceptable to the Rating Agencies (as
approved in writing by the Rating Agencies) as collateral for
securities having ratings equivalent to the ratings of the Certificates
on the Closing Date; and
(x) such other investments where either (A) the short-term
unsecured debt or deposits of the obligor on such investments are rated
A-1+ by Standard & Poor's and P-1 by Moody's or (B) such investments
are acceptable to the Rating Agencies (as approved in writing by each
of them) and will not result in the qualification, downgrading or
withdrawal of the ratings then assigned to the Certificates by the
Rating Agencies.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, trust,
limited liability company, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Pool Balance" as of any date of determination means the aggregate
Principal Balance of the Outstanding Receivables.
"Pool Factor" as of the last day of any Collection Period means the
Pool Balance divided by the Original Pool Balance, expressed as a seven-digit
decimal.
"Principal Balance" of a Receivable, as of any date of determination,
means the Amount Financed minus that portion of all payments received on or
prior to such date allocable to principal.
"Purchase Agreement" means the Receivables Purchase Agreement dated as
of [ ] between the Seller and the Depositor.
"Purchase Amount" with respect to a Repurchased Receivable or any
Receivable purchased by the Servicer pursuant to Section 14.2 means the sum, as
of the last day of the preceding Collection Period on which such Receivable
becomes such, of the Principal Balance
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thereof plus accrued interest thereon at the weighted average of the Class A
Pass-Through Rate and the Class B Pass-Through Rate.
"Purchased Receivable" means, on any date of determination, a
Receivable as to which payment of the Purchase Amount has been made by the
Depositor or the Servicer pursuant to this Agreement.
"Qualified Institution" means a depository institution organized under
the laws of the United States of America or any one of the states thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or one of the States thereof and subject
to supervision and examination by federal or state banking authorities which at
all times has the Required Deposit Rating and, in the case of any such
institution organized under the laws of the United States of America, whose
deposits are insured by the FDIC.
"Qualified Trust Institution" means an institution organized under the
laws of the United States of America or any one of the states thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or one of the States thereof and subject
to supervision and examination by federal or state banking authorities which at
all times (i) is authorized under such laws to act as a trustee or in any other
fiduciary capacity, (ii) has not less than one billion dollars in assets under
fiduciary management, (iii) has a minimum net worth of at least $50,000,000 and
(iv) has a long term deposits rating of not less than "BBB-" and "Baa3" from
Standard & Poor's and Moody's, respectively.
"Rating Agencies" means Standard & Poor's and Xxxxx'x.
"Rating Agency Condition" means, with respect to any action, written
confirmation by each Rating Agency that such action will not result in a
withdrawal or reduction of its rating of the Class A Certificates or the Class B
Certificates.
"Realized Losses" mean, for any Collection Period and for each
Receivable that became a Defaulted Receivable during such Collection Period, the
excess of (i) the aggregate Principal Balance of such Receivable over (ii)
Liquidation Proceeds received with respect to such Receivable during such
Collection Period, to the extent allocable to principal.
"Receivable" means a motor vehicle installment loan contract and all
proceeds thereof and payments thereunder [(other than interest accrued and
unpaid as of the Cut-off Date)], which Receivable shall appear on Schedule A to
this Agreement.
"Receivable Files" means the documents specified in Section 5.3.
"Receivables Pool" means the pool of Receivables included in the Trust.
"Record Date" means, with respect to any Payment Date, the Business Day
prior to such Payment Date unless Definitive Certificates are issued, in which
case Record Date shall mean the last day of the immediately preceding calendar
month.
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"Recoveries" means, with respect to any Defaulted Receivable and any
Collection Period after the Collection Period in which such Receivable became a
Defaulted Receivable, all monies received by the Servicer with respect to any
Defaulted Receivable during such Collection Period net of the sum of (i) any
fees, costs or expenses incurred by the Servicer in connection with the
collection of such Defaulted Receivable and the disposition of the Financed
Vehicle as permitted by Section 6.3 (to the extent not previously reimbursed)
and (ii) any payments required by law to be remitted to the Obligor, but, in any
event, not less than zero.
"Repurchase Date" shall have the meaning set forth in Section 5.2.
"Repurchased Receivable" means as of the last day of any Collection
Period a Receivable repurchased as of such date by the Depositor pursuant to
Section 5.2 or purchased as of such date by the Servicer pursuant to Section
6.6.
"Reserve Account Initial Deposit" means $_____________.
"Required Deposit Rating" means a short-term certificate of deposit
rating from Moody's of P-1 and from Standard & Poor's of A-1+ [and a long-term
unsecured debt rating of not less than] ["AA" by Standard & Poor's and "Aa2" by
Moody's].
"Reserve Account" shall mean the Reserve Account established and
maintained as such pursuant to Section 7.6.
"Reserve Account Securities Intermediary" shall have the meaning
specified in Section 7.1(c).
"Securities Act" means the Securities Act of 1933, as amended.
"Security Entitlement" has the meaning specified in Section
8-102(a)(17) of the UCC.
"Seller" means USAA Federal Savings Bank in its capacity as the seller
of the Receivables under this Purchase Agreement, and each successor to USAA
Federal Savings Bank (in the same capacity).
"Servicer" means USAA Federal Savings Bank in its capacity as the
servicer of the Receivables under this Agreement, each successor to USAA Federal
Savings Bank (in the same capacity) pursuant to Section 11.3, and each successor
Servicer pursuant to Section 12.2.
"Servicer's Certificate" means a certificate, substantially in the form
of Exhibit D attached hereto, completed and executed by the Servicer by its
chairman of the board, the president, treasurer, controller or any executive
vice president, senior vice president or vice president pursuant to Section 6.8.
"Servicing Fee" means with respect to a Collection Period the fee
payable to the Servicer for services rendered during the Collection Period
ending on the last day of such Collection Period, determined pursuant to Section
6.7.
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"Servicing Fee Rate" means ______% per annum.
"Specified Reserve Account Balance" means, with respect to any Payment
Date, the lesser of (i) _____% of the Pool Balance as of the last day of the
preceding Collection Period and (ii) _____% of the Original Pool Balance.
Notwithstanding the foregoing, the Specified Reserve Account Balance may be
reduced to a lesser amount as determined by the Depositor upon satisfaction of
the Rating Agency Condition.
"Specified Yield Supplement Balance" means with respect to any Payment
Date, an amount equal to [at least the sum of all projected Yield Supplement
Amounts for all future Payment Dates, assuming that future scheduled payments on
the Receivables are made on their scheduled due dates; provided that if on any
date the Servicer shall fail to pay the amount payable under the Yield
Supplement Agreement in accordance with the terms thereof, then, in such event,
the Specified Yield Supplement Balance shall not thereafter be reduced
hereunder].
"Standard & Poor's" means Standard & Poor's Ratings Group, a division
of The XxXxxx-Xxxx Companies, Inc.
"Total Collections" means with respect to any Collection Period all
amounts deposited in the Collection Account relating to such Collection Period
pursuant to Sections 7.2, 7.3 and 7.4.
"Transfer Agent and Certificate Registrar" shall have the meaning
specified in Section 9.3 and shall initially be _________________.
"Trust" means the trust created by this Agreement, the estate of which
shall consist of the property transferred thereto pursuant to this Agreement;
funds deposited in the Collection Account, the Class A Distribution Account and
the Class B Distribution Account and such amounts as from time to time may be
held therein (including the Account Property related thereto) and proceeds
thereof; and the rights of the Trust to receive payments from the Reserve
Account in accordance with this Agreement (but not the Reserve Account itself)
[and certain rights under the Yield Supplement Agreement (but not the Yield
Supplement Account itself)].
"Trustee" means the Person executing this Agreement as Trustee, its
successor in interest pursuant to Section 13.12, and any successor Trustee
pursuant to Section 13.11.
"Trustee's Certificate" means a certificate completed and executed by
an Authorized Officer pursuant to Section 13.3 and substantially in the form
attached hereto as Exhibit C-1 or C-2.
"UCC" means the Uniform Commercial Code as in effect in the respective
jurisdiction.
["Yield Supplement Account" means the account established, maintained
and designated as the "Yield Supplement Account" pursuant to Section 8.2.
"Yield Supplement Account Property" has the meaning specified in
Section 8.2(b).
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"Yield Supplemental Account Securities Intermediary" shall have the
meaning specified in Section 8.2(c).
"Yield Supplement Agreement" means the Yield Supplement Agreement dated
as of the Closing Date between the Depositor, the Servicer and Trustee,
substantially in the form attached hereto as Exhibit F.
"Yield Supplement Amount" shall have the meaning specified in Section
8.1.
"Yield Supplement Initial Deposit" means cash or Permitted Investments
having a value of at least $____.]
Section 1.2 Usage of Terms. With respect to all terms in the Agreement,
the singular includes the plural and the plural the singular; words importing
any gender include the other gender; references to "writing" include printing,
typing, lithography, and other means of reproducing words in a visible form;
references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein effected in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
and its variations means "including without limitation."
Section 1.3 Simple Interest Method; Allocations. All allocations of
payments to principal and interest and determinations of periodic charges and
the like on the Receivables shall be based on a year with the actual number of
days in such year and twelve months with the actual number of days in each such
month. Each payment on a Receivable shall be applied first to the amount of
interest accrued on such Receivable to the date of receipt, then to reduce the
scheduled principal amount outstanding on the Receivable to the extent of the
remaining scheduled payment and then to any outstanding fees under the terms of
the Receivable. Amounts paid by the Depositor or the Servicer in respect of
Repurchased Receivables shall be allocated first to any interest accrued on the
related Receivable and then to the Principal Balance of the related Receivable.
Section 1.4 References. All references to the Record Date prior to the
first Record Date in the life of the Trust shall be deemed to be references to
the Cut-off Date. All references to "as of a Record Date" shall refer to the
close of business on such Record Date. All references to the Pool Balance "as of
the first day of a Collection Period" shall refer to the Pool Balance as of the
last day of the preceding Collection Period.
Section 1.5 Section References. All section references shall be to
Sections in this Agreement unless otherwise specified.
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ARTICLE II
CREATION OF TRUST
Section 2.1 Creation of Trust. Upon the execution of this Agreement by
the parties hereto, there is hereby created the USAA Auto Grantor Trust ______.
ARTICLE III
CONVEYANCE OF RECEIVABLES
Section 3.1 Conveyance of Receivables. In consideration of the
Trustee's delivery to, or upon the order of, the Depositor of authenticated
Certificates, in authorized denominations, in an aggregate amount equal to the
Original Pool Balance, the Depositor does hereby sell, transfer, assign, and
otherwise convey to the Trustee on behalf of the Trust, without recourse
(subject to the Depositor's obligations herein):
(i) all right, title, and interest of the Depositor in and to
the Receivables listed in Schedule A hereto, all proceeds thereof and
all monies paid thereon on and after the Cut-off Date (including
proceeds of the repurchase of Receivables by the Depositor pursuant to
Section 5.2 or the purchase of Receivables by the Servicer pursuant to
Section 6.6 or 14.2), together with the interest of the Depositor in
the security interests in the Financed Vehicles granted by the Obligors
pursuant to the Receivables;
(ii) all right, title and interest of the Depositor in any
Liquidation Proceeds and in any proceeds of any extended warranties,
comprehensive and collision, credit life, or credit disability policies
relating to the Financed Vehicles or the Obligors; and
(iii) all proceeds of the foregoing items in clauses (i) and
(ii).
In connection with such sale, the Depositor agrees to record and file,
at its own expense, financing statements (and continuation statements with
respect to such financing statements when applicable) with respect to the
Receivables for the sale of accounts and chattel paper meeting the requirements
of applicable state law in such manner and in such jurisdictions as are
necessary to perfect the sale and assignment of the Receivables to the Trust.
It is the intention of the Depositor and the Trustee that the
assignment and transfer herein contemplated constitute a sale of the
Receivables, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Trust and that the Receivables not be
part of the Depositor's estate in the event of an insolvency. In the event that
such conveyance is deemed to be a pledge to secure a loan, the Depositor hereby
grants to the Trustee on behalf of the Trust for the benefit of the
Certificateholders a first priority perfected security interest in all of the
Depositor's right, title and interest in the items of property listed in clauses
(i), (ii) and (iii) above to secure the loan deemed to be made in connection
with such pledge and, in such event, this Agreement shall constitute a security
agreement under applicable law. In addition, if the sale of the Receivables from
the Seller to the Depositor is deemed to be loan secured by the
15
Receivables, the Depositor hereby transfers such loan and the related security
interest to the Trustee and grants to the Trustee a security interest in all of
the Depositor's right, title and interest in such loan and related security
interest and this Agreement shall constitute a security agreement under
applicable law.
ARTICLE IV
ACCEPTANCE BY TRUSTEE
Section 4.1 Acceptance by Trustee. The Trustee does hereby accept all
consideration conveyed by the Depositor pursuant to Section 3.1 and declares
that the Trustee shall hold such consideration upon the trusts herein set forth
for the benefit of the Certificateholders, subject to the terms and provisions
of this Agreement.
ARTICLE V
The Receivables
Section 5.1 Representations and Warranties of Depositor; Conditions
Relating to Receivables.
(a) The Depositor makes the following representations and warranties as
to the Receivables on which the Trustee shall rely in accepting the Receivables
in trust and authenticating the Certificates. Such representations and
warranties shall speak as of the Cut-off Date unless otherwise specified, but
shall survive the sale, transfer, and assignment of the Receivables to the
Trustee.
(i) Schedule of Receivables. The information set forth in
Schedule A to this Agreement with respect to each Receivable is true
and correct in all material respects, and no selection procedures
adverse to the Certificateholders have been used in selecting the
Receivables from all receivables owned by the Depositor which meet the
selection criteria specified herein and in this Agreement.
(ii) No Sale or Transfer. No Receivable has been sold,
transferred, assigned or pledged by the Depositor to any Person other
than the Trustee.
(iii) Good Title. Immediately prior to the transfer and
assignment of the Receivables to the Trustee herein contemplated, the
Depositor had good and marketable title to each Receivable free and
clear of all Liens and rights of others; and, immediately upon the
transfer thereof, the Trustee, for the benefit of the
Certificateholders, has either (i) good and marketable title to each
Receivable, free and clear of all Liens and rights of others, and the
transfer has been perfected under applicable law or (ii) a first
priority perfected security interest in each Receivable.
(iv) Receivable Files. The Receivable Files shall be kept at
one or more of the locations specified in Schedule B hereto.
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(b) Each Receivable satisfies the following conditions as of the
Cut-off Date unless otherwise specified, but such conditions shall survive the
sale, transfer and assignment of the Receivables to the Trustee.
(i) Characteristics of Receivables. Each Receivable (a) has
been originated for the retail financing of a Financed Vehicle by an
Obligor located in one of the States of the United States or the
District of Columbia; (b) contains customary and enforceable provisions
such that the rights and remedies of the holder thereof are adequate
for realization against the collateral of the benefits of the security;
and (c) provides for fully amortizing level scheduled monthly payments
(provided that the payment in the last month in the life of the
Receivable may be different from the level scheduled payment) and for
accrual of interest at a fixed rate according to the simple interest
method.
(ii) Compliance with Law. Each Receivable and each sale of the
related Financed Vehicle complied at the time it was originated or
made, and complies on and after the Cut-off Date, in all material
respects with all requirements of applicable federal, state, and local
laws, and regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Federal Trade Commission Act, the Xxxxxxxx-Xxxx
Warranty Act, Federal Reserve Board Regulations B and Z, state
adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and any other consumer credit, equal opportunity, and
disclosure laws applicable to such Receivable and sale.
(iii) Binding Obligation. Each Receivable constitutes the
legal, valid, and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in all material respects in
accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, liquidation and other similar
laws and equitable principles relating to or affecting the enforcement
of creditors' rights.
(iv) No Government Obligor. No Receivable is due from the
United States of America or any state or from any agency, department,
instrumentality or political subdivision of the United States of
America or any state or local municipality and no Receivable is due
from a business except to the extent that such receivable has a
personal guaranty.
(v) Security Interest in Financed Vehicle. Immediately prior
to the sale and assignment thereof to the Trust as herein contemplated,
each Receivable was secured by a validly perfected first priority
security interest in the Financed Vehicle in favor of the Seller as
secured party or all necessary and appropriate action with respect to
such Receivable had been taken to perfect a first priority security
interest in the related Financed Vehicle in favor of the Seller as
secured party, which security interest is assignable and has been so
assigned by the Depositor to the Trust.
(vi) Receivables in Force. No Receivable has been satisfied,
subordinated, or rescinded, nor has any Financed Vehicle been released
from the Lien granted by the related Receivable in whole or in part.
17
(vii) No Waiver. No provision of a Receivable has been waived
in such a manner that such Receivable fails either to meet all of the
representations and warranties made by the Depositor herein with
respect thereto or to meet all of the conditions with respect thereto
pursuant to this subsection 5.1(b).
(viii) No Amendments. No Receivable has been amended except
pursuant to either instruments included in the Receivable Files or
instruments to be included in the Receivable Files pursuant to Section
6.2 and no such amendment has caused such Receivable either to fail to
meet all of the representations and warranties made by the Depositor
herein with respect thereto or to fail to meet all of the conditions
with respect thereto pursuant to this subsection 5.1(b).
(ix) No Defenses. As of the Cut-off Date, there are no rights
of rescission, setoff, counterclaim, or defense, and the Depositor has
no knowledge of the same being asserted or threatened, with respect to
any Receivable.
(x) No Liens. As of the Cut-off Date, the Depositor has no
knowledge of any Liens or claims that have been filed, including Liens
for work, labor, materials or unpaid taxes relating to a Financed
Vehicle, that would be Liens prior to, or equal or coordinate with, the
Lien granted by the Receivable.
(xi) No Default. Except for payment defaults continuing for a
period of not more than [30] days as of the Cut-off Date, the Depositor
has no knowledge that a default, breach, violation, or event permitting
acceleration under the terms of any Receivable exists; the Depositor
has no knowledge that a continuing condition that with notice or lapse
of time would constitute a default, breach, violation, or event
permitting acceleration under the terms of any Receivable exists; and
the Depositor has not waived any of the foregoing.
(xii) Insurance. Each Receivable requires that the Obligor
thereunder obtain comprehensive and collision insurance covering the
Financed Vehicle.
(xiii) Lawful Assignment. No Receivable has been originated
in, or is subject to the laws of, any jurisdiction under which the
sale, transfer, and assignment of such Receivable under this Agreement
or pursuant to transfers of the Certificates is unlawful, void or
voidable.
(xiv) All Filings Made. No filings (other than UCC filings
which have been made) or other actions are necessary in any
jurisdiction to give the Trustee a first perfected security interest in
the Receivables.
(xv) One Original. With respect to any Receivable for which an
original executed copy exists, there is no more than one original
executed copy of such Receivable which, immediately prior to the
delivery thereof to the Servicer, as custodian for the Trustee, was in
the possession of the Servicer.
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(xvi) Security. Each Receivable is secured by a new or used
automobile or light-duty truck.
(xvii) Maturity of Receivables. Each Receivable has a
remaining maturity, as of the Cut-off Date, of not less than 6 months
nor greater than 72 months and (i) with respect to Receivables secured
by new Financed Vehicles, an original maturity of at least [12] months
and not more than [72] months and (ii) with respect to Receivables
secured by used Financed Vehicles, an original maturity of at least ___
months and not more than ___ months.
(xviii) Annual Percentage Rate. Each Receivable is a
[fully-amortizing fixed rate simple interest contract that provides for
level scheduled monthly payments (except for the last payment, which
may be minimally different from the level payments) over its respective
remaining term, and has an Annual Percentage Rate that equals or
exceeds _____%, is not secured by any interest in real estate, and has
not been identified on the computer files of the Seller as relating to
Obligors who have requested a reduction in the periodic finance
charges, as of the Cut-off Date, by application of the Servicemembers
Civil Relief Act].
(xix) No Repossessions. Each Receivable is secured by a
Financed Vehicle that, as of the Cut-off Date, has not been repossessed
without reinstatement of such Receivable.
(xx) Obligor Not Subject to Bankruptcy Proceedings. Each
Receivable has been entered into by an Obligor who has not been
identified on the computer files of the Depositor as being a debtor in
any bankruptcy proceeding as of the Cut-off Date.
(xxi) Remaining Principal Balance. Each Receivable had a
remaining Principal Balance, as of the Cut-off Date, of at least
$_____.
Section 5.2 Repurchase Upon Breach or Failure of a Condition. The
Depositor, the Servicer, or the Trustee, as the case may be, shall inform the
other parties promptly, in writing, upon the discovery by the Depositor, the
Servicer or an Authorized Officer of the Trustee of either any breach of the
Depositor's representations and warranties set forth in subsection 5.1(a) or the
failure of any Receivable to satisfy any of the conditions set forth in
subsection 5.1(b). Unless the breach or failed condition shall have been cured
by the last day of the Collection Period following the Collection Period during
which such discovery occurred (or, at the Depositor's option, the last day of
the Collection Period during which such discovery occurred) (such date, the
"Repurchase Date"), the Depositor shall repurchase any Receivable the Trust's
interest in which was materially and adversely affected by the breach or failed
condition, as determined by the Servicer and reported in an Officer's
Certificate, as of the Repurchase Date; provided that unless the Depositor has
sufficient cash, distributed to it by the Issuer, to make such repurchase, the
Seller shall only be required to repurchase such Receivable if the Seller
concurrently repurchases such Receivable under the Purchase Agreement. The
Seller shall enforce its rights under the Sale and Servicing Agreement to have
the Seller repurchase such Receivable. Subject to the preceding proviso, in
consideration of the repurchase of a Receivable, the Depositor shall remit the
Purchase Amount of such Receivable as of the Repurchase Date
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(less any Liquidation Proceeds deposited, or to be deposited, by the Servicer in
the Collection Account with respect to such Receivable pursuant to Section 6.3)
in the manner specified in Section 7.4. The sole remedy of the Trust, the
Trustee or the Certificateholders with respect either to a breach of the
Depositor's representations and warranties set forth in subsection 5.1(a) or to
a failure of any of the conditions set forth in subsection 5.1(b) shall be to
require the Depositor to repurchase Receivables pursuant to, and subject to the
terms of, this Section 5.2. The obligation of the Depositor to repurchase under
this Section 5.2 shall not be solely dependent upon the actual knowledge of the
Depositor of any breached representation or warranty. The Trustee shall have no
duty to conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable pursuant to this Section
5.2 or the eligibility of any Receivable for purposes of this Agreement.
Section 5.3 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Trustee, upon
the execution and delivery of this Agreement, agrees to have the Servicer act as
custodian of the following documents or instruments which are hereby
constructively delivered to the Trustee with respect to each Receivable:
(i) The original executed Receivable or, if no such original
exists, a copy of the original executed Receivable;
(ii) To the extent that a credit application with respect to
an Obligor exists, the original executed copy of such credit
application or, if no such original exists, a copy of such original
executed copy, fully executed by the Obligor;
(iii) The notice of recorded Lien or such documents that the
Servicer or the Depositor shall keep on file, in accordance with its
customary procedures, evidencing the first priority perfected security
interest of the Seller in the Financed Vehicle; and
(iv) Any and all other documents that the Depositor or
Servicer, as the case may be, shall keep on file, in accordance with
its customary procedures, relating to a Receivable, an Obligor (to the
extent relating to a Receivable), or a Financed Vehicle.
The Servicer hereby agrees to act as custodian of the Receivable Files,
as agent for the Trustee, hereunder. The Servicer acknowledges that it holds the
documents and instruments relating to the Receivables for the benefit of the
Trustee and the Certificateholders. The Trustee shall have no responsibility to
monitor the Servicer's performance as custodian and shall have no liability in
connection with the Servicer's performance of such duties hereunder.
Section 5.4 Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian, shall hold
the Receivable Files on behalf of the Trustee for the use and benefit of all
present and future Certificateholders, and maintain such accurate and complete
accounts, records, and computer systems pertaining to the Receivables as shall
enable the Trustee to comply with its obligations pursuant to these Standard
Terms and Conditions of Agreement. In performing its duties as custodian, the
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Servicer shall act with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to the receivable files of
comparable new or used automobile and light-duty truck receivables that the
Servicer services for itself or others. The Servicer shall conduct, or cause to
be conducted, periodic audits of the files of all receivables owned or serviced
by the Servicer which shall include the Receivable Files held by it under this
Agreement and the related accounts, records, and computer systems, in such a
manner as shall enable the Trustee to identify all Receivable Files and such
related accounts, records and computer systems and to verify, if the Trustee so
elects, the accuracy of the Servicer's record-keeping. The Servicer shall
promptly report to the Trustee any failure on its part to hold the Receivable
Files and maintain its accounts, records, and computer systems as herein
provided, and promptly take appropriate action to remedy any such failure.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B to this
Agreement, or at such other office as shall be specified to the Trustee by 30
days' prior written notice. The Servicer shall make available to the Trustee or
its duly authorized representatives, attorneys, or auditors the Receivable Files
and the related accounts, records, and computer systems maintained by the
Servicer at such times during normal operating hours as the Trustee shall
reasonably instruct which does not unreasonably interfere with the Servicer's
normal operations.
(c) Release of Documents. Upon instruction from the Trustee, the
Servicer, at its expense, shall release any document in the Receivable Files to
the Trustee, the Trustee's agent, or the Trustee's designee, as the case may be,
at such place or places as the Trustee may reasonably designate as soon as
reasonably practicable to the extent it does not unreasonably interfere with the
Servicer's normal operations. The Servicer shall not be responsible for any loss
occasioned by the failure of the Trustee, its agent or its designee to return
any document or any delay in doing so.
Section 5.5 Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by an Authorized Officer. A
certified copy of a by-law or of a resolution of the Board of Directors of the
Trustee shall constitute conclusive evidence of the authority of any such
Authorized Officer to act and shall be considered in full force and effect until
receipt by the Servicer of written notice to the contrary given by the Trustee.
Section 5.6 Custodian's Indemnification. The Servicer, as custodian,
shall indemnify the Trustee, its officers, directors, employees and agents for
any and all liabilities, obligations, losses, damages, payments, costs, or
expenses of any kind whatsoever that may be imposed on, incurred, or asserted
against the Trustee, its officers, directors, employees or agents as the result
of any improper act or omission in any way relating to the maintenance and
custody by the Servicer, as custodian, of the Receivable Files; provided,
however, that the Servicer shall not be liable for any portion of any such
amount resulting from the willful misfeasance, bad faith, or negligence of the
Trustee or any loss occasioned by the failure of the Trustee, its agent or
designee to return any document to the Servicer or any delay in doing so.
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Section 5.7 Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cut-off Date and shall
continue in full force and effect until terminated pursuant to this Section 5.7
or until this Agreement shall be terminated. If the Servicer shall resign as
Servicer under Section 11.5 or if all of the rights and obligations of the
Servicer shall have been terminated under Section 12.1, the appointment of the
Servicer as custodian may be terminated by the Trustee or by the Holders of
Certificates evidencing not less than 25% of the Pool Balance, in the same
manner as the Trustee or such Holders may terminate the rights and obligations
of the Servicer under Section 12.1. As soon as practicable after any termination
of such appointment, the Servicer shall, at its expense, deliver the Receivable
Files to the Trustee or the Trustee's agent at such place or places as the
Trustee may reasonably designate. Notwithstanding the termination of the
Servicer as custodian, the Trustee agrees that upon any such termination, the
Trustee shall provide, or cause its agent to provide, access to the Receivable
Files to the Servicer for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables hereunder.
ARTICLE VI
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 6.1 Duties of Servicer. The Servicer shall manage, service,
administer and make collections on the Receivables (other than Repurchased
Receivables) with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to comparable new or used automobile and
light-duty truck receivables that it services for itself. The Servicer's duties
shall include collection and posting of all payments, responding to inquiries by
Obligors or by federal, state, or local governmental authorities with respect to
the Receivables, investigating delinquencies, reporting tax information to
Obligors in accordance with its customary practices, accounting for collections,
furnishing monthly and annual statements to the Trustee with respect to
distributions, and, if it elects to do so, making Advances pursuant to Section
7.3. The Servicer shall follow its customary standards, policies, and procedures
in performing its duties as Servicer. Without limiting the generality of the
foregoing, the Servicer shall be authorized and empowered by the Trustee to
execute and deliver, on behalf of itself, the Trust, the Trustee, the
Certificateholders, or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, without recourse to the Trustee, with respect to the
Receivables or with respect to the Financed Vehicles. If the Servicer shall
commence a legal proceeding to enforce a Receivable or a Defaulted Receivable,
the Trustee shall thereupon be deemed to have automatically assigned such
Receivable and the related property conveyed to the Trust pursuant to Section
3.1 with respect to such Receivable to the Servicer, solely for the purpose of
collection. The Trustee shall furnish the Servicer with such documents as have
been prepared by the Servicer for execution by the Trustee and as are necessary
or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
Section 6.2 Collection of Receivable Payments. The Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables and of this Agreement as and when the same shall
become due, and shall follow such collection
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procedures as it follows with respect to comparable new or used automobile and
light-duty truck receivables that it services for itself. The Servicer shall not
change the amount of or reschedule the due date of any scheduled payment to a
date more than 30 days from the original due date of such scheduled payment,
change the annual percentage rate of, or extend any Receivable or change any
material term of a Receivable, except as provided by the terms of the Receivable
or of this Agreement or as required by law or court order, provided, however,
that the Servicer may extend any Receivable that is in default or with respect
to which default is reasonably foreseeable and that would be acceptable to the
Servicer with respect to comparable new or used automobile and light-duty truck
receivables that it services for itself, if (a) the amount on deposit in the
Reserve Account is greater than zero at the time of the extension, (b) the total
credit-related extensions granted on the Receivable will not exceed four months
in the aggregate, (c) the total number of credit-related extensions granted on
the Receivable will not exceed two, (d) the maturity of such Receivable would
not be extended beyond the Collection Period immediately preceding the Final
Payment Date and (e) the rescheduling or extension would not modify the terms of
such Receivable in such a manner as to constitute a cancellation of such
Receivable and the creation of a new receivable. If, as a result of
inadvertently rescheduling or extending of payments, such rescheduling or
extension breaches any of the terms of the proviso to the preceding sentence,
then the Servicer shall be obligated to purchase such Receivable pursuant to
Section 6.6. For the purpose of such purchases pursuant to Section 6.6, notice
shall be deemed to have been received by the Servicer at such time as shall make
purchase mandatory as of the last day of the Collection Period during which the
discovery of such breach occurred.
Section 6.3 Realization Upon Receivables. On behalf of the Trust, the
Servicer shall use reasonable efforts, consistent with its customary servicing
procedures, to repossess or otherwise take possession of the Financed Vehicle
securing any Receivable which the Servicer shall have determined to be a
Defaulted Receivable or otherwise (and shall specify any such Defaulted
Receivable to the Trustee no later than the Determination Date following the
Collection Period in which the Servicer shall have made such determination). The
Servicer shall follow such customary and usual practices and procedures as it
shall deem necessary or advisable in its servicing of new or used automobile and
light-duty truck receivables, which may include selling the Financed Vehicle at
public or private sale. The Servicer shall be entitled to recover from proceeds
all reasonable expenses incurred by it in the course of converting the Financed
Vehicle into cash proceeds. The Liquidation Proceeds (net of such expenses)
realized in connection with any such action with respect to a Receivable shall
be deposited by the Servicer in the Collection Account in the manner specified
in Section 7.2 and shall be applied to reduce (or to satisfy, as the case may
be) the Purchase Amount of the Receivable, if such Receivable is to be
repurchased by the Depositor pursuant to Section 5.2, or is to be purchased by
the Servicer pursuant to Section 6.6. The foregoing shall be subject to the
provision that, in any case in which the Financed Vehicle shall have suffered
damage, the Servicer shall not expend funds in connection with the repair or the
repossession of such Financed Vehicle unless it shall determine in its sole
discretion that such repair and/or repossession will increase the Liquidation
Proceeds of the related Receivable by an amount equal to or greater than the
amount of such expenses.
Section 6.4 Maintenance of Security Interests in Financed Vehicles. The
Servicer, in accordance with its customary servicing procedures, shall take such
steps as are necessary to
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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 6.5 Covenants of Servicer. The Servicer hereby makes the
following covenants on which the Trustee shall rely in accepting the Receivables
in trust and authenticating the Certificates:
(i) Security Interest to Remain in Force. The Financed Vehicle
securing each Receivable shall not be released from the security
interest granted by the Receivable in whole or in part except as
contemplated herein;
(ii) No Impairment. The Servicer shall not impair the rights
of the Trust in the Receivables; and
(iii) Extensions, Defaulted Receivables. The Servicer shall
not increase the number of payments under a Receivable, nor increase
the Amount Financed under a Receivable, nor extend or forgive payments
on a Receivable, except as provided in Section 6.2. In the event that
at the end of the scheduled term of any Receivable, the outstanding
principal amount thereof is such that the final payment to be made by
the related Obligor is larger than the regularly scheduled payment of
principal and interest made by such Obligor, the Servicer may permit
such Obligor to pay such remaining principal amount in more than one
payment of principal and interest, provided that the last such payment
shall be due on or prior to the Collection Period immediately preceding
the Final Payment Date.
Section 6.6 Purchase of Receivables Upon Breach. The Servicer or the
Trustee, as the case may be, shall inform the other party promptly, in writing,
upon the discovery by the Servicer or an Authorized Officer of the Trustee, as
the case may be, of any breach by the Servicer of its covenants under Section
6.5. Except as otherwise specified in Section 6.2, unless the breach shall have
been cured by the last day of the Collection Period following the Collection
Period during which such breach was discovered (or, at the Servicer's election,
the last day of the Collection Period during which such breach was discovered),
the Servicer shall purchase any
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Receivable materially and adversely affected by such breach, as determined by
the Servicer and reported in an Officer's Certificate as of such date. For this
purpose, any breach of the covenant set forth in Section 6.5(iii) shall be
deemed to materially and adversely affect the interest of the Trust in a
Receivable. In consideration of the purchase of such Receivable, the Servicer
shall remit the Purchase Amount (less any Liquidation Proceeds deposited, or to
be deposited, by the Servicer in the Collection Account with respect to such
Receivable pursuant to Section 6.3) in the manner specified in Section 7.4. The
sole remedy of the Trust, the Trustee, or the Certificateholders against the
Servicer with respect to a breach of its covenants in Section 6.5 shall be to
require the Servicer to purchase Receivables pursuant to this Section 6.6. The
Trustee shall have no duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable pursuant
to this Section 6.6 or the eligibility of any Receivable for purposes of this
Agreement.
Section 6.7 Servicing Fee. The Servicing Fee for a Collection Period
shall equal the product of one-twelfth of the Servicing Fee Rate and the Pool
Balance as of the first day of such Collection Period. In addition, the Servicer
shall be entitled to receive as additional servicing compensation investment
earnings on amounts on deposit in the Collection Account or earned on
collections pending deposit in the Collection Account[; provided, however, that,
beginning with the Collection Period for which the Trustee is notified in
writing that the Servicer has failed to deposit an Advance with respect to a
Receivable other than because such Receivable has been designated a Defaulted
Receivable and continuing until the Final Payment Date, such investment earnings
shall not be paid to the Servicer, but shall be treated as Available Interest].
The Servicer shall be required to pay from its own account all expenses incurred
by it in connection with its activities hereunder (including fees and
disbursements of the Trustee, Trustee's counsel, the Paying Agent, the Transfer
Agent and Certificate Registrar and independent accountants, taxes imposed on
the Servicer, and expenses incurred in connection with distributions and reports
to Certificateholders) except expenses in connection with realizing upon a
Receivable under Section 6.3 which may be paid from Liquidation Proceeds from
such Receivable.
Section 6.8 Servicer's Certificate. On or before each Determination
Date, the Servicer shall deliver to the Trustee, the Paying Agent, the Rating
Agencies, a Servicer's Certificate substantially in the form of Exhibit D
hereto, for the Collection Period preceding such Determination Date, containing
all information necessary to make the distributions pursuant to Section 7.5 and
all information necessary for the Paying Agent to send statements to
Certificateholders pursuant to Section 7.8. The Servicer shall deliver to the
Rating Agencies any information, to the extent it is available to the Servicer,
that the Rating Agencies reasonably request in order to monitor the Trust. The
Servicer shall also specify each Receivable which the Depositor or the Servicer
is required to repurchase or purchase, as the case may be, as of the last day of
the preceding Collection Period, each Receivable which the Servicer shall have
determined to be a Defaulted Receivable during the preceding Collection Period,
and each Receivable for which the Servicer has failed to deposit an Advance
pursuant to Section 7.3 other than because such Receivable has been designated a
Defaulted Receivable. Subsequent to the Closing Date, the form of Servicer's
Certificate may be revised or modified to cure any ambiguities or
inconsistencies with this Agreement; provided, however, that no material
information shall be deleted from the form of Servicer's Certificate. In the
event that the form of
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Servicer's Certificate is revised or modified in accordance with the preceding
sentence, a form thereof, as so revised or modified, shall be provided to the
Trustee and each Rating Agency.
Section 6.9 Annual Statement as to Compliance. (a) The Servicer shall
deliver to the Trustee and the Rating Agencies, and on or before March 31 of
each year commencing March 31, _____, a certificate signed by the chairman of
the board, president, the treasurer, the controller, any executive or senior
vice president or any vice president of the Servicer, stating that (a) a review
of the activities of the Servicer during the year ended the preceding December
31 (or shorter period in the case of the first such certificate) and of its
performance under this Agreement has been made under such officer's supervision
and (b) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations in all material respects under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
(b) The Servicer shall deliver to the Trustee and each Rating Agency,
promptly after having obtained knowledge thereof, but in no event later than
five Business Days thereafter, an Officer's Certificate specifying any event
which with the giving of notice or lapse of time, or both, would become an Event
of Servicing Termination under Section 12.1. The Depositor shall deliver to the
Trustee, promptly after having obtained knowledge thereof, but in no event later
than five Business Days thereafter, an Officer's Certificate specifying any
event which with the giving of notice or lapse of time, or both, would become an
Event of Servicing Termination under Section 12.1.
Section 6.10 Annual Audit Report. The Servicer shall cause a firm of
independent public accountants (which may provide other services to the Servicer
or the Depositor) to prepare a report addressed to the Board of Directors of the
Servicer, for the information and use of the Trustee, and the Rating Agencies on
or before March 31 of each year, beginning March 31, _____, to the effect that
such firm has examined the automobile and light-duty truck receivable servicing
functions of the Servicer, including the Servicer's procedures and records
relating to servicing of the Receivables under this Agreement and that, on the
basis of such examination, such firm is of the opinion that such servicing has
been conducted in compliance with this Agreement except for (a) such exceptions
as such firm believes to be immaterial and (b) such other exceptions as shall be
set forth in such firm's report. In addition, such report shall state that such
firm has compared the mathematical calculations of each amount set forth in the
monthly certificates forwarded by the Servicer pursuant to Section 6.8 during
the period covered by such report (which shall be the preceding calendar year)
with the Servicer's computer reports which were the source of such amounts and
that on the basis of such comparison, such firm is of the opinion that such
amounts are in agreement, except for such exceptions as such firm believes to be
immaterial and such other exceptions as shall be set forth in such statement. In
addition, such report shall set forth the procedures performed in conjunction
with the examination and shall contain an opinion of such firm as to the
accuracy of the amounts set forth in the certificates delivered pursuant to
Section 6.8 in such period.
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The report of the independent certified public accountants shall also
indicate that such accounting firm is independent of the Servicer within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
Section 6.11 Reports to Certificateholders and the Rating Agencies. (a)
The Trustee shall provide to any Certificateholder who so requests in writing
(addressed to the Corporate Trust Office) a copy of any Servicer's Certificate
described in Section 6.8, the annual audit statement described in Section 6.9,
or the annual audit report described in Section 6.10. The Trustee may require
the Certificateholder to pay a reasonable sum to cover the cost of the Trustee's
complying with such request.
(b) The Trustee shall forward to the Rating Agencies the statement to
Certificateholders described in Section 7.8 and any other reports it may receive
pursuant to this Agreement to (i) Standard & Poor's Ratings Group, Asset-Backed
Surveillance Group, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (ii) Xxxxx'x
Investors Service, Inc., ABS Monitoring Dept., 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
Section 6.12 Insurance. The Servicer, in accordance with its customary
servicing procedures and underwriting standards, shall require that each Obligor
shall have obtained and shall maintain comprehensive and collision insurance
covering the Financed Vehicle as of the execution of the Receivable. The
Servicer shall enforce its rights under the Receivables to require the Obligors
to maintain comprehensive and collision insurance, in accordance with the
Servicer's customary practices and procedures with respect to comparable new or
used automobile and light-duty truck receivables that it services for itself or
others.
ARTICLE VII
Distributions; Statements to Certificateholders
Section 7.1 Accounts. (a) The Servicer shall establish the (i)
Collection Account in the name of the Trustee for the benefit of the
Certificateholders, (ii) the Class A Distribution Account in the name of the
Trustee for the benefit of the Class A Certificateholders and (iii) the Class B
Distribution Account in the name of the Trustee for the benefit of the Class B
Certificateholders. Each such account shall be either:
(x) a segregated identifiable trust account established in the trust
department of a Qualified Trust Institution; or
(y) a separately identifiable deposit account established in the
deposit taking department of a Qualified Institution, which may be the Seller so
long as the Seller is a Qualified Institution.
The Collection Account shall satisfy the requirements of clause (x)
above. The Depositor hereby grants to the Collateral Agent for the benefit of
the Class A Certificateholders a security interest in the Class A Distribution
Account, likewise, the Depositor hereby grants to the Collateral Agent for the
benefit of the Class B Certificateholders a security interest in the Class B
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Distribution Account. Should any depositary of the Collection Account, the Class
A Distribution Account or the Class B Distribution Account cease to be, as
applicable, a Qualified Institution or a Qualified Trust Institution, then the
Servicer shall, with the Depositor's assistance as necessary, cause such account
to be moved, upon thirty (30) days notice to the Trustee, to a Qualified
Institution or a Qualified Trust Institution, unless the Servicer provides the
Trustee with a letter from the Rating Agencies to the effect that the current
ratings assigned to the Certificates by the Rating Agencies will not be
adversely affected by such depositary's ceasing to be a Qualified Institution or
a Qualified Trust Institution, as the case may be.
All amounts held in the Collection Account shall be invested by the
bank or trust company then maintaining the account at the written direction of
the Servicer in Permitted Investments that mature on a date not later than the
Deposit Date next succeeding the date of investment; provided, that if the
Collection Account is maintained with the Trustee, such Permitted Investments
may mature on the Payment Date next succeeding the date of investment, if the
Trustee is the obligor on such investments (including repurchase agreements on
which the Trustee in its commercial capacity is liable as principal).
(b) The Depositor shall establish the Reserve Account in the name of
the Collateral Agent for the benefit of the Certificateholders. Subject to
Section 7.5(b), the Reserve Account shall be under the sole dominion and control
of the Collateral Agent. The Reserve Account shall be a segregated identifiable
trust account established in the trust department of a Qualified Trust
Institution.
Should any depositary of the Reserve Account cease to be a Qualified
Trust Institution, then the Collateral Agent shall, upon thirty (30) days notice
to the Trustee, with the Depositor's assistance as necessary, cause such account
to be moved to a Qualified Trust Institution, unless the Depositor provides the
Trustee and the Collateral Agent with a letter from the Rating Agencies to the
effect that the current ratings assigned to the Certificates by the Rating
Agencies will not be adversely affected by such depositary's ceasing to be a
Qualified Trust Institution. The Reserve Account shall not be property of the
Trust.
Funds on deposit in the Reserve Account shall be invested by the
Collateral Agent in Permitted Investments selected in writing by the Servicer;
provided, however, it is understood and agreed that the Collateral Agent shall
not be liable for any loss or charge arising from such investment in Permitted
Investments. All such Permitted Investments shall be held by the Collateral
Agent for the benefit of the Certificateholders in the manner specified in
subsection (c) below; provided, however, that on each Payment Date all interest
and other investment income (net of losses and investment expenses) on funds on
deposit therein shall be withdrawn from the Reserve Account at the written
direction of the Servicer and paid to the Depositor. Funds on deposit in the
Reserve Account shall be invested in Permitted Investments that will mature so
that all funds (including both principal and interest) will be available at the
opening of business on the next following Deposit Date; provided, however, that
subject to satisfaction of the Rating Agency Condition and notice thereof to the
Trustee and the Collateral Agent, all or a portion of such funds on deposit in
the Reserve Account may be invested in Permitted Investments that mature later
than such next following Deposit Date.
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(c) Each Permitted Investment made with funds from the Reserve Account
shall be delivered to the Collateral Agent by causing the financial institution
then maintaining the Reserve Account (such institution being referred to as the
"Reserve Account Securities Intermediary") to create a Security Entitlement in
the Reserve Account in favor of the Trustee with respect to such Permitted
Investment by indicating by book-entry that such Permitted Investment has been
credited to the Reserve Account. The Servicer shall only invest in Permitted
Investments which the Reserve Account Securities Intermediary agrees to credit
to the Reserve Account.
(d) The Servicer shall have the power, revocable by the Collateral
Agent, to instruct the Collateral Agent to make withdrawals and payments from
the Reserve Account for the purpose of permitting the Servicer to carry out its
duties hereunder.
(e) Each of the Depositor and the Servicer agree to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments (including,
without limitation, any financing statements under the UCC or this Agreement) as
may be determined to be necessary, in order to perfect the security interests
created by this Section 7.1 and otherwise effectuate the purposes, terms and
conditions of this Section 7.1.
(f) Notwithstanding anything else contained herein, the Reserve Account
shall only be established at Qualified Trust Institution which agrees that it
will (i) comply with Entitlement Orders (i.e., orders directing the transfer or
redemption of any financial assets credited to the Reserve Account) relating to
the Reserve Account issued by the Collateral Agent without further consent by
the Depositor; (ii) credit all Permitted Investments to the Reserve Account;
(iii) treat each item of property (including, without limitation, investment
property, securities, instruments and cash) credited to the Reserve Account as a
Financial Asset; (iv) not enter into any agreement with any other person
relating to the Reserve Account pursuant to which agreement it has agreed to
comply with Entitlement Orders made by such person; (v) not accept for credit to
the Reserve Account any Permitted Investment which is registered in the name of,
or payable to the order of, or specially indorsed to, any person other than such
Qualified Trust Institution unless it has been indorsed to such Qualified Trust
Institution or is indorsed in blank and (vi) such Qualified Trust Institution
has agreed that it will waive any right of set-off unrelated to its fees for
such Account.
Section 7.2 Collections. The Servicer shall remit daily within two
Business Days of receipt to the Collection Account all payments by or on behalf
of the Obligors on the Receivables and all Liquidation Proceeds (net of
expenses), both as collected during the Collection Period. Notwithstanding the
provisions of the first sentence of this Section 7.2, so long as the Servicer is
USAA Federal Savings Bank, the Servicer shall be permitted to make deposits on a
monthly instead of a daily basis if either (a) the Servicer obtains a short-term
certificate of deposit rating of the Servicer from Standard & Poor's and Moody's
of at least A-1+ and P-1, respectively, or (b) the Servicer provides the Trustee
with (1) a letter from each Rating Agency to the effect that the current ratings
assigned to the Certificates by the Rating Agency will not be adversely affected
by the remittance of Collections on a monthly, rather than a daily, basis. Any
such collections remitted to the Collection Account on a monthly basis shall be
in
29
immediately available funds and shall be remitted no later than 11:00 a.m.,
New York City time on or before the Deposit Date. For purposes of this Section
7.2 the phrase "payments made on behalf of the Obligors" shall mean payments
made by Persons other than the Depositor or the Servicer.
Section 7.3 Advances.
(a) As of each Deposit Date, the Servicer shall make a payment with
respect to each Receivable (other than a Defaulted Receivable) equal to the
excess, if any, of (x) the product of the Principal Balance of such Receivable
as of the first day of the related Collection Period and one-twelfth of the
Annual Percentage Rate of interest on such Receivable (calculated on the basis
of a 360-day year of twelve 30-day months), over (y) the interest actually
received by the Servicer with respect to such Receivable from the Obligor or
from payment of the Purchase Amount during or with respect to such Collection
Period. The Servicer shall deposit all such Advances into the Collection Account
in immediately available funds no later than, 11:00 a.m. New York City time, on
the Deposit Date. Notwithstanding the foregoing, the Servicer may elect not to
make any Advance with respect to a Receivable to the extent that the Servicer,
in its sole discretion, shall determine that such Advance is not recoverable
from subsequent payments on such Receivable or from withdrawals from the Reserve
Account. To the extent that the amount set forth in clause (y) above with
respect to a Receivable is greater than the amount set forth in clause (x) above
with respect thereto, such excess amount shall be distributed to the Servicer
pursuant to Section 7.5(b); [provided, however, that the Servicer shall not be
entitled to reimbursement for an Advance resulting from a payment being made by
or on behalf of the Obligor prior to the Due Date under the Receivable (a
"Simple Interest Advance")]. In addition, in the event that a Receivable becomes
a Defaulted Receivable, Outstanding Advances in respect of that Receivable shall
be reimbursed to the extent of Interest Collections with respect to such
Receivable and, if such amounts are insufficient, from amounts on deposit in the
Reserve Account, and if such amounts are not sufficient, from amounts on deposit
in the Collection Account. The Servicer shall not make any advance with respect
to principal of Receivables.
(b) The Servicer shall deposit in the Collection Account the aggregate
Advances on the Receivables pursuant to Section 7.3(a). To the extent that the
Servicer fails to make an Advance pursuant to Section 7.3(a) on the date
required, the Servicer shall so notify the Trustee in writing specifying the
amount of the Advance and the Receivable to which such Advance relates, and the
Trustee shall withdraw such amount (or, if determinable, such portion of such
amount as does not represent advances for delinquent interest) from the Reserve
Account and deposit such amount in the Collection Account. [The Trustee shall
deposit in the Collection Account the aggregate of any amounts received pursuant
to the Yield Supplement Agreement on the date of receipt thereof.]
Section 7.4 Additional Deposits. The Servicer, or the Depositor, as the
case may be, shall deposit into the Collection Account the aggregate Purchase
Amount pursuant to Sections 5.2, 6.6 and 14.2, as applicable. All remittances
shall be made to the Collection Account, in immediately available funds, no
later than 11:00 a.m., on the Deposit Date.
30
Section 7.5 Distributions.
(a) On or before each Determination Date, the Servicer shall calculate
all amounts to be deposited in the Class A Distribution Account and the Class B
Distribution Account, which calculations shall be set forth in the Servicer's
Certificate delivered to the Trustee on or before such Determination Date.
(b) On each Payment Date, after making the reimbursements to the
Servicer from amounts on deposit in the Collection Account of Outstanding
Advances pursuant to Section 7.3, the Trustee shall withdraw from the Collection
Account, the Available Interest and Available Principal for such Payment Date,
withdraw from the Reserve Account such amounts as may be required to satisfy
amounts requested by the Servicer for such Payment Date, make the following
deposits and distributions, if necessary, based solely on the information
contained in the Servicer's Certificate, to the extent of amounts available from
the indicated sources, in the following priority:
(i) to the Servicer, first from Available Interest, and then,
if necessary, from the Available Reserve Amount, any unpaid Servicing
Fee owing to such Servicer for the related Collection Period and all
unpaid Servicing Fees from prior Collection Periods less any amounts
owing to the Trustee pursuant to Section 13.7 hereof, which shall be
paid to the Trustee;
(ii) to the Class A Distribution Account, first from Available
Interest, then, if necessary, from the Available Reserve Amount, and
finally, if necessary, from the Class B Percentage of Available
Principal, the Class A Interest Distribution for such Payment Date; and
(iii) to the Class B Distribution Account, first from
Available Interest, and then, if necessary, from the Available Reserve
Amount, the Class B Interest Distribution for such Payment Date.
(c) On each Payment Date, the Trustee shall make the following deposits
and distributions (based on the information contained in the Servicer's
Certificate), to the extent of the portion of Available Principal, Available
Interest and the Available Reserve Amount (to be applied in that order of
priority) remaining after the application of clauses (i), (ii) and (iii) above,
in the following priority:
(i) to the Class A Distribution Account, the Class A Principal
Distribution for such Payment Date;
(ii) to the Class B Distribution Account, the Class B
Principal Distribution for such Payment Date;
(iii) to the Collateral Agent for deposit in the Reserve
Account, any amounts remaining, until the amount on deposit in the
Reserve Account equals the Specified Reserve Account Balance; and
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(iv) to the Depositor, any amount remaining less any accrued
and unpaid Trustee fees and expenses which shall be paid to the
Trustee;
(d) On each Payment Date, all amounts on deposit in the Class A
Distribution Account will be distributed pro rata to the Class A
Certificateholders by the Trustee and all amounts on deposit in the Class B
Distribution Account will be distributed pro rata to the Class B
Certificateholders by the Trustee. Except as provided in Section 14.1, payments
under this paragraph shall be made to the Certificateholders by check mailed by
the Trustee to each Holder's respective address of record (or, in the case of
Certificates registered in the name of a Clearing Agency, or its nominee, by
wire transfer of immediately available funds). To the extent that the Trustee is
required to wire funds to the Certificateholders from the Class A Distribution
Account or the Class B Distribution Account, as applicable, it shall request the
bank maintaining the Class A Distribution Account or the Class B Distribution
Account, as applicable, to make a wire transfer of the amount to be distributed
and to confirm such wire transfer.
Section 7.6 Reserve Account. On the Closing Date, the Depositor shall
deposit the Reserve Account Initial Deposit into the Reserve Account. The
Depositor hereby grants to the Collateral Agent for the benefit of the
Certificateholders a security interest in and to the Reserve Account, any and
all Financial Assets or other property credited thereto from time to time,
including Permitted Investments, and the related Security Entitlements to secure
payment of the Certificates according to their terms. Amounts held from time to
time in the Reserve Account will continue to be held by the Collateral Agent for
the benefit of Class A Certificateholders and the Class B Certificateholders,
but the Reserve Account shall not be an asset of the Trust. By acceptance of
their Certificates or interest therein, Certificateholders and Certificate
Owners shall be deemed to have appointed _________________, as Collateral Agent.
_________________ hereby accepts such appointment as Collateral Agent. The
Collateral Agent accepts such appointment and agrees to establish the Reserve
Account at the Corporate Trust Office and to comply with Section 7.1(f).
Section 7.7 Net Deposits. USAA Federal Savings Bank (in whatever
capacity) may make the remittances pursuant to Section 7.2 and Section 7.4
above, net of amounts to be retained by it or distributed to it (also in
whatever capacity) pursuant to Section 7.5, if (a) it shall be the Servicer and
(b) it is entitled, pursuant to Section 7.2, to make deposits on a monthly
basis, rather than a daily basis. The Servicer may remit amounts to the
Collection Account net of investment earnings accrued on such amounts pending
deposit into the Collection Account, whether or not the Servicer is then
entitled to make deposits on a monthly basis. Nonetheless, the Servicer shall
account for all of the above described amounts as if such amounts were deposited
and distributed separately.
Section 7.8 Statements to Certificateholders. On each Payment Date, the
Servicer shall prepare and furnish to the Trustee and the Paying Agent, and the
Paying Agent shall include with the distribution to each Certificateholder, a
statement substantially in the form of Exhibit E, based on information in the
certificate furnished pursuant to Section 6.8, setting forth for the related
Collection Period the following information:
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(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
Payment Date, after giving effect to payments allocated to principal
reported pursuant to clause (i) above;
(vi) the Pool Balance as of the close of business of the
Servicer on the last day of the preceding Collection Period;
(vii) the amount of the aggregate Realized Losses, if any, for
such Collection Period;
(viii) the aggregate Purchase Amount of Receivables
repurchased by the Depositor or purchased by the Servicer;
(ix) the balance of the Reserve Account on such Payment Date,
after giving effect to changes therein on such Payment Date; and
(x) the Specified Reserve Account Balance as of the close of
business on such Payment Date.
Each amount set forth pursuant to clauses (i), (ii) and (v) above shall be
expressed in the aggregate and as a dollar amount per $1,000 of original
denomination of a Certificate.
Within a reasonable period of time after the end of each calendar year,
but not later than the latest date permitted by law, the Servicer shall prepare
and furnish to the Trustee and the Paying Agent, and the Paying Agent shall
furnish to each Person who at any time during such calendar year shall have been
a Certificateholder, a statement containing the sum of the amounts determined in
clauses (i) and (ii) for such calendar year, for the purposes of such
Certificateholder's preparation of federal income tax returns.
ARTICLE VIII
[Yield Supplement Agreement
Section 8.1 Yield Supplement Agreement. Simultaneously with the
execution of this Agreement, the Depositor shall convey the Yield Supplement
Agreement to the Trust as part of the Trust Property. The Yield Supplement
Agreement, with respect to each Receivable (other
33
than Repurchased Receivables and Defaulted Receivables), provides for the
payment by the Depositor, to the extent of the funds available in the Yield
Supplement Account, on or prior to each Deposit Date of an amount (if positive)
calculated by the Servicer equal to one-twelfth of the difference between (i)
interest on such Receivable's Principal Balance as of the first day of the
preceding Collection Period calculated at a rate equal to the sum of the
weighted average of the Class A Pass-Through Rate and the Class B Pass-Through
Rate and the Servicing Fee Rate over (ii) interest accrued on such Receivable's
Principal Balance as of the first day of the preceding Collection Period at its
Contract Rate (in the aggregate for all Receivables with respect to any Payment
Date, the "Yield Supplement Amount").
Section 8.2 Yield Supplement Account. (a) The Depositor shall establish
and maintain in the name of the Collateral Agent a segregated trust account to
secure the Depositor's obligations under the Yield Supplement Agreement (the
"Yield Supplement Account"). The Yield Supplement Account and any amounts
therein shall not be property of the Trust, but shall be pledged to the
Collateral Agent for the benefit of Certificateholders.
(b) In order to provide for the prompt payment by the Depositor of the
Yield Supplement Amount, to assure availability of the amounts maintained in the
Yield Supplement Account and as security for the performance by the Depositor of
its obligations under the Yield Supplement Agreement, the Depositor, on behalf
of itself and its successors and assigns, hereby pledges to the Collateral Agent
and its successors and assigns for the benefit of the Certificateholders, all of
its right, title and interest in and to the Yield Supplement Account, and all
proceeds of the foregoing, including all other amounts and investments held from
time to time in the Yield Supplement Account including the Yield Supplement
Initial Deposit, subject, however, to the limitations set forth below, and
solely for the purpose of securing payment of the Yield Supplement Amount (all
of the foregoing, subject to the limitations set forth in this Section, the
"Yield Supplement Account Property"), to have and to hold all the aforesaid
property, rights and privileges unto the Collateral Agent, its successors and
assigns, in trust for the uses and purposes, and subject to the terms and
provisions set forth in this Section. The Collateral Agent hereby acknowledges
such transfer and accepts the trust hereunder and shall hold and distribute the
Yield Supplement Account Property in accordance with the terms and provisions of
this Section.
(c) Funds on deposit in the Yield Supplement Account shall be invested
by the Collateral Agent in Permitted Investments selected by the Depositor and
designated in writing by the Depositor to the Collateral Agent; provided,
however, that the Collateral Agent shall not be liable for any loss arising from
such investment in Permitted Investments. Funds on deposit in the Yield
Supplement Account shall be invested in Permitted Investments that will mature
so that all such funds will be available at the opening of business on each
Deposit Date; provided, however, that to the extent permitted by the Rating
Agencies, funds on deposit in the Yield Supplement Account may be invested in
Permitted Investments that mature later than the next Deposit Date. Funds
deposited in the Yield Supplement Account on a Deposit Date upon the maturity of
any Permitted Investments are not required to be (but may be) invested over
night. The Depositor will treat the funds, Permitted Investments and other
assets in the Yield Supplement Account as its own for Federal, state and local
income tax and franchise tax
34
purposes and will report on its tax returns all income, gain and loss from the
Yield Supplement Account.
(d) Each Permitted Investment made with funds from the Yield Supplement
Account shall be delivered to the Collateral Agent by causing the financial
institution then maintaining the Yield Supplement Account (such institution
being referred to as the "Yield Supplement Account Securities Intermediary") to
create a Security Entitlement in the Yield Supplement Account in favor of the
Trustee with respect to such Permitted Investment by indicating by book-entry
that such Permitted Investment has been credited to the Yield Supplement
Account. The Servicer shall only invest in Permitted Investments which the Yield
Supplement Account Securities Intermediary agrees to credit to the Yield
Supplement Account.
(e) Each of the Depositor and the Servicer agree to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments (including,
without limitation, any financing statements under the UCC or this Agreement) as
may be determined to be necessary, in order to perfect the security interests
created by this Section 8.2 and otherwise effectuate the purposes, terms and
conditions of this Section 8.2.
(f) Notwithstanding anything else contained herein, the Yield
Supplement Account shall only be established at Qualified Trust Institution
which agrees that it will (i) comply with Entitlement Orders (i.e., orders
directing the transfer or redemption of any financial assets credited to the
Yield Supplement Account) relating to the Yield Supplement Account issued by the
Collateral Agent without further consent by the Depositor; (ii) credit all
Permitted Investments to the Yield Supplement Account; (iii) treat each item of
property (including, without limitation, investment property, securities,
instruments and cash) credited to the Yield Supplement Account as a Financial
Asset; (iv) not enter into any agreement with any other person relating to the
Yield Supplement Account pursuant to which agreement it has agreed to comply
with Entitlement Orders made by such person; (v) not accept for credit to the
Yield Supplement Account any Permitted Investment which is registered in the
name of, or payable to the order of, or specially indorsed to, any person other
than such Qualified Trust Institution unless it has been indorsed to such
Qualified Trust Institution or is indorsed in blank and (vi) such Qualified
Trust Institution has agreed that it will waive any right of set-off unrelated
to its fees for such Account.
(g) No later than 11:00 A.M. (New York time) on each Deposit Date, the
Servicer shall deposit to the Collection Account an amount equal to the Yield
Supplement Amount for the related Collection Period; provided that if, on any
Payment Date, the Servicer fail to pay the Yield Supplement Amount, then, in
such event, the Trustee shall direct the Collateral Agent to withdraw from the
Yield Supplement Account an amount equal to such deficiency and deposit such
amount to the Collection Account.
(h) The Yield Supplement Account shall be under the sole custody and
control of the Collateral Agent. If, at any time, the Yield Supplement Account
ceases to be a segregated trust account, the Collateral Agent shall within ten
(10) Business Days (or such longer period, not to exceed thirty (30) calendar
days, as to which each Rating Agency may consent) establish a new
35
Yield Supplement Account as a segregated trust account and shall transfer any
cash and/or any investments that are in the existing Yield Supplement Account
which is no longer a segregated trust account to such new Yield Supplement
Account.
(i) Amounts on deposit in the Yield Supplement Account will be released
to the Depositor on each Payment Date to the extent that the amount on deposit
in the Yield Supplement Account exceeds the Specified Yield Supplement Balance.
Upon a distribution to the Depositor of amounts from the Yield Supplement
Account, the Certificateholders will not have any rights in, or claims to, such
amounts. Amounts properly distributed to the Depositor from the Yield Supplement
Account or otherwise shall not be available under any circumstances to the
Trust, the Trustee, the Collateral Agent or the Certificateholders and the
Depositor shall in no event thereafter be required to refund any such
distributed amounts.
(j) Investment earnings attributable to the Yield Supplement Account
Property and proceeds therefrom shall be held by the Collateral Agent for the
benefit of the Depositor. Investment earnings attributable to the Yield
Supplement Account Property shall not be available to pay the Yield Supplement
Amount and shall not otherwise be subject to any claims or rights of the
Certificateholders or the Servicer. The Collateral Agent shall cause all
investment earnings attributable to the Yield Supplement Account to be
distributed on each Payment Date to the Depositor.]
ARTICLE IX
The Certificates
Section 9.1 The Certificates. Unless otherwise specified in this
Agreement, the Certificates shall be issued in denominations of $1,000 and
integral multiples thereof; provided that one Class A Certificate and one Class
B Certificate may be issued in a denomination that includes any residual portion
of the Original Class A Certificate Balance and the Original Class B Certificate
Balance. The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an Authorized Officer or other authorized signatory of
the Trustee. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be valid and binding
obligations of the Trust, notwithstanding that such individuals shall have
ceased to be so authorized prior to the execution, authentication and delivery
of such Certificates or did not hold such offices or positions at the date of
such Certificates. No Certificate shall entitle the Holder to any benefit under
this Agreement, or shall be valid for any purpose, unless there shall appear on
such Certificate an authentication substantially in the form set forth in
Exhibit A and Exhibit B hereto, as applicable, executed by the Trustee by manual
or facsimile signature. Such authentication shall constitute conclusive evidence
that such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
Section 9.2 Execution, Authentication and Delivery of Certificates. In
exchange for the Receivables and the other assets of the Trust, simultaneously
with the sale, assignment and transfer to the Trustee of the Receivables, the
constructive delivery to the Trustee of the
36
Receivable Files and the delivery to the Trustee of the other components of the
Trust, the Trustee shall deliver to, or upon the order of, the Depositor,
Certificates duly executed by the Trustee, on behalf of the Trust, and
authenticated by the Trustee in authorized denominations equaling in the
aggregate the Original Pool Balance and evidencing the entire ownership of the
Trust.
Section 9.3 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and certificate registrar (the "Transfer Agent
and Certificate Registrar"), in accordance with the provisions of Section 9.7, a
register (the "Certificate Register") in which, subject to such reasonable
regulations as it may prescribe, the Transfer Agent and Certificate Registrar
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Certificate Register shall
list the names of the Certificateholders and their respective ownership
interests in the Trust, and shall be treated as definitive and binding for all
purposes hereunder. Only those persons registered as Certificateholders in the
Certificate Register shall be recognized as having any interest in the Trust or
Trust estate or as possessing the rights of a Certificateholder hereunder. A
transfer of ownership of a Certificate shall be effectuated only by an
appropriate entry in the Certificate Register. _________________ is hereby
initially appointed Transfer Agent and Certificate Registrar for the purpose of
registering Certificates and transfers and exchanges of Certificates as herein
provided. In the event that, subsequent to the date of issuance of the
Certificates, the Trustee is unable to act as Transfer Agent and Certificate
Registrar, the Trustee shall, with the consent of the Depositor, appoint another
bank or trust company, having an office or agency located in New York City and
which agrees to act in accordance with the provisions of this Agreement
applicable to it, to act, as successor Transfer Agent and Certificate Registrar
under this Agreement.
_________________ shall be permitted to resign as Transfer Agent and
Certificate Registrar upon 30 days' written notice to the Depositor and the
Servicer; provided, however, that such resignation shall not be effective and
_________________ shall continue to perform its duties as Transfer Agent and
Certificate Registrar until the Trustee has appointed a successor Transfer Agent
and Certificate Registrar with the consent of the Depositor.
Upon surrender for registration of transfer of any Class A Certificate
or Class B Certificate at the office or agency of the Transfer Agent and
Certificate Registrar maintained pursuant to Section 9.7, the Transfer Agent and
Certificate Registrar shall make an appropriate entry in the Certificate
Register to reflect such transfer, and the Trustee shall execute, authenticate
and (if the Transfer Agent and Certificate Registrar is different than the
Trustee, then the Transfer Agent and Certificate Registrar shall) deliver, in
the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount. At the
option of a Certificateholder, Class A Certificates or Class B Certificates may
be exchanged for other Class A Certificates or Class B Certificates, as the case
may be, in authorized denominations of a like aggregate amount at such office or
agency.
Whenever any Class A Certificate or Class B Certificate is surrendered
for exchange, the Trustee shall execute, authenticate and (if the Transfer Agent
and Certificate Registrar is
37
different than the Trustee, then the Transfer Agent and Certificate Registrar
shall) deliver the Certificates which the Certificateholder making the exchange
is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Transfer
Agent and Certificate Registrar duly executed by the Holder, which signature on
such assignment must be guaranteed by a member of the New York Stock Exchange or
a commercial bank or trust company.
Each Certificate surrendered for registration of transfer or exchange
shall be cancelled by the Transfer Agent and Certificate Registrar or retained
in accordance with its standard retention policy and disposed of or retained in
a manner satisfactory to the Trustee and the Depositor.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Transfer Agent and Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
Section 9.4 Mutilated, Destroyed, Lost, or Stolen Certificates. If (a)
any mutilated Class A Certificate or Class B Certificate shall be surrendered to
the Transfer Agent and Certificate Registrar, or if the Transfer Agent and
Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss, or theft of any Class A Certificate or Class B Certificate
and (b) there shall be delivered to the Trustee and the Transfer Agent and
Certificate Registrar such security or indemnity as may be required to save each
of them harmless, then, in the absence of notice to the Trustee that such, Class
A Certificate or Class B Certificate shall have been acquired by a bona fide
purchaser, the Trustee on behalf of the Trust shall execute, authenticate and
(if the Transfer Agent and Certificate Registrar is different from the Trustee,
then Transfer Agent and Certificate Registrar shall) deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Class A Certificate or
Class B Certificate, a new Class A Certificate or Class B Certificate of like
tenor and denomination but bearing a number not contemporaneously outstanding.
In connection with the issuance of any new Class A Certificate or Class B
Certificate under this Section 9.4, the Trustee or the Transfer Agent and
Certificate Registrar, as the case may be, may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any Replacement Class A Certificate or Class B Certificate
issued pursuant to this Section 9.4 shall constitute conclusive evidence of
ownership in the Trust, as if originally issued, whether or not a lost, stolen,
or destroyed Certificate shall be found at any time.
Section 9.5 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Certificate Registrar or any agent of any of them may treat
the Person in whose name any Certificate shall be registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
7.5(b) and for all other purposes whatsoever, and none of the Trustee, the
Paying Agent, the Transfer Agent and Certificate Registrar or any agent of any
of them shall be bound by any notice to the contrary.
38
Section 9.6 Access to List of Certificateholders' Names and Addresses.
The Transfer Agent and Certificate Registrar shall furnish to the Servicer or
the Paying Agent (or to the Trustee if the Trustee is not the Transfer Agent and
Certificate Registrar), within 15 days after receipt by the Transfer Agent and
Certificate Registrar of a request therefor from the Servicer, the Trustee or
the Paying Agent in writing, a list of the names and addresses of the
Certificateholders as of the most recent Record Date, in such form as the
Servicer, the Trustee or the Paying Agent may reasonably require. If, at such
time, if any, as Definitive Certificates have been issued, three or more
Certificateholders or one or more Holders of Certificates aggregating not less
than 25% of the Pool Balance apply in writing to the Transfer Agent and
Certificate Registrar (or the Trustee if the Trustee is acting as the Transfer
Agent and Certificate Registrar), and such application states that the
applicants desire to communicate with other Certificateholders with respect to
their rights under this Agreement or under the Certificates, and such
application is accompanied by a copy of the communication that such applicants
propose to transmit, then the Transfer Agent and Certificate Registrar shall,
within five Business Days after the receipt of such application, afford such
applicants access during normal business hours to the current list of
Certificateholders. Each Certificateholder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Servicer, the
Trustee, the Transfer Agent and Certificate Registrar or any of their respective
agents accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
Section 9.7 Maintenance of Office or Agency. The Transfer Agent and
Certificate Registrar shall maintain in New York, New York an office or offices
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange. The Transfer Agent and Certificate Registrar initially
designates its agency located at ___________________, Attention:
____________________, as its office for such purposes. The Transfer Agent and
Certificate Registrar shall give prompt written notice to the Trustee, the
Servicer and to Certificateholders of any change in the location of such office
or agency.
Section 9.8 Book-Entry Certificates. Upon original issuance, the Class
A Certificates and the Class B Certificates, other than the Class A Certificate
and the Class B Certificate representing the residual amount of the Original
Class A Certificate Balance and the Original Class B Certificate Balance,
respectively, which shall be issued upon the written order of the Depositor,
shall be issued in the form of one or more typewritten Certificates representing
the Book-Entry Certificates, to be delivered to or to the order of the initial
Clearing Agency, by, or on behalf of, the Depositor. The Certificates shall
initially be registered on the Certificate Register in the name of CEDE & Co.,
the nominee of the initial Clearing Agency, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Class A Certificates or the Class B Certificates, as the case may be,
except as provided in Section 9.10. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to Class A
Certificateholders or the Class B Certificateholders pursuant to Section 9.10:
(i) the provisions of this Section 9.8 shall be in full force
and effect;
39
(ii) the Depositor, the Servicer, the Paying Agent, the
Transfer Agent and Certificate Registrar and the Trustee may deal with
the Clearing Agency and the Clearing Agency Participants for all
purposes (including the making of distributions in respect of the
Certificates and the taking of actions by the Certificateholders) as
the authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 9.8
conflict with any other provisions of this Agreement, the provisions of
this Section 9.8 shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency (or to the extent Certificate Owners are
not Clearing Agency Participants through the Clearing Agency
Participants through which such Certificate Owners own Book-Entry
Certificates) and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency
and/or the Clearing Agency Participants and all references in this
Agreement to actions by Certificateholders shall refer to actions taken
by the Clearing Agency upon instructions from the Clearing Agency
Participants, and all references in this Agreement to distributions,
notices, reports and statements to Certificateholders shall refer to
distributions, notices, reports and statements to the Clearing Agency
or its nominee, as registered holder of the Certificates, as the case
may be, for distribution to Certificate Owners in accordance with the
procedures of the Clearing Agency; and
(v) pursuant to the Depository Agreement, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the Certificates to the Clearing Agency Participants, for
distribution by such Clearing Agency Participants to the Certificate
Owners or their nominees.
Section 9.9 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 9.10, the Trustee and the Paying Agent shall give all such
notices and communications specified herein to be given by it to
Certificateholders to the Clearing Agency.
Section 9.10 Definitive Certificates. If (i) (A) the Servicer advises
the Trustee in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement and (B)
the Trustee or the Servicer is unable to locate a qualified successor, (ii) the
Servicer, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Servicing Termination, Certificate Owners representing
in the aggregate not less than 50% of the Pool Balance advise the Trustee and
the Clearing Agency through the Clearing Agency Participants in writing, and the
Clearing Agency shall so notify the Trustee, that the continuation of a
book-entry system through the Clearing Agency, is no longer in the best
interests of the Certificate Owners, the Trustee shall notify the Clearing
Agency of the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Trustee by the Clearing Agency of
40
Certificates registered in the name of the nominee of the Clearing Agency,
accompanied by re-registration instructions from the Clearing Agency for
registration, the Trustee shall execute, on behalf of the Trust, authenticate
and deliver Definitive Certificates in accordance with such instructions. The
Servicer shall arrange for, and will bear all costs of, the printing and
issuance of such Definitive Certificates. None of the Depositor, the Servicer,
the Transfer Agent and Certificate Registrar or the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on such instructions. Upon the issuance of
Definitive Certificates, all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Transfer Agent and Certificate Registrar, to the extent
applicable with respect to such Definitive Certificates and the Trustee, the
Paying Agent and the Transfer Agent and Certificate Registrar shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder.
Section 9.11 Appointment of Paying Agent.
(a) The Paying Agent shall have the revocable power to withdraw funds
from the Collection Account and make distributions to the Certificateholders
pursuant to Section 7.5 hereof. The Trustee may revoke such power and remove the
Paying Agent, if the Trustee determines in its sole discretion that the Paying
Agent shall have failed to perform its obligations under this Agreement in any
material respect or for other good cause. The Paying Agent shall initially be
_________________. _________________ shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Servicer, the Trustee and the
Collateral Agent. In the event that _________________ shall no longer be the
Paying Agent, the Trustee shall appoint a successor to act as Paying Agent,
which shall be a bank or trust company. If at any time the Trustee shall be
acting as the Paying Agent, the provisions of Sections 13.2, 13.4 and 13.5 shall
apply to the Trustee in its role as Paying Agent.
(b) The Trustee shall cause the Paying Agent (if other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders or other party entitled thereto until such sums shall be paid
to such Certificateholders or other party entitled thereto and shall agree, and
if the Trustee is the Paying Agent it hereby agrees, that it shall comply with
all requirements of the Code regarding the withholding by the Trustee of
payments in respect of federal income taxes due from Class A Certificateholders
or Class B Certificateholders.
(c) _________________ in its capacity as initial Paying Agent hereunder
agrees that it (i) will hold all sums held by it hereunder for payment to the
Certificateholders in trust for the benefit of the Certificateholders or other
parties entitled thereto until such sums shall be paid to such
Certificateholders or other party entitled thereto and (ii) shall comply with
all requirements of the Code regarding the withholding by the Trustee of
payments in respect of federal income taxes due from Certificate Owners.
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Section 9.12 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Any authenticating agent appointed by
the Trustee shall require the consent of the Depositor, which consent may not be
unreasonably withheld.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and the Depositor. The Trustee may at any
time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Depositor. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
an authenticating agent shall cease to be acceptable to the Trustee or the
Depositor, the Trustee promptly may appoint a successor authenticating agent
with the consent of the Depositor. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an authenticating agent. Any successor authenticating agent
appointed by the Trustee shall require the consent of the Depositor, which
consent may not be unreasonably withheld.
(d) The Servicer shall pay the Authenticating Agent from time to time
reasonable compensation for its services under this Section 9.12.
(e) The provisions of Sections 13.2, 13.4 and 13.5 shall be applicable
to any authenticating agent.
(f) Pursuant to an appointment made under this Section 9.12, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
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This is one of the certificates referred to in the within mentioned
Agreement.
[NAME OF TRUSTEE]
as Trustee
By:_______________________________________
Authorized Signatory
or
[NAME OF AUTHENTICATING AGENT]
as Authenticating Agent
for the Trustee,
By:_______________________________________
Authorized Signatory
Section 9.13 Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, when required, to the Depositor or the
Servicer. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Agreement and
conclusive in favor of the Trustee, the Depositor and the Servicer, if made in
the manner provided in this Section 9.13.
(b) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done,
by the Trustee, the Depositor or the Servicer in reliance thereon, whether or
not notation of such action is made upon such Certificate.
(d) The Trustee may require such additional proof of any matter
referred to in this Section 9.13 as it shall deem necessary.
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ARTICLE X
The Depositor
Section 10.1 Representations of Depositor. The Depositor makes the
following representations on which the Trustee shall rely in accepting the
Receivables in trust and authenticating the Certificates. The representations
shall speak as of the execution and delivery of this Agreement, and shall
survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Depositor has been
duly organized and is validly existing as a limited liability company
in good standing under the laws of Delaware, with power and authority
to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had
at all relevant times, and has, power, authority, and legal right to
acquire and own the Receivables.
(ii) Power and Authority. The Depositor has the power and
authority to execute and deliver this Agreement and to carry out its
terms; the Depositor has full power and authority to sell and assign
the property to be sold and assigned to the Trustee as part of the
Trust and has duly authorized such sale and assignment to the Trustee
by all necessary corporate action; and the execution, delivery, and
performance of this Agreement has been duly authorized by the Depositor
by all necessary limited liability company action.
(iii) Binding Obligations. This Agreement constitutes a legal,
valid, and binding obligation of the Depositor enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting
the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not (a) conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under, the limited liability company agreement of the
Depositor, or conflict with or breach any of the material terms or
provisions of, or constitute (with or without notice or lapse of time)
a default under, any indenture, agreement, or other instrument to which
the Depositor is a party or by which it is bound, (b) result in the
creation or imposition of any lien upon any of its properties pursuant
to the terms of any such indenture, agreement, or other instrument, or
(c) violate any law or, to the best of the Depositor's knowledge, any
order, rule, or regulation applicable to the Depositor of any court or
of any federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the
Depositor or its properties.
(v) No Proceedings. There are no proceedings or investigations
pending, or, to the best of the Depositor's knowledge, threatened,
before any court, regulatory body,
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administrative agency, or other governmental instrumentality having
jurisdiction over the Depositor or its properties (a) asserting the
invalidity of this Agreement or the Certificates, (b) seeking to
prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by this Agreement, (c) seeking any
determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity
or enforceability of, this Agreement or the Certificates or (d)
relating to the Depositor and which might adversely affect the federal
income tax attributes of the Certificates.
Section 10.2 Liability of Depositor; Indemnities. The Depositor shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor in such capacity under this Agreement
and shall have no other obligations or liabilities hereunder.
The Depositor shall indemnify, defend and hold harmless the Trustee and
the Trust from and against any taxes that may at any time be asserted against
the Trustee or the Trust with respect to, and as of the date of, the sale of the
Receivables to the Trust or the issuance and original sale of the Certificates,
including any sales, gross receipts, general corporation, tangible or intangible
personal property, privilege, or license taxes (but not, in the case of the
Trust, including any taxes asserted with respect to ownership of the Receivables
or federal or other income taxes, including franchise taxes measured by net
income), arising out of the transactions contemplated by this Agreement, and
costs and expenses in defending against the same.
The Depositor shall indemnify, defend, and hold harmless the Trustee,
its officers, directors, employees and agents or the Trust from and against any
loss, liability or expense incurred by reason of (i) the Depositor's willful
misfeasance, bad faith, or negligence in the performance of its duties
hereunder, or by reason of reckless disregard of the obligations and duties
hereunder and (ii) the Depositor's violation of federal or state securities laws
in connection with the registration of the sale of the Certificates.
Indemnification under this Section 10.2 shall survive the termination
of this Agreement and the resignation or removal of the Trustee and shall
include reasonable fees and expenses of counsel and expenses of litigation. If
the Depositor shall have made any indemnity payments to the Trust or the Trustee
pursuant to this Section 10.2 and the Trust or the Trustee thereafter shall
collect any of such amounts from others, the Trust shall repay such amounts to
the Depositor, without interest.
Section 10.3 Merger or Consolidation of Depositor. Any corporation or
other entity (i) into which the Depositor may be merged or consolidated, (ii)
which may result from any merger, conversion, or consolidation to which the
Depositor shall be a party, or (iii) which may succeed to all or substantially
all of the business of the Depositor, which corporation or other entity executes
an agreement of assumption to perform every obligation of the Depositor under
this Agreement, shall be the successor to the Depositor hereunder without the
execution or filing of any document or any further act by any of the parties to
this Agreement. The Depositor shall give prompt written notice of any merger or
consolidation to the Trustee, the Servicer and the Rating Agencies.
45
Section 10.4 Limitation on Liability of Depositor and Others. The
Depositor and any director, officer, employee or agent of the Depositor may rely
in good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor shall not be under any obligation under this
Agreement to appear in, prosecute, or defend any legal action that shall be
unrelated to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.
Section 10.5 Depositor May Own Certificates. The Depositor and any
Person controlling, controlled by, or under common control with the Depositor
may in its individual or any other capacity become the owner or pledgee of
Certificates with the same rights as it would have if it were not the Depositor
or an affiliate thereof, except as otherwise provided in the definition of
"Certificateholder", "Class A Certificateholder" and "Class B Certificateholder"
specified in Section 1.1. Certificates so owned by or pledged to the Depositor
or such controlling or commonly controlled Person shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Certificates.
ARTICLE XI
The Servicer
Section 11.1 Representations of Servicer. The Servicer makes the
following representations on which the Trustee shall rely in accepting the
Receivables in trust and authenticating the Certificates. The representations
shall speak as of the execution and delivery of this Agreement, and shall
survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Servicer has been duly
organized and is validly existing as a federally chartered savings
association in good standing under the laws of the United States of
America, with power and authority to own its properties and to conduct
its business as such properties are currently owned and such business
is presently conducted, and had at all relevant times, and has, power,
authority, and legal right to acquire, own, sell, and service the
Receivables and to hold the Receivable Files as custodian on behalf of
the Trustee.
(ii) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery, and performance of this Agreement
has been duly authorized by the Servicer by all necessary corporate
action.
(iii) Binding Obligations. This Agreement constitutes a legal,
valid, and binding obligation of the Servicer enforceable in accordance
with its terms subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, liquidation or other similar laws and
equitable principles relating to or affecting the enforcement of
creditors' rights in general (including creditors of federally
chartered savings associations) and by
46
general principles of equity regardless of whether such enforceability
is considered in a proceeding in equity or law.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (a) (with or without notice or lapse of
time) a default under, the articles of association or bylaws of the
Servicer, or conflict with or breach any of the material terms or
provisions of, or constitute (with or without notice or lapse of time)
a default under, any indenture, agreement, or other instrument to which
the Servicer is a party or by which it shall be bound, (b) result in
the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, or other
instrument or (c) violate any law or, to the best of the Servicer's
knowledge, any order, rule, or regulation applicable to the Servicer of
any court or of any federal or state regulatory body, administrative
agency, or other governmental instrumentality having jurisdiction over
the Servicer or its properties.
(v) No Proceedings. There are no proceedings or investigations
pending, or to the best of the Servicer's knowledge, threatened, before
any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Servicer or
its properties (a) asserting the invalidity of this Agreement or the
Certificates, (b) seeking to prevent the issuance of the Certificates
or the consummation of any of the transactions contemplated by this
Agreement, (c) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement
or the Certificates, or (d) relating to the Servicer and which might
adversely affect the federal income tax attributes of the Certificates.
(vi) Fidelity Bond. The Servicer maintains a fidelity bond in
such form and amount as is customary for banks acting as custodian of
funds and documents in respect of retail automotive installment sales
contracts.
Section 11.2 Liability of Servicer; Indemnities. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement and shall have no other
obligations or liabilities hereunder.
(i) The Servicer shall defend, indemnify, and hold harmless
the Trustee, its officers, directors, employees and agents, the Trust
and the Certificateholders from and against any and all costs,
expenses, losses, damages, claims, and liabilities, arising out of or
resulting from the use, ownership, or operation by the Servicer or any
affiliate thereof of a Financed Vehicle.
(ii) The Servicer shall indemnify, defend, and hold harmless
the Trustee, its officers, directors, employees and agents from and
against any taxes that may at any time be asserted against the Trustee
or the Trust with respect to the transactions contemplated in this
Agreement, including, without limitation, any sales, gross receipts,
general corporation, tangible or intangible personal property,
privilege, or license taxes (but not
47
including any taxes asserted with respect to, and as of the date of,
the sale of the Receivables to the Trust or the issuance and original
sale of the Class A Certificates and the Class B Certificates, or
asserted with respect to ownership of the Receivables or federal or
other income taxes, including franchise taxes measured by net income)
arising out of distributions on the Certificates and costs and expenses
in defending against the same.
(iii) The Servicer shall indemnify, defend, and hold harmless
the Trustee, its officers, directors, employees and agents and the
Trust and the Certificateholders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that
such cost, expense, loss, claim, damage, or liability arose out of, or
was imposed upon the Trustee and the Trust or the Certificateholders
through the willful misfeasance, negligence, or bad faith of the
Servicer in the performance of its duties under this Agreement or by
reason of reckless disregard of its obligations and duties under this
Agreement, except that employees of the Servicer or its affiliates will
be protected against liability that would otherwise be imposed by
reason of negligence.
(iv) The Servicer shall indemnify, defend, and hold harmless
the Trustee, its officers, directors, employees and agents, from and
against all costs, expenses, losses, claims, damages, and liabilities
arising out of or incurred in connection with the acceptance or
performance of the trusts and duties herein contained, except to the
extent that such costs, expenses, losses, claims, damage or
liabilities: (1) shall be due to the willful misfeasance, bad faith or
negligence of the Trustee; (2) shall arise from the Trustee's breach of
any of its representations or warranties set forth in Section 13.14; or
(3) shall be one as to which the Depositor is required to indemnify the
Trustee.
Indemnification under this Section 11.2 shall include reasonable fees
and expenses of counsel and expenses of litigation. If the Servicer shall have
made any indemnity payments pursuant to this Section 11.2 and the recipient
thereafter collects any of such amounts from others, the recipient shall
promptly repay such amounts to the Servicer, without interest. The
indemnification obligations of the Servicer set forth in this Section 11.2 shall
survive the termination of this Agreement, the termination of the Servicer with
respect to any act or failure to act which occurs prior to such Servicer's
termination and the resignation or removal of the Trustee.
Section 11.3 Merger or Consolidation of Servicer. Any corporation or
other entity (i) into which the Servicer may be merged or consolidated, (ii)
which may result from any merger, conversion, or consolidation to which the
Servicer shall be a party, (iii) which may succeed to all or substantially all
of the business of the Servicer, which corporation or other entity executes an
agreement of assumption to perform every obligation of the Servicer hereunder,
or (iv) in which 50% or more of the equity of which is owned, directly or
indirectly by the Servicer shall be the successor to the Servicer under this
Agreement without the execution or filing of any document or any further act on
the part of any of the parties to this Agreement. The Servicer shall promptly
inform the Trustee, the Depositor and the Rating Agencies in writing of any such
merger or consolidation.
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Section 11.4 Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Trust,
the Trustee, or the Certificateholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such Person against any liability that
would otherwise be imposed by reason of willful misfeasance, negligence, or bad
faith in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any director or
officer or employee or agent of the Servicer may rely in good faith on the
advice of counsel or on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this Agreement.
(b) The Servicer and any director or officer or employee or agent of
the Servicer shall be indemnified by the Trust and held harmless against any
loss, liability, or expense including reasonable attorneys' fees and expenses
incurred in connection with any legal action relating to the performance of the
Servicer's duties under this Agreement, other than (i) any loss or liability
otherwise reimbursable pursuant to this Agreement; (ii) any loss, liability, or
expense incurred solely by reason of the Servicer's willful misfeasance,
negligence, or bad faith in the performance of its duties hereunder or by reason
of reckless disregard of its obligations and duties under this Agreement; and
(iii) any loss, liability, or expense for which the Trust is to be indemnified
by the Servicer under this Agreement. Any amounts due the Servicer pursuant to
this subsection shall be payable on a Payment Date from the Total Collections on
deposit in the Collection Account only after all payments required to be made on
such date to the Certificateholders and the Servicer have been made, payments of
amounts, if any, due the Trustee from the Trust pursuant to Section 13.8 have
been made, and deposits of any amount required to be deposited into the Reserve
Account pursuant to Section 7.5(b)(vi) to maintain the amount on deposit therein
(exclusive of investment income and earnings on amounts on deposit therein) at
the Specified Reserve Account Balance on such date have been made.
(c) Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute, or defend any legal action that
shall not be incidental to its obligations under this Agreement, and that in its
opinion may involve it in any expense or liability; provided, however, that the
Servicer may undertake any reasonable action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
to this Agreement and the interests of the Certificateholders under this
Agreement. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs, and liabilities of the
Trust, and the Servicer shall be entitled to be reimbursed therefor. Any amounts
due the Servicer pursuant to this subsection shall be payable on a Payment Date
from the Total Collections on deposit in the Collection Account only after all
payments required to be made on such date to the Certificateholders and the
Servicer have been made, payments of amounts, if any, due the Trustee from the
Trust pursuant to Section 13.8 have been made and deposits of any amount
required to be deposited into the Reserve Account pursuant to Section 7.5(b)(vi)
to maintain the amount on deposit therein (exclusive of investment income and
49
earnings on amounts on deposit therein) at the Specified Reserve Account Balance
on such date have been made.
The Person to be indemnified shall provide the Trustee with a
certificate and accompanying Opinion of Counsel requesting indemnification and
setting forth the basis for such request.
Section 11.5 Servicer Not To Resign. The Servicer shall not resign from
its obligations and duties under this Agreement except (i) upon determination
that the performance of its duties shall no longer be permissible under
applicable law or (ii) in the event of the appointment of a successor Servicer
pursuant to Section 12.2, upon satisfaction of the Rating Agency Condition.
Notice of any such determination permitting the resignation of USAA Federal
Savings Bank shall be communicated to the Trustee, and the Rating Agencies at
the earliest practicable time (and, if such communication is not in writing,
shall be confirmed in writing at the earliest practicable time) and any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Trustee concurrently with
such notice. No such resignation shall become effective until the Trustee or a
successor Servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 12.2.
Section 11.6 Delegation of Duties. So long as USAA Federal Savings Bank
or the Trustee acts as Servicer, the Servicer shall have the right, in the
ordinary course of its business, to delegate any of its duties under this
Agreement to any Person. Any compensation payable to such Person shall be paid
by the Servicer from its own funds and none of the Trust, the Trustee or the
Certificateholders shall have any liability to such Person with respect thereto.
Notwithstanding any delegation of duties by the Servicer pursuant to this
Section 11.6, the Servicer shall not be relieved of its liability and
responsibility with respect to such duties, and any such delegation shall not
constitute a resignation within the meaning of Section 11.5 hereof. Any
agreement that may be entered into by the Servicer and a Person that provides
for any delegation of the Servicer's duties hereunder shall be deemed to be
between the Servicer and such Person alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect thereto.
ARTICLE XII
Events of Servicing Termination
Section 12.1 Events of Servicing Termination. If any one of the
following events (an "Event of Servicing Termination") shall occur and be
continuing:
(i) any failure by the Servicer (or so long as the Seller is
the Servicer, the Seller) to deliver to the Trustee, for distribution
to Certificateholders, any proceeds or payment required to be so
delivered under the terms of the Certificates and this Agreement (or,
in the case of a payment or deposit to be made not later than any
Deposit Date, the failure to make such payment or deposit on the
related Payment Date), in each case that continues unremedied for a
period of five Business Days after (A) discovery by an officer of the
50
Servicer (or so long as the Seller is the Servicer, the Seller) or (B)
written notice (1) to the Servicer by the Trustee or (2) to the Trustee
and the Servicer (or so long as the Seller is the Servicer, the Seller)
by the Holders of Certificates evidencing not less than 25% of the Pool
Balance;
(ii) failure on the part of the Servicer (or so long as the
Seller is the Servicer, the Seller) duly to observe or to perform in
any material respect any other covenants or agreements of the Servicer
(or so long as the Seller is the Servicer, the Seller) set forth in the
Certificates or in this Agreement, which failure shall (a) materially
and adversely affect the rights of the Trust or the Certificateholders
(which determination shall be made without regard to whether funds on
deposit in the Reserve Account are available to the Certificateholders)
and (b) continues unremedied for a period of 90 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given (1) to the Servicer (or so long as the
Seller is the Servicer, the Seller) by the Trustee or (2) to the
Trustee and the Servicer (or so long as the Seller is the Servicer, the
Seller) by the Holders of Certificates evidencing not less than 25% of
the Pool Balance; provided, however, that a failure on the part of the
Servicer, other than USAA Federal Savings Bank for so long as it is the
Servicer, to observe and comply with the provisions of Section 11.6 or
to meet the eligibility criteria set forth in Section 12.2 shall
constitute an Event of Servicing Termination without regard to (a) and
(b) above;
(iii) So long as USAA Federal Savings Bank or another
depository institution is not the Servicer, the entry of a decree or
order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver, or
liquidator for the Servicer in any insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings, or for
the winding up or liquidation of its respective affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of sixty (60) consecutive days; or
(iv) So long as USAA Federal Savings Bank or another
depository institution is not the Servicer, the consent by the Servicer
to the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings of or relating to the Servicer of
or relating to substantially all of its property; or the Servicer shall
admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntary suspend payment of its
obligations or become insolvent;
then, and in each and every case and so long as an Event of Servicing
Termination shall not have been remedied, either the Trustee, or the Holders of
Certificates evidencing not less than a majority of the Pool Balance, by notice
given in writing to the Servicer (and to the Trustee if given by the
Certificateholders) may terminate all of the rights and obligations of the
Servicer under this Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Certificates or the Receivables or otherwise, shall
pass to and be vested in the Trustee pursuant to this Section 12.1;
51
and, without limitation, the Trustee shall be hereby authorized and empowered to
execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivable Files, or otherwise. The predecessor Servicer
shall cooperate with the successor Servicer and the Trustee in effecting the
termination of the responsibilities and rights of the predecessor Servicer under
this Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by the
predecessor Servicer for deposit, shall have been deposited by the Servicer in
the Collection Account, or shall thereafter be received with respect to a
Receivable. All reasonable costs and expenses (including attorneys' fees and
disbursements) incurred in connection with transferring the Receivable Files to
the successor Servicer and amending this Agreement to reflect such succession as
Servicer pursuant to this Section 12.1 shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses. The
Trustee shall give written notice of any termination of the Servicer to the
Certificateholders and the Rating Agencies.
Section 12.2 Trustee to Act; Appointment of Successor. Upon the
Servicer's receipt of notice of termination pursuant to Section 12.1 the Trustee
shall, and upon the Servicer's resignation pursuant to Section 11.5 the Trustee
may, be the successor in all respects to the Servicer in its capacity as
Servicer under this Agreement, and, in such case, shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the Servicer by the terms and provisions of this Agreement. As
compensation therefor, the Trustee shall be entitled to such compensation
(whether payable out of the Collection Account or otherwise) as the Servicer
would have been entitled to under this Agreement if no such notice of
termination or resignation had been given. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it shall be
legally unable so to act, appoint, or petition a court of competent jurisdiction
to appoint, any established financial institution, having a net worth of not
less than $100,000,000 as of the last day of the most recent fiscal quarter for
such institution and whose regular business shall include the servicing of
automobile receivables, as successor Servicer under this Agreement; provided,
that the Rating Agency Condition shall be satisfied in connection with such
appointment. In connection with such appointment, the Trustee may make such
arrangements for the compensation of such successor Servicer out of payments on
Receivables as it and such successor Servicer shall agree; provided, however,
that no such compensation shall be in excess of that permitted the Servicer
under this Agreement. The Trustee and such successor Servicer shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Unless the Trustee shall be prohibited by law from so acting,
the Trustee shall not be relieved of its duties as successor Servicer under this
Section 12.2 until the newly appointed successor Servicer shall have assumed the
responsibilities and obligations of the Servicer under this Agreement.
Section 12.3 Notification to Certificateholders. Upon delivery of
written notice by the Trustee to the Servicer or receipt by the Trustee of
written notice from Holders of Certificates evidencing not less than 25% of the
Pool Balance of an Event of Servicing Termination or upon any Servicer
termination, or appointment of a successor Servicer pursuant to this Article
XII, the
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Trustee shall give prompt written notice thereof to Certificateholders at their
respective addresses of record, to the Depositor and to the Rating Agencies.
Section 12.4 Waiver of Past Defaults. The Holders of Certificates
evidencing not less than a majority of the Pool Balance, may, on behalf of all
Holders of Certificates, waive any default by the Servicer in the performance of
its obligations hereunder and its consequences, except a default in the failure
to make any required deposits to or payments from the Collection Account in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Servicing Termination arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Servicer shall give prompt written notice of any waiver to the Rating
Agencies.
ARTICLE XIII
The Trustee
Section 13.1 No Power to Engage in Business or to Vary Investments.
Notwithstanding any provision or agreement to the contrary in this Agreement or
in any other agreement, the Trustee, acting on behalf of the Trust (but not
individually), shall not have any power to engage in any business, commercial or
other activity for profit, and the Trustee and the Servicer shall not have any
power to vary the Trust estate, whether consisting of a Receivable, a Permitted
Investment or any other amount (other than cash payments received with respect
to Receivables) in any account maintained for the benefit of the Trust or the
Certificateholders or Certificate Owners, by disposition of said property,
investment or amount and the reinvestment of the proceeds realized or by any
other action calculated to take advantage of any variation or change in the
market or in market conditions, for the purpose of improving the investment or
return of the Certificateholders or Certificate Owners.
Section 13.2 Duties of Trustee. The Trustee, both prior to and after
the occurrence of an Event of Servicing Termination, shall undertake to perform
such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Servicing Termination known to the Trustee shall have
occurred and shall not have been cured, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and shall use the same degree
of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs; provided,
however, that if the Trustee shall assume the duties of the Servicer pursuant to
Section 12.2, the Trustee in performing such duties shall use the degree of
skill and attention customarily exercised by a servicer with respect to
automobile and light-duty truck receivables that it services for itself.
The Trustee, upon receipt of any resolutions, certificates, statements,
opinions, reports, documents, orders, or other instruments furnished to the
Trustee that shall be specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of any such
resolution, certificate,
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statement, opinion, report, document, order or other instrument furnished by the
Servicer to the Trustee pursuant to this Agreement.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own bad faith or willful misfeasance; provided, however, that:
(i) Prior to the occurrence of an Event of Servicing
Termination, and after the curing of all such Events of Servicing
Termination that may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the performance
of such duties and obligations as shall be specifically set forth in
this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, the permissible right of the
Trustee to do things enumerated in this Agreement shall not be
construed as a duty and, in the absence of bad faith on the part of the
Trustee, or manifest error, the Trustee may conclusively rely upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement as to the truth of the statements made
and the correctness of the opinions expressed therein;
(ii) The Trustee shall not be personally liable for an error
of judgment made in good faith by an Authorized Officer of the Trustee,
unless it shall be proved that the Trustee shall have been negligent in
ascertaining the pertinent facts; and
(iii) The Trustee shall not be personally liable with respect
to any action taken, suffered, or omitted to be taken in good faith in
accordance with this Agreement or at the direction of the Holders of
Certificates evidencing not less than 25% of the Pool Balance relating
to the time, method, and place of conducting any proceeding or any
remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement.
The Trustee shall not be required to expend, advance or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there
shall be reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability shall not be reasonably
assured to it, and none of the provisions contained in this Agreement shall in
any event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer (including its
obligations as custodian) under this Agreement except during such time, if any,
as the Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Servicer in accordance with the terms of this
Agreement.
The Trustee shall not be charged with knowledge of an Event of
Servicing Termination until such time as an Authorized Officer shall have actual
knowledge or have received written notice thereof.
Except for actions expressly authorized by this Agreement or, based
upon an Opinion of Counsel, in the best interests of Certificateholders, the
Trustee shall take no action reasonably
54
likely to impair the security interests created or existing under any Receivable
or to impair the value of any Receivable.
All information obtained by the Trustee regarding the Obligors and the
Receivables, whether upon the exercise of its rights under this Agreement or
otherwise, shall be maintained by the Trustee in confidence and shall not be
disclosed to any other Person, other than internal counsel, unless such
disclosure is pursuant to the terms of this Agreement or required by any
applicable law or regulation.
In the event that the Paying Agent or the Transfer Agent and
Certificate Registrar shall fail to perform any obligation, duty or agreement in
the manner or on the day required to be performed by the Paying Agent or the
Transfer Agent and Certificate Registrar, as the case may be, under this
Agreement, the Trustee shall be obligated promptly upon an Authorized Officer
obtaining knowledge thereof to perform such obligation, duty or agreement in the
manner so required to the extent the information necessary to such performance
is reasonably available to the Trustee after the Trustee has made a reasonable
effort to obtain such information. The Trustee shall not be liable for the acts
or omissions of any Paying Agent, any Authenticating Agent or the Transfer Agent
and Certificate Registrar appointed hereunder with due care by the Trustee
hereunder.
Section 13.3 Trustee's Assignment of Repurchased Receivables and
Trustee's Certificate. With respect to any Receivable repurchased by the
Depositor pursuant to Section 5.2 or purchased by the Servicer pursuant to
Section 6.7 or 14.2, the Trustee shall (i) assign, without recourse,
representation, or warranty, to the Depositor or the Servicer, as the case may
be, all the Trust's right, title, and interest in and to such Receivable and the
other property conveyed to the Trust pursuant to Section 3.1 with respect to
such Receivable, and all security and documents relating thereto, such
assignment being an assignment outright and not for security and (ii) as soon as
practicable after a Receivable shall have been assigned to the Depositor or the
Servicer, as the case may be, execute a Trustee's Certificate, including the
date of execution of such Trustee's Certificate and the date of this Agreement,
and accompanied by a copy of the Servicer's Certificate specified for the
related Collection Period. If, in any enforcement suit or legal proceeding, it
shall be held that the Servicer may not enforce a Receivable on the ground that
it shall not be a real party in interest or a holder entitled to enforce the
Receivable, the Trustee shall, at the Servicer's expense, take such steps as the
Trustee or the Servicer deems necessary to enforce the Receivable, including
bringing suit in the Trustee's name or the names of the Trust or the
Certificateholders; provided, that nothing in this Section 13.3 shall require
the Trustee to qualify to do business in a state in which it is not so qualified
on the date of this Agreement.
Section 13.4 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 13.2:
(i) The Trustee may request, and may rely and shall be
protected in acting or refraining from acting upon, any resolution,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond, or other paper or document (including the annual
auditor's report and the letter of independent certified public
accountants described in Section 6.10, the Servicer's
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Certificate described in Section 6.8, and the annual compliance
statement described in Section 6.9) believed by it to be genuine and to
have been signed or presented by the proper party or parties.
(ii) The Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
under this Agreement in good faith and in accordance with such advice
or Opinion of Counsel, which counsel has been selected by the Trustee
with due care. A copy of any such Opinion of Counsel shall be provided
to the Depositor and the Servicer.
(iii) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or in
relation to this Agreement, at the request, order or direction of any
of the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses, and
liabilities that may be incurred therein or thereby; provided, however,
that the Trustee shall have the right to decline to follow any such
request, order or direction if the Trustee, in accordance with an
Opinion of Counsel determines that the action or proceeding may not
lawfully be taken or if the Trustee in good faith determines that the
action or proceeding so directed would involve it in personal liability
or be unjustly prejudicial to the non-assenting Certificateholders.
Nothing contained in this Agreement, however, shall relieve the Trustee
of the obligations, upon the occurrence of an Event of Servicing
Termination (that shall not have been cured), to exercise such of the
rights and powers vested in it by this Agreement, and to use the same
degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her
own affairs.
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement.
(v) Prior to the occurrence of an Event of Servicing
Termination and after the curing of all Events of Servicing Termination
that may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing not
less than 25% of the Pool Balance; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses,
or liabilities likely to be incurred by it in the making of such
investigation shall be, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against
such cost, expense, or liability or payment of such expenses as a
condition precedent to so proceeding. The reasonable expense of every
such examination
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shall be paid by the Servicer or, if paid by the Trustee, shall be
reimbursed by the Servicer upon demand. Nothing in this clause (v)
shall affect the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors.
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties under this Agreement either directly or
by or through agents or attorneys or a custodian, which agents or
attorneys shall have any or all of the rights, powers, duties and
obligations of the Trustee conferred on them by such appointment.
(vii) In the event that the Trustee is also acting as Paying
Agent, Collateral Agent, Authenticating Agent or Transfer Agent and
Registrar hereunder, the rights and protections afforded to the Trustee
pursuant to this Article XIII shall also be afforded to each Paying
Agent, Collateral Agent, Authenticating Agent or Transfer Agent and
Registrar.
Section 13.5 Trustee Not Liable for Certificates or Receivables. The
recitals contained in this Agreement and in the Certificates shall be taken as
the statements of the Depositor or the Servicer, as the case may be, and the
Trustee assumes no responsibility for the accuracy thereof. The Trustee shall
make no representations as to the validity or sufficiency of this Agreement or
of the Certificates (other than execution by the Trustee on behalf of the Trust
of, or the authentication on, the Certificates), or of any Receivable or related
document. The Trustee shall have no obligation to perform any of the duties of
the Depositor or Servicer unless explicitly set forth in this Agreement. The
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity, and enforceability of any security interest
in any Financed Vehicle or any Receivable, or the perfection and priority of
such a security interest or the maintenance of any such perfection and priority;
the filing of any financing or continuation statement in any public office; the
preparation or filing of any report or statement with the Securities and
Exchange Commission; the efficacy of the Trust or its ability to generate the
payments to be distributed to Certificateholders under this Agreement; the
existence, condition, location, and ownership of any Financed Vehicle; the
existence and enforceability of any comprehensive and collision insurance or
credit life or credit disability insurance; the existence and contents of any
Receivable or any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment; the
completeness of any Receivable; any claim or default asserted against a
Receivable; the performance or enforcement of any Receivable; the compliance by
the Depositor or the Servicer with any warranty or representation made under
this Agreement or in any related document and the accuracy of any such warranty
or representation (except after the Trustee's receipt of notice or other
discovery of any noncompliance therewith or any breach thereof or as otherwise
provided herein); the satisfaction of any condition relating to the Receivables;
any investment of funds by the Servicer or any loss resulting therefrom (it
being understood that the Trustee shall remain responsible for any Trust
property that it may hold); the acts or omissions of the Depositor, Servicer
(including in its capacity as custodian hereunder), or any Obligor; any action
of the Servicer taken in the name of the Trustee; or any action by the Trustee
taken at the instruction of the Servicer; provided, however, that the foregoing
shall not relieve the Trustee of its obligation
57
to perform its duties under this Agreement. Except with respect to a claim based
on the failure of the Trustee to perform its duties under this Agreement or
based on the Trustee's willful misconduct, negligence, or bad faith, or based on
the Trustee's breach of a representation and warranty specified in Section
13.14, no recourse shall be had for any claim or defense based on any provision
of this Agreement, the Certificates, or any Receivable or assignment thereof
against the Trustee in its individual capacity. The Trustee shall not have any
personal obligation, liability, or duty whatsoever to any Certificateholder or
any other Person with respect to any such claim or defense, and any such claim
or defense shall be asserted solely against the Trust or any indemnitor who
shall furnish indemnity as provided in this Agreement. The Trustee shall not be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Servicer in respect of the Receivables.
Section 13.6 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
and may deal with the Depositor and the Servicer in banking transactions with
the same rights as it would have if it were not Trustee.
Section 13.7 Trustee's Fees and Expenses. By execution and delivery of
this Agreement, the Servicer shall covenant and agree to pay to the Trustee, and
the Trustee shall be entitled to, an annual fee agreed upon in writing between
the Servicer and the Trustee payable in advance on the Closing Date and on each
one year anniversary thereof (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust) for all services
rendered by it in the execution of the trusts created by this Agreement and in
the exercise and performance of any of the powers and duties under this
Agreement of the Trustee, and the Servicer shall pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements, and advances
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) incurred or made by the
Trustee under this Agreement (including expenses, disbursements, and advances
incurred in defense of any action brought against it in connection with this
Agreement) except any such expense, disbursement, or advance as may arise from
its negligence, willful misfeasance, or bad faith or that is the responsibility
of Certificateholders under this Agreement. To the extent that the Trustee has
not been paid for any of the foregoing items by the Servicer, the Trustee shall
be entitled to be paid such amounts from amounts which are payable to the
Servicer pursuant to Section 7.5(b)(i) before payment to the Servicer of any
portion thereof; provided, however, that in the event that the Servicer shall
have elected to waive its rights to payment of the Servicing Fee or the
Servicing Fee is deferred, the Trustee shall nonetheless be entitled to receive
such amounts from payments which would ordinarily be applied to the payment of
the Servicing Fee, in the same order of priority as though such Servicing Fee
were payable. The Trustee shall be entitled to reimbursement by the Servicer for
any out-of-pocket costs or expenses (including, without limitation reasonable
fees and disbursements of one counsel to the Trustee) incurred in connection
with the review, negotiation, preparation, execution and delivery of this
Agreement or in connection with the issuance of any Certificate on the Closing
Date. The Servicer's obligation to pay such compensation and expenses shall
survive the termination of such Servicer to the extent that such obligation is a
result of services rendered prior to such Servicer's termination. Additionally,
the Servicer, pursuant to Section 13.8, shall indemnify the Trustee
58
with respect to certain matters, and Certificateholders, pursuant to Section
15.3, shall upon the circumstances therein set forth, indemnify the Trustee
under certain circumstances. The provisions of this Section 13.7 shall survive
the termination of this Agreement and the resignation or removal of the Trustee.
To the extent that the Trustee has not been paid by the Servicer for
any of the items described in the preceding paragraph for which the Servicer is
obligated, the Trustee shall be entitled to be paid for such items from amounts
which would otherwise be distributable to the Depositor under Section 7.5 of
this Agreement. The covenants and agreements contained in this Section 13.7
shall survive the termination of this Agreement and shall be binding, as
applicable, on the Servicer, and any successor Servicer and the Depositor.
Section 13.8 Indemnity. The Trustee, the Agents and their officers,
directors, agents and employees (each of the foregoing, an "Indemnified Person")
shall be indemnified by the Servicer and the Depositor and held harmless against
any loss, liability, or expense (including reasonable attorneys' fees and
expenses and expenses of litigation) arising out of or incurred in connection
with the acceptance or performance of the trusts and duties contained in this
Agreement to the extent that (i) such loss, liability, or expense shall not have
been incurred by reason of the Indemnified Person's willful misfeasance, bad
faith, or negligence, and (ii) such loss, liability, or expense shall not have
been incurred by reason of the Trustee's breach of its representations and
warranties pursuant to Section 13.14; provided, however, that the obligations of
the Servicer in this Section 13.8 shall survive such Servicer's termination with
respect to the performance of such Servicer prior to such Servicer's termination
and provided, further, that if the Servicer fails to indemnify the Indemnified
Person and their officers, directors, agents and employees pursuant to this
Section 13.8, then such indemnity shall be provided by the Trust, but any
amounts so payable to the Indemnified Person by the Trust pursuant to this
Section 13.8 shall be payable on a Payment Date only after all payments required
to be made on such date to the Certificateholders have been made, and, with
respect to a successor Servicer, if any, the Servicing Fee has been paid. The
provisions of this Section 13.8 shall survive the termination of this Agreement
and the resignation or removal of the Trustee.
Section 13.9 Eligibility Requirements for Trustee. The Trustee under
this Agreement shall at all times be a state banking corporation or national
banking association organized and doing business under the laws of such state or
the United States of America; authorized under such laws to exercise corporate
trust powers; and having a combined capital and surplus of at least $100,000,000
as of the last day of the most recent fiscal quarter for such institution and
subject to supervision or examination by federal or state authorities. If such
state banking corporation or national banking association shall publish reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 13.9, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The Trustee shall at all times be rated not
lower than Baa3 by Xxxxx'x or such other ratings as are acceptable to Xxxxx'x.
In case at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 13.9, the Trustee shall resign immediately in the
manner and with the effect specified in Section 13.10.
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Section 13.10 Resignation or Removal of Trustee. The Trustee may at any
time resign and be discharged from the trust hereby created by giving written
notice thereof to the Servicer. Upon giving such notice of resignation, the
Trustee shall promptly appoint a successor Trustee by written instrument which
instrument shall be delivered to the successor Trustee. If no successor Trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee. The
Servicer shall provide notice to the Rating Agencies of any resignation of the
Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 13.9 or shall be legally unable to act, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation, or liquidation, then the Trustee shall promptly resign. The
Trustee shall promptly appoint a successor Trustee by written instrument which
instrument shall be delivered to the successor Trustee. If the Trustee fails to
resign, the Certificateholders shall remove the Trustee and appoint a successor
Trustee by written instrument in duplicate, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 13.10 shall
not become effective until acceptance of appointment by the successor Trustee
pursuant to Section 13.11.
Section 13.11 Successor Trustee. Any successor Trustee appointed
pursuant to Section 13.10 shall execute, acknowledge, and deliver to the
Servicer and to its predecessor Trustee an instrument accepting such appointment
under this Agreement, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties, and obligations of its predecessor under this Agreement
with like effect as if originally named as Trustee. The predecessor Trustee
shall deliver to the successor Trustee all documents and statements held by it
under this Agreement, and the Servicer and the predecessor Trustee shall execute
and deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor Trustee
all such rights, powers, duties, and obligations.
No successor Trustee shall accept appointment as provided in this
Section 13.11 unless at the time of such acceptance such successor Trustee shall
be eligible pursuant to Section 13.9.
Upon acceptance of appointment by a successor Trustee pursuant to this
Section 13.11, the Servicer shall mail notice of the successor of such Trustee
under this Agreement to all Certificateholders at their respective addresses of
record, and to the Rating Agencies. If the Servicer shall fail to mail such
notice within 10 days after acceptance of appointment by successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Servicer.
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Section 13.12 Merger or Consolidation of Trustee. Any corporation or
other entity (i) into which the Trustee may be merged or consolidated, (ii)
which may result from any merger, conversion, or consolidation to which the
Trustee shall be a party, or (iii) which may succeed to all or substantially all
of the corporate trust business of the Trustee, which corporation or other
entity executes an agreement of assumption to perform every obligation of the
Trustee under this Agreement, shall be the successor of the Trustee hereunder,
provided such corporation or other entity shall be eligible pursuant to Section
13.9, without the execution or filing of any instrument or any further act on
the part of any of the parties hereto. The Trustee shall provide prompt written
notice of any merger or consolidation to the Depositor, the Servicer and the
Rating Agencies.
Section 13.13 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholders, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 13.13,
such powers, duties, obligations, rights, and trusts as the Servicer and the
Trustee may consider necessary or desirable. The Servicer will pay all
reasonable fees and expenses of any co-trustee or separate trustee or separate
trustees. The appointment of any separate trustee or co-trustee shall not
absolve the Trustee of its obligations under this Agreement. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in the case an Event of Servicing Termination shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee or separate trustees under
this Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 13.9 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee or separate trustees shall be
required pursuant to Section 13.11.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties, and obligations conferred or
imposed upon the Trustee shall be conferred upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such
act), except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (whether as
Trustee under this Agreement or as successor to the Servicer under this
Agreement), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties, and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee.
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(ii) No trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Agreement.
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or properties
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Each such instrument shall be filed with the Trustee and a copy thereof
given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Trustee,
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
Section 13.14 Representations and Warranties of Trustee. The Trustee
makes the following representations and warranties on which the Depositor, the
Servicer, and the Certificateholders may rely:
(i) Organization and Good Standing. The Trustee is a
_______________ duly organized, validly existing, and in good standing
under the laws of the State of _______________.
(ii) Power and Authority. The Trustee has full power,
authority and legal right to execute, deliver, and perform this
Agreement, and has taken all necessary action to authorize the
execution, delivery, and performance by it of this Agreement.
(iii) No Violation. The execution and delivery of this
Agreement and the performance by the Trustee of its obligations under
this Agreement do not (a) violate any provision of any law governing
the trust powers of the Trustee or, to the best of the Trustee's
knowledge, any order, writ, judgment, or decree of any court,
arbitrator, or governmental authority applicable to the Trustee or any
of its assets, (b) violate any provision of the articles of association
or by laws of the Trustee or (c) conflict with, result in any breach of
any of the terms or provisions of, or constitute (with or without
notice or lapse of time) a default under, any indenture, agreement or
other instrument to which the Trustee is a party or by which it is
bound to the extent such conflict, breach or default would impair the
Trustee's obligation or ability to perform under this Agreement.
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(iv) No Governmental Authorization Required. The execution,
delivery and performance by the Trustee of this Agreement do not
require the authorization, consent, or approval of, the giving of
notice to, the filing or registration with, or the taking of any other
action in respect of, any governmental authority or agency regulating
the corporate trust activities of the Trustee.
(v) Due Authorization, Execution and Delivery. This Agreement
has been duly authorized, executed and delivered by the Trustee and
shall constitute the legal, valid, and binding agreement of the
Trustee, enforceable in accordance with its terms except that (1) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally, and (2) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before
which any proceeding thereof may be brought.
Section 13.15 Tax Returns. The Servicer shall prepare or shall cause to
be prepared any tax returns required to be filed by the Trust and furnish to
Certificateholders any information required by the Code or the regulations
thereunder and shall remit such returns to the Trustee for signature at least
five days before such returns are due to be filed. The Trustee, upon request,
will furnish the Servicer with all such information known to the Trustee as may
be reasonably required in connection with the preparation of all tax returns of
the Trust, and shall, upon request, execute such returns.
Section 13.16 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
Section 13.17 Suits for Enforcement. In case an Event of Servicing
Termination or other default by the Servicer or the Depositor hereunder shall
occur and be continuing, the Trustee, in its discretion, may proceed to protect
and enforce its rights and the rights of the Certificateholders under this
Agreement by a suit, action or proceeding in equity or at law or otherwise
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Trustee or the Certificateholders.
Section 13.18 Maintenance of Office or Agency. The Trustee shall
maintain at its expense in New York, an office or offices or agency or agencies
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served. The Trustee initially designates the Corporate
Trust Office as its office for such purposes. The Trustee will
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give prompt written notice to the Servicer, the Paying Agent, the Transfer Agent
and Certificate Registrar, and to Certificateholders of any change in the
location of such office or agency.
ARTICLE XIV
Termination
Section 14.1 Termination of the Trust. The Trust, and the respective
obligations and responsibilities of the Depositor, the Servicer and the Trustee,
shall terminate with respect to the Certificateholders upon the first to occur
of (i) the Payment Date next succeeding the month which is six months after the
maturity or other liquidation of the last Receivable and the disposition of any
amounts received upon liquidation of any property remaining in the Trust and
(ii) the payment to Certificateholders of all amounts required to be paid to
them pursuant to this Agreement; provided, however, that in no event shall the
Trust created by this Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx Xxxxxxx Xxxxxx Xxxx,
the former President of the United States, living on the date of this Agreement.
The Servicer shall promptly (but in any event not later than the first day of
the month of the specified Payment Date) notify the Trustee, the Paying Agent,
the Transfer Agent and Certificate Registrar, and the Rating Agencies in writing
of any prospective termination pursuant to this Section 14.1.
Notice of any termination, specifying the Payment Date upon which the
Certificateholders may surrender their Certificates to the Transfer Agent and
Certificate Registrar for payment of the final distribution and cancellation,
shall be given promptly by the Trustee by letter to Certificateholders mailed
not earlier than the 15th day and not later than the 25th day of the month next
preceding the specified Payment Date stating the amount of any such final
payment, and that the Record Date otherwise applicable to such Payment Date is
not applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Transfer Agent and Certificate Registrar
therein specified. The Trustee shall give such notice to the Transfer Agent and
Certificate Registrar, the Paying Agent and the Rating Agencies at the time such
notice is given to Certificateholders. Upon presentation and surrender of the
Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Payment Date pursuant to
Section 7.5.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders upon receipt of the appropriate
records from the Transfer Agent and Certificate Registrar to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement.
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All Certificates surrendered for payment of the final distribution with
respect to such Certificates and cancellation shall be cancelled by the Transfer
Agent and Certificate Registrar and shall be disposed of in a manner
satisfactory to the Trustee and the Depositor.
Section 14.2 Optional Purchase of All Receivables. As of the last
Business Day in any Collection Period as of which the Pool Balance (expressed as
a percentage) of initial Pool Balance shall be equal to or less than the
Optional Purchase Percentage, the Servicer shall have the option to purchase the
corpus of the Trust; provided that the Servicer shall not exercise such option
to purchase if the purchase price, as specified below, is less than the amount
required in order to distribute to certificateholders in accordance with Section
7.5 the sum of the Class A Certificate Balance, the Class A Interest
Distributable Amount, the Class B Certificate Balance and the Class B Interest
Distributable Amount for the Distribution Date on which the purchase price is
applied to make such distributions. To exercise such option, the Servicer shall
notify the Trustee, the Paying Agent, and the Transfer Agent and Certificate
Registrar in writing, no later than the fifth calendar day of the month in which
such purchase is to be effected of its intention to effect such purchase. On the
Deposit Date in such month, the Servicer shall pay the lower of (i) the
aggregate Purchase Amount for the Receivables (including Defaulted Receivables)
and (ii) the fair market value of the Receivables and shall succeed to all
interests in and to the Trust property. The payment shall be made in the manner
specified in Section 7.4, and shall be distributed pursuant to Section 7.5. The
Trustee shall not permit the purchase of the corpus of the Trust pursuant to
this Section unless either (i) the Servicer's long-term unsecured debt is rated
at the time of such purchase at least Baa3 by Moody's 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 Moody's to the effect that
such purchase will not constitute a fraudulent transfer of assets of the
Servicer under applicable state and federal law.
ARTICLE XV
Miscellaneous Provisions
Section 15.1 Amendment. This Agreement may be amended by the Depositor,
the Servicer and the Trustee, without prior notice to or the consent of any of
the Certificateholders, (i) to cure any ambiguity, to correct or supplement any
provision in this Agreement which may be inconsistent with any other provision
herein, to evidence a succession to the Servicer or the Depositor pursuant to
this Agreement or to add any other provisions with respect to matters or
questions arising under this Agreement that shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action shall not, as
evidenced by an Officer's Certificate and/or an Opinion of Counsel delivered to
the Trustee, adversely and materially affect the interests of the Trust or any
of the Certificateholders and provided, further, that the Servicer shall deliver
written notice of such changes to each Rating Agency prior to the execution of
any such amendment and the Rating Agency Condition shall be satisfied, or (ii)
to effect a transfer or assignment in compliance with Section 15.7(i) of this
Agreement.
This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing not less than 51% of
65
the Pool Balance, for the purpose of adding any provision to or changing in any
manner or eliminating any of the provisions of this Agreement, or of modifying
in any manner the rights of the Certificateholders (including effecting a
transfer or assignment in compliance with Section 15.7(ii) of this Agreement);
provided, however, that no such amendment, except with the consent of the
Holders of all Certificates then outstanding, shall (a) increase or reduce in
any manner the amount of, or accelerate or delay the timing of, or change the
allocation or priority of collections of payments of Receivables, or
distributions that shall be required to be made on any Certificate, (b) reduce
the aforesaid percentage of the Pool Balance required to consent to any such
amendment or (c) reduce in any way the shortfalls for which the Trustee may draw
under the Reserve Account pursuant to Article VII hereof. Notwithstanding
anything herein to the contrary, the Specified Reserve Account Balance may be
reduced to a lesser amount as determined by the Depositor upon satisfaction of
the Rating Agency Condition.
Promptly after the execution of any amendment or consent referred to in
this Section 15.1, the Trustee shall furnish a copy of such amendment or consent
to each Certificateholder and to the Rating Agencies.
It shall not be necessary for the consent of Certificateholders
pursuant to this Section 15.1 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement.
The Trustee shall not be obligated to enter into any such amendment which
affects the Trustee's own rights, duties or immunities under this Agreement.
Prior to the execution of any amendment to this Agreement, other than
an amendment permitted pursuant to clause (i) of the first paragraph of this
Section 15.1, the Servicer shall have received written notice from each of the
Rating Agencies that its rating of the Certificates will not be reduced or
withdrawn as a result of such amendment.
Section 15.2 Protection of Title to Trust.
(a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain, and
protect the interests of the Trustee under this Agreement in the Receivables and
in the proceeds thereof. The Servicer shall deliver (or cause to be delivered)
to the Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Neither the Depositor nor the Servicer shall change its name,
identity, or corporate structure in any manner that would make any financing
statement or continuation statement filed by the Servicer in accordance with
paragraph (a) above seriously misleading within the meaning
66
of Section 9-402(7) of the UCC (or any successor provision to such Section),
unless it shall have given the Trustee at least 10 days prior written notice
thereof.
(c) The Depositor and the Servicer shall give the Trustee at least 10
days prior written notice of any relocation of its principal executive office
if, as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement. The Servicer shall at
all times maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Trustee,
the Servicer's master computer records (including archives) that shall refer to
a Receivable indicate clearly, by numerical code or otherwise, that such
Receivable is owned by the Trust. Indication of the Trust's ownership of a
Receivable shall be deleted from or modified on the Servicer's computer systems
when, and only when, the Receivable shall have been paid in full, repurchased,
purchased or assigned pursuant hereto.
(f) If at any time the Depositor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in a new or
used automobile or light-duty truck to any prospective purchaser, creditor, or
other transferee, the Depositor or the Servicer, as the case may be, shall give
to such prospective purchaser, creditor, or other transferee computer tapes,
records, or print-outs (including any restored from archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate clearly
that such Receivable has been sold and is owned by the Trust.
(g) The Servicer shall permit the Trustee and its agents upon
reasonable notice at any time during normal business hours which does not
unreasonably interfere with the Servicer's normal operations to inspect, audit,
and make copies of and abstracts from the Servicer's records regarding the
Receivables.
(h) Upon request, the Servicer shall furnish to the Trustee, within
five Business Days of any request therefor, a list of all Receivables by
contract number and name of Obligor then held as part of the Trust, together
with a reconciliation of such list to the Schedule of Receivables attached as
Schedule A to this Agreement and to each of the Servicer Certificates indicating
removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Trustee:
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(1) upon the execution and delivery of this
Agreement, an Opinion of Counsel either (a) stating that, in
the opinion of such counsel and subject to customary
qualifications and assumptions, all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the
Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which
such details are given, or (b) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve
and protect such interest; and
(2) on March 31 of each year, commencing with March
31, _____, an Opinion of Counsel, dated as of such date,
either (a) stating that, in the opinion of such counsel and
subject to customary qualifications and assumptions, all
financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and
protect the interest of the Trustee in the Receivables, and
reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (b)
stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interest.
(j) For the purpose of facilitating the execution of this Agreement and
for other purposes, this Agreement may be executed simultaneously in any number
of counterparts, each of which counterparts shall be deemed to be an original,
and all of which counterparts shall constitute but one and the same instrument.
Section 15.3 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle the Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations, and liabilities of the parties to
this Agreement or any of them.
No Certificateholder shall have any right to vote (except as provided
in Section 12.1, Section 12.4, Section 15.1 and this Section 15.3) or in any
manner otherwise control the operation and management of the Trust, or the
obligations of the parties to this Agreement, nor shall anything set forth in
this Agreement or contained in the terms of the Certificates, be construed so as
to constitute the Holders as partners or members of an association; nor shall
any Certificateholder be under any liability to any third person by reason of
any action taken pursuant to any provision of this Agreement.
No Certificateholder shall have any right by virtue or by availing
itself of any provision of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or with respect to a default under this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof and unless also the
Holders of Certificates evidencing not less than 25% of the Pool Balance shall
have made written request upon the Trustee to institute such action, suit, or
proceeding in its own name as Trustee under this Agreement and shall have
offered to the Trustee such reasonable indemnity as it may require
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against the costs, expenses, and liabilities to be incurred therein or thereby,
and the Trustee, for 30 days after its receipt of such notice, request, and
offer of indemnity, shall have either neglected or refused to institute any such
action, suit or proceeding. No one or more Holders of Certificates shall have
any right in any manner whatever by virtue or by availing itself or themselves
of any provisions of this Agreement to affect, disturb, or prejudice the rights
of the Holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right,
under this Agreement, except in the manner provided in this Agreement and for
the equal, ratable, and common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 15.3, each
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 15.4 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS,
AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 15.5 Notices. All demands, notices, and communications under
this Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested, or sent by telecopy or other similar form of
rapid transmission and shall be deemed to have been duly given upon receipt (a)
in the case of the Depositor, USAA Acceptance, LLC, 0000 Xxxxxxxxx Xxxx., Xxxxx
000, Xxx Xxxxxxx, Xxxxx 00000, Attention: [ ], Telecopy Number (000) 000-0000,
or at such other address as shall be designated by the Depositor in a written
notice to the Trustee, (b) in the case of the Seller, at USAA Federal Savings
Bank, 00000 XxXxxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxx 00000 Attention: Vice
President and Banking Counsel, Telecopy Number: (000) 000-0000, or at such other
address as shall be designated by the Seller in a written notice to the Trustee,
(c) in the case of the Servicer, at USAA Federal Savings Bank, 00000 XxXxxxxxx
Xxxxxxx, Xxx Xxxxxxx, Xxxxx 00000, Attention: Vice President and Banking
Counsel, Telecopy Number: (000) 000-0000, or at such other address as shall be
designated by the Servicer in a written notice to the Trustee, and (d) in the
case of the Trustee and the Collateral Agent, at _____________________________,
Attention: _______________, Telecopy Number: _______________ or at such other
address as shall be designated in a written notice to the Trustee. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of record of such Holder. Any
notice to a Certificateholder so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder shall receive such notice.
Section 15.6 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
69
Section 15.7 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 10.3 and 11.3, neither the
Depositor nor the Servicer may transfer or assign all, or a portion of, its
rights, obligations and duties under this Agreement unless such transfer or
assignment (i) (A) will not result in a reduction or withdrawal by Standard &
Poor's or Moody's of its rating then assigned to the Certificates and (B) the
Trustee has consented to such transfer or assignment, which consent shall not be
unreasonably withheld or (ii) the Trustee and Holders of Certificates evidencing
not less than 51% of the Pool Balance consent thereto. Any transfer or
assignment with respect to the Servicer of all of its rights, obligations and
duties will not become effective until a successor Service has assumed the
Servicer's rights, duties and obligations under this Agreement. In the event of
a transfer or assignment pursuant to clause (ii) above, the Rating Agencies
shall be provided with notice of such transfer or assignment.
Section 15.8 Certificates Nonassessable and Fully Paid. The interests
represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever, and, upon authentication
thereof by the Trustee pursuant to Section 9.2, each Certificate shall be deemed
fully paid.
Section 15.9 Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Certificateholders
and their respective successors and permitted assigns. Except as otherwise
provided in this Agreement, no other person will have any right or obligation
hereunder.
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IN WITNESS WHEREOF, the parties have caused this Pooling and Servicing
Agreement to be duly executed by their respective officers as of the day and
year first above written.
USAA ACCEPTANCE, LLC,
as Depositor
By:__________________________________
Name: _______________
Title: _______________
USAA FEDERAL SAVINGS BANK,
as Seller and Servicer
By:__________________________________
Name: _______________
Title: _______________
_____________________________________,
as Trustee
By:__________________________________
Name: _______________
Title: _______________
SCHEDULE A
Schedule A shall be the computer data disk or printout relating to the
Receivables delivered by the Depositor to the Trustee on the Closing Date.
Sch-A-1
SCHEDULE B
Location of Receivable Files
USAA Federal Savings Bank
00000 XxXxxxxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000
Sch-B-1
EXHIBIT A
FORM OF CLASS A CERTIFICATE
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
USAA AUTO GRANTOR TRUST ______
___% ASSET BACKED CERTIFICATE, CLASS A
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of motor vehicle
installment loans, secured by new and used automobiles and light-duty
trucks financed thereby and sold to the Trustee, as defined below, on
behalf of the Trust by USAA Acceptance, LLC.
(This Certificate is not a deposit account, does not represent an
interest in or obligation of USAA Acceptance, LLC, USAA Federal Savings
Bank or any of its affiliates and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other person or
governmental authority.)
NUMBER CUSIP ______
R- [ ]
$[ ]
Final Payment Date:
__________, ______
THIS CERTIFIES THAT __________. is the registered owner of a
nonassessable, fully paid, fractional undivided interest, in the amount set
forth above, in the USAA Auto Grantor Trust ______ (the "Trust") formed by USAA
Acceptance, LLC, a limited liability company (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of ___________
__, ______ (the "Agreement") among the Depositor, the USAA Federal Savings Bank,
a federally chartered savings association (the "Seller"), acting as Seller and
Servicer, and _________________, as trustee (the trustee and any successor in
interest under the Agreement,
Ex A-1
the "Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. This Class A Certificate is one of the duly authorized Certificates
designated as "_____% Asset Backed Certificates, Class A" (herein called the
"Class A Certificates" or the "Certificates"). This Class A Certificate is
issued under and is subject to the terms, provisions, and conditions of the
Agreement, to which Agreement the Holder of this Class A Certificate by virtue
of its acceptance hereof assents and by which such Holder is bound. The property
of the Trust includes a pool of motor vehicle installment loans (the
"Receivables") for the purchase of new and used automobiles and light-duty
trucks financed thereby, all monies due thereunder on or after the Cut-off Date,
security interests in the vehicles securing the Receivables (the "Financed
Vehicles"); such amounts as from time to time may be held in the Collection
Account established and maintained by the Servicer in the name of the Trustee;
benefits under the Reserve Account (described below); an assignment of the
rights of the Depositor to receive proceeds from any claims on comprehensive and
collision, credit life and credit disability insurance policies covering the
Financed Vehicles or the Obligors, as the case may be, to the extent that such
insurance policies relate to the Receivables; and the rights with respect to any
Financed Vehicle that has been repossessed by the Servicer, on behalf of the
Trustee.
Under the Agreement, there will be distributed on the ___th day of each
month or, if such __th day is not a Business Day, the next succeeding Business
Day (a "Payment Date"), commencing on ____________ __, ______, to the Person in
whose name this Class A Certificate is registered at the close of business on
the Record Date, such Certificateholder's fractional undivided interest in the
aggregate amounts allocable to interest and principal that are distributable to
the Class A Certificateholders on such Payment Date, all as more fully described
in the Agreement.
Distributions on this Class A Certificate will be made by the Paying
Agent by check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon, except that if directed by the Depositor in the case of
Certificates registered in the name of a Clearing Agency, distributions will be
made in the form of immediately available funds. Except as otherwise provided in
the Agreement and notwithstanding the above, the final distribution on this
Class A Certificate will be made after due notice by the Trustee of the pendency
of such distribution and only upon presentation and surrender of this Class A
Certificate at the office or agency maintained for that purpose by the Transfer
Agent and Certificate Registrar in New York, New York.
Reference is hereby made to the further provisions of this Class A
Certificate set forth below, which further provisions shall for all purposes
have the same effect as if set forth at this place.
All capitalized terms used herein and not otherwise defined shall have
the meaning assigned thereto in the Agreement.
Unless the authentication hereon shall have been executed by an
authorized officer of the Trustee or an authenticating agent acting on behalf of
the Trustee, by manual signature, this Class A Certificate shall not entitle the
holder hereof to any benefit under the Agreement or be valid for any purpose.
Ex A-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in its
individual capacity, has caused this Class A Certificate to be duly executed.
USAA AUTO GRANTOR TRUST ______
_________________, as Trustee
By:_______________________________________
Authorized Signatory
Dated: __________ __, ______
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
_________________,
as Trustee
By:_______________________________________
Authorized Signatory
Ex A-3
USAA AUTO GRANTOR TRUST ______
____% ASSET BACKED CERTIFICATES
The Class A Certificates do not represent an obligation of, or an
interest in, the Depositor, the Seller, the Servicer, the Trustee or any
affiliate of any of them. The Certificates are limited in right of payment to
certain collections and recoveries in respect of the Receivables, all as more
specifically set forth in the Agreement. The Trust will have the benefit of a
Reserve Account. On the Business Day preceding each Payment Date (the "Deposit
Date"), the Trustee, or the Servicer on behalf of the Trustee, shall make a
withdrawal from the Reserve Account in the amount required by the Agreement, but
in no event in an amount greater than the Available Reserve Amount with respect
to such Payment Date.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Seller, the Servicer and
the Trustee with the consent of the Holders of Certificates evidencing not less
than 51% of the Pool Balance. Any such consent by the Holder of this Class A
Certificate shall be conclusive and binding on such Holder and on all future
Holders of this Class A Certificate and of any Certificate issued upon
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent is made upon this Class A Certificate. The
Agreement also permits the amendment thereof, in certain limited circumstances
and with certain exceptions provided therein, without prior notice to or the
consent of the Holders of any of the Class A Certificates. A copy of the
Agreement may be examined during normal business hours at the Corporate Trust
Office of the Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Class A Certificate is registrable in the
Certificate Register upon surrender of this Class A Certificate for registration
of transfer at the office or agency maintained by the Transfer Agent and
Certificate Registrar, in New York, New York, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Transfer
Agent and Certificate Registrar duly executed by the Holder hereof, which
signature to such assignment has been guaranteed by a member of the New York
Stock Exchange or a commercial bank or trust company, and thereupon one or more
new Class A Certificates of authorized denominations evidencing the same
aggregate interest in the Trust will be issued to the designated transferee.
The Class A Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof. As
provided in the Agreement and subject to certain limitations therein set forth,
Class A Certificates are exchangeable for new Certificates of authorized
denominations evidencing the same aggregate denomination, as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Transfer Agent and Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge payable in connection therewith.
Ex A-4
In the event that the Holder of this Class A Certificate does not
surrender this Class A Certificate for cancellation within six months after the
date specified in the notice regarding the pendency of the final distribution
described herein, the Trustee shall give a second notice with respect thereto.
If within one year after such second notice this Class A Certificate shall not
have been surrendered for cancellation, the Trustee may take appropriate steps
to contact the Holder hereof. As provided in the Agreement, any funds remaining
in the Trust after exhaustion of such steps shall be distributed to the
Depositor, such distribution to occur not later than three years from the date
of the final Payment Date.
The Trustee, the Paying Agent and the Transfer Agent and Certificate
Registrar may treat the Person in whose name this Class A Certificate is
registered as the owner hereof for all purposes, and none of the Trustee, the
Paying Agent or the Transfer Agent and Certificate Registrar shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby with respect to the Certificateholders shall terminate
upon the payment to Certificateholders of all amounts required to be paid to
them pursuant to the Agreement on the Payment Date next succeeding the month
which is six months after the maturity or liquidation of the last Receivable and
the disposition of all property held as part of the Trust. The Servicer may, at
its option, purchase the corpus of the Trust at a price specified in the
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Class A Certificates; provided, however,
that such right of purchase is exercisable only as of the last day of a month
immediately preceding any Payment Date as of which the Pool Balance is equal to
or less than [ ]% of the Original Pool Balance.
Ex A-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE _________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address,
including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ______________________________ Attorney to transfer
said Certificate on the books of the Transfer Agent and Certificate Registrar,
with full power of substitution in the premises.
Dated:
______________________________________*
Signature Guaranteed:
______________________________________*
*NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Certificate in every
particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by a member of the
New York Stock Exchange or a commercial bank or trust company.
Ex A-6
EXHIBIT B
FORM OF CLASS B CERTIFICATE
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
USAA AUTO GRANTOR TRUST ______
___% ASSET BACKED CERTIFICATE, CLASS B
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of simple interest motor
vehicle installment loans, secured by new and used automobiles and
light-duty trucks financed thereby and sold to the Trustee, as defined
below, on behalf of the Trust by USAA Acceptance, LLC.
(This Certificate is not a deposit account, does not represent an
interest in or obligation of USAA Acceptance, LLC or any of its
respective affiliates and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other person or governmental
authority.)
NUMBER CUSIP _______
R-[ ]
$[ ]
Final Payment Date:
_____________ __, 20__
THIS CERTIFIES THAT __________ is the registered owner of a
nonassessable, fully paid, fractional undivided interest, in the amount set
forth above, in the USAA Auto Grantor Trust ______ (the "Trust") formed by USAA
Acceptance, LLC, a limited liability company (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of __ __, ______
(the "Agreement") among the Depositor, USAA Federal Savings Bank, a federally
chartered savings association (the "Seller"), acting as Depositor and Servicer,
and _________________, as trustee (the trustee and any successor in interest
under the Agreement, the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth below. This
Ex B-1
Class B Certificate is one of the duly authorized Certificates designated as
"___% Asset Backed Certificates, Class B" (herein called the "Class B
Certificates" or the "Certificates"). This Class B Certificate is issued under
and is subject to the terms, provisions, and conditions of the Agreement, to
which Agreement the Holder of this Class B Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound. The property of the
Trust includes a pool of motor vehicle installment loans (the "Receivables") for
the purchase of new and used automobiles and light-duty trucks financed thereby,
all monies due thereunder on or after the Cut-off Date, security interests in
the vehicles securing the Receivables (the "Financed Vehicles"); such amounts as
from time to time may be held in the Collection Account established and
maintained by the Servicer in the name of the Trustee; benefits under the
Reserve Account (described below); an assignment of the rights of the Depositor
to receive proceeds from any claims on comprehensive and collision, credit life
and credit disability insurance policies covering the Financed Vehicles or the
Obligors, as the case may be, to the extent that such insurance policies relate
to the Receivables; and the rights with respect to any Financed Vehicle that has
been repossessed by the Servicer, on behalf of the Trustee.
Under the Agreement, there will be distributed on the ___th day of each
month or, if such ___th day is not a Business Day, the next succeeding Business
Day (each, a "Payment Date"), commencing on ____________ __, ______, to the
Person in whose name this Class B Certificate is registered at the close of
business on the Record Date, such Certificateholder's fractional undivided
interest in the aggregate amounts allocable to interest principal that are
distributable to the Class B Certificateholders on such Payment Date, all as
more fully described in the Agreement.
Distributions on this Class B Certificate will be made by the Paying
Agent by check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Class B Certificate or
the making of any notation hereon, except that if directed by the Depositor in
the case of Certificates registered in the name of a Clearing Agency,
distributions will be made in the form of immediately available funds. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Class B Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Class B Certificate at the office or agency maintained for
that purpose by the Transfer Agent and Certificate Registrar in New York, New
York.
Reference is hereby made to the further provisions of this Class B
Certificate set forth below, which further provisions shall for all purposes
have the same effect as if set forth at this place.
All capitalized terms used herein and not otherwise defined shall have
the meaning assigned thereto in the Agreement.
Unless the authentication hereon shall have been executed by an authorized
officer of the Trustee or an authenticating agent acting on behalf of the
Trustee, by manual signature, this Class B Certificate shall not entitle the
holder hereof to any benefit under the Agreement or be valid for any purpose.
Ex B-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in its
individual capacity, has caused this Class B Certificate to be duly executed.
USAA AUTO GRANTOR TRUST ______
__________________________,
as Trustee
By:________________________________________
Dated: __ __, ______
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
__________________________,
as Trustee
By:________________________________________
Authorized Signatory
Ex B-3
USAA AUTO GRANTOR TRUST ______
___% ASSET BACKED CERTIFICATES
The Class B Certificates do not represent an obligation of, or an
interest in, the Depositor, the Seller, the Servicer, the Trustee or any
affiliate of any of them. The Certificates are limited in right of payment to
certain collections and recoveries in respect of the Receivables, all as more
specifically set forth in the Agreement. The Trust will have the benefit of a
Reserve Account. On the Business Day preceding each Payment Date (the "Deposit
Date"), the Trustee, or the Servicer on behalf of the Trustee, shall make a
withdrawal from the Reserve Account in the amount required by the Agreement, but
in no event in an amount greater than the Available Reserve Amount with respect
to such Payment Date.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Seller, the Servicer and
the Trustee with the consent of the Holders of Certificates evidencing not less
than 51% of the Pool Balance. Any such consent by the Holder of this Class B
Certificate shall be conclusive and binding on such Holder and on all future
Holders of this Class B Certificate and of any Certificate issued upon
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent is made upon this Class B Certificate. The
Agreement also permits the amendment thereof, in certain limited circumstances
and with certain exceptions provided therein, without prior notice to or the
consent of the Holders of any of the Class B Certificates. A copy of the
Agreement may be examined during normal business hours at the Corporate Trust
Office of the Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Class B Certificate is registrable in the
Certificate Register upon surrender of this Class B Certificate for registration
of transfer at the office or agency maintained by the Transfer Agent and
Certificate Registrar, in New York, New York, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Transfer
Agent and Certificate Registrar duly executed by the Holder hereof, which
signature to such assignment has been guaranteed by a member of the New York
Stock Exchange or a commercial bank or trust company, and thereupon one or more
new Class B Certificates of authorized denominations evidencing the same
aggregate interest in the Trust will be issued to the designated transferee.
The Class B Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof
(except for a single Certificate in a smaller minimum denomination representing
any residual portion of the Pool Balance on the Cut-off Date). As provided in
the Agreement and subject to certain limitations therein set forth, Class B
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same aggregate denomination, as requested by the Holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Transfer Agent and Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
Ex B-4
In the event that the Holder of this Class B Certificate does not
surrender this Class B Certificate for cancellation within six months after the
date specified in the notice regarding the pendency of the final distribution
described herein, the Trustee shall give a second notice with respect thereto.
If within one year after such second notice this Class B Certificate shall not
have been surrendered for cancellation, the Trustee may take appropriate steps
to contact the Holder hereof. As provided in the Agreement, any funds remaining
in the Trust after exhaustion of such steps shall be distributed to the
Depositor, such distribution to occur not later than three years from the date
of the final Payment Date.
The Trustee, the Paying Agent and the Transfer Agent and Certificate
Registrar may treat the Person in whose name this Class B Certificate is
registered as the owner hereof for all purposes, and none of the Trustee, the
Paying Agent or the Transfer Agent and Certificate Registrar shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby with respect to the Certificateholders shall terminate
upon the payment to Certificateholders of all amounts required to be paid to
them pursuant to the Agreement on the Payment Date next succeeding the month
which is six months after the maturity or liquidation of the last Receivable and
the disposition of all property held as part of the Trust. The Servicer may, at
its option, purchase the corpus of the Trust at a price specified in the
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Class B Certificates; provided, however,
that such right of purchase is exercisable only as of the last day of a month
immediately preceding any Payment Date as of which the Pool Balance is equal to
or less than [ ]% of the Original Pool Balance.
Ex B-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE _________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address,
including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ____________________________ Attorney to transfer
said Certificate on the books of the Transfer Agent and Certificate Registrar,
with full power of substitution in the premises.
Dated:
______________________________________*
Signature Guaranteed:
______________________________________*
*NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Certificate in every
particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by a member of the
New York Stock Exchange or a commercial bank or trust company.
Ex B-6
EXHIBIT C-1
Trustee's Certificate
pursuant to Section 13.3
of the Pooling and Servicing Agreement
_____________________________________________(the "Trustee") of the
USAA Auto Grantor Trust ______ created pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of ___________ __,
______, among USAA Acceptance, LLC (the "Depositor"), USAA Federal Savings Bank,
as Seller (the "Seller") and Servicer, and the Trustee, does hereby sell,
transfer, assign, and otherwise convey to the Depositor, without recourse,
representation, or warranty, all of the Trustee's right, title, and interest in
and to all of the Receivables (as defined in the Pooling and Servicing
Agreement) identified in the attached Servicer's Certificate as "Repurchased
Receivables," which are to be repurchased by the Depositor pursuant to Section
5.2 of the Pooling and Servicing Agreement and all security and documents
relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
__________, 20__.
_________________________________________
Ex C-1-1
EXHIBIT C-2
Trustee's Certificate
pursuant to Section 13.3
of the Pooling and Servicing Agreement
_____________________________________ (the "Trustee") of the USAA
Federal Savings Grantor Trust ______ created pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
__________ __, ______ among USAA Acceptance, LLC (the "Depositor"), USAA Federal
Savings Bank, as Seller and Servicer (the "Servicer"), and the Trustee, does
hereby sell, transfer, assign, and otherwise convey to the Servicer, without
recourse, representation, or warranty, all of the Trustee's right, title, and
interest in and to all of the Receivables (as defined in the Pooling and
Servicing Agreement) identified in the attached Servicer's Certificate as
"Repurchased Receivables," which are to be purchased by the Servicer pursuant to
Section 6.6 or 14.2 of the Pooling and Servicing Agreement, and all security and
documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this day ___ of
____________, 20__.
________________________________________
Ex C-2-1
EXHIBIT D
USAA Auto Grantor Trust ______
___% Asset Backed Certificates, Class A
____% Asset Backed Certificates, Class B
SERVICER'S REPORT
Ex D-1
EXHIBIT E
FORM OF CERTIFICATEHOLDER REPORT
USAA Auto Grantor Trust ______
___% Asset Backed Certificates, Class A
___% Asset Backed Certificates, Class B
On ________, ____, interest earned and principal paid on the underlying assets
for the month of ____________, ____ were paid to you in connection with the
above referenced issue. The following information is being provided pursuant to
Section 7.8 of the Pooling and Servicing Agreement, dated as of __ __, ______.
This payment per $1000 of original issuance of your holdings is allocated as
follows:
1) Principal ________
2) Interest ________
Total per each individual certificate ________
3) Yield Supplement Amount ________
4) Fees and compensation paid to Servicer ________
(a) Total ________
(b) Per individual certificate ________
5) The amount deposited into the
Reserve Account ________
6) Aggregate Unreimbursed Advances in
prior month ________
Change From prior month ________
This month ________
7) (a) Pool Balance before this payment ________
(b) Pool Factor before this payment ________
(c) Pool Factor after this payment ________
8) (a) Available Reserve Amount ________
Ex E-1
(b) % of Pool Balance ________
9) Specified Reserve Account Balance ________
10) Aggregate Realized Losses in prior month ________
Ex E-2
EXHIBIT F
FORM OF YIELD SUPPLEMENT AGREEMENT
USAA Auto Grantor Trust ______
c/o _________________, as Trustee
and as Collateral Agent
_____________________________
_____________, ______
Ladies and Gentlemen:
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, we (the "Depositor") hereby confirm arrangements
made as of the date hereof with you (the "Trust") to be effective upon receipt
by the Depositor of the enclosed copy of this letter agreement (as amended,
supplemented or otherwise modified and in effect from time to time, the "Yield
Supplement Agreement").
1. On or prior to the Determination Date preceding each Payment Date,
the Servicer shall notify the Trust and the Depositor of the Yield Supplement
Amount for such Payment Date.
2. The Depositor agrees to establish a Yield Supplement Account
pursuant to Article VIII of the Pooling and Servicing Agreement, dated as of
_____, ______ (as amended, supplemented or otherwise modified and in effect from
time to time, the "Pooling and Servicing Agreement") by and among the Depositor,
in its individual capacity and as a Servicer thereunder (the "Servicer") and
_________________, as trustee thereunder (the "Trustee"), and the Depositor
hereby agrees, to make a payment of the Yield Supplement Amount to the Trustee
on behalf of the Trust, or to any assignee of the Trustee on behalf of the Trust
referred to in Section 8.1 hereof, prior to 11:00 A.M. on each Payment Date. If
and to the extent that such amounts shall not have been paid by the Depositor in
full at or prior to 11:00 A.M. (New York time), then, in such event, pursuant to
Section 8.2(g) of the Pooling and Servicing Agreement, the Trustee shall
instruct the Collateral Agent to withdraw the amount of any such insufficiency
from the Yield Supplement Account and deposit such funds to the Collection
Account.
3. All payments pursuant hereto shall be made by federal wire transfer
(same day) funds or in immediately available funds, to such account as the
Trustee on behalf of the Trust, may designate in writing to the Depositor prior
to the relevant Payment Date.
4. Our agreements set forth in this Yield Supplement Agreement are our
primary obligations and such obligations are irrevocable, absolute and
unconditional, shall not be subject to any counterclaim, setoff or defense
(other than full and strict compliance by us with our obligations hereunder) and
shall remain in full force and effect without regard to, and shall not be
released, discharged or in any way affected by, any circumstances or condition
whatsoever.
Ex F-1
5. This Yield Supplement Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
6. Except as otherwise provided herein, all demands, notices and
communications under this Yield Supplement Agreement shall be in writing,
personally delivered, sent by telecopier, sent by courier or mailed by certified
mail, return receipt requested, and shall be deemed to have been duly given upon
receipt by the Purchaser or the Depositor. All notices shall be directed as set
forth below, or to such other address or to the attention of such other person
as the relevant party shall have designated for such purpose in a written
notice.
The Trust:
USAA Auto Grantor Trust ______
c/o _________________,
as Trustee
_________________________________________
_________________________________________
Attention: Corporate Trust Department
Telecopy: ( )
The Depositor:
USAA Acceptance, LLC
00000 XxXxxxxxx Xxxxxxx__________________
Xxx Xxxxxxx, XX 00000 ___________________
Attention:
Telecopy: ( )
7. This Yield Supplement Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, all
of which shall be deemed to be one and the same document.
8. Capitalized terms used herein but not otherwise defined shall have
the meanings assigned thereto in the Pooling and Servicing Agreement.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
Ex F-2
If the foregoing satisfactorily sets forth the terms and conditions of
our agreement, please indicate your acceptance thereof by signing in the space
provided below and returning to us the enclosed duplicate original of this
letter.
Very truly yours,
USAA ACCEPTANCE, LLC
By:______________________________________
Name:
Title:
Agreed and accepted as of
the date first above written:
_________________, as
Trustee and as Collateral Agent
By:___________________________________
Authorized Signatory
Ex F-3
