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FORM OF POOLING AND SERVICING
AGREEMENT
between
BANC ONE ABS CORPORATION,
as Seller
BANK ONE, ARIZONA, NA,
as Servicer
and
BANKERS TRUST COMPANY,
as Trustee,
On behalf of the Certificateholders,
and as Collateral Agent
Dated as of June 1, 1996
Banc One Auto Grantor Trust 1996-B
$______________ Class A ____% Asset Backed Certificates
$_____________ Class B ____% Asset Backed Certificates
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ARTICLE I
Definitions
SECTION 1.1. Definitions.. . . . . . . . . . . . . . . . 1
SECTION 1.2. Usage of Terms. . . . . . . . . . . . . . . 19
SECTION 1.3. Calculations. . . . . . . . . . . . . . . . 20
SECTION 1.4. References. . . . . . . . . . . . . . . . . 20
SECTION 1.5. References to the Trust. . . . . . . . . . 20
SECTION 1.6. Action by or Consent of
Certificateholders.. . . . . . . . . . . . 20
ARTICLE II
The Trust Property
SECTION 2.1. Conveyance of Trust Property. . . . . . . . 20
SECTION 2.2. Representations and Warranties as to Each
Receivable.. . . . . . . . . . . . . . . . 20
SECTION 2.3. Repurchase upon Breach. . . . . . . . . . . 24
SECTION 2.4. Custody of Receivable Files.. . . . . . . . 25
SECTION 2.5. Duties of Servicer as Custodian.. . . . . . 25
SECTION 2.6. Instructions; Authority To Act. . . . . . . 26
SECTION 2.7. Custodian's Indemnification.. . . . . . . . 26
SECTION 2.8. Effective Period and Termination. . . . . . 27
ARTICLE III
Administration and Servicing of the Trust Property
SECTION 3.1. Duties of Servicer. . . . . . . . . . . . . 28
SECTION 3.2. Collection and Allocation of Receivable
Payments . . . . . . . . . . . . . . . . . 28
SECTION 3.3. Realization upon Receivables. . . . . . . . 29
SECTION 3.4. Physical Damage Insurance.. . . . . . . . . 29
SECTION 3.5. Maintenance of Security Interests in
Financed Vehicles. . . . . . . . . . . . . 30
SECTION 3.6. Covenants of Servicer. . . . . . . . . . . 30
SECTION 3.7. Purchase of Receivables upon Breach.. . . . 30
SECTION 3.8. Servicing Fee.. . . . . . . . . . . . . . . 31
SECTION 3.9. Servicer's Certificate. . . . . . . . . . . 31
SECTION 3.10. Annual Statement as to Compliance; Notice
of Default . . . . . . . . . . . . . . . . 31
SECTION 3.11. Annual Independent Certified Public
Accountants' Report. . . . . . . . . . . . 32
SECTION 3.12. Access to Certain Documentation and
Information Regarding Receivables. . . . . 32
SECTION 3.13. Servicer Expenses . . . . . . . . . . . . . 32
SECTION 3.14. Appointment of Subservicers . . . . . . . . 33
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ARTICLE IV
Distributions; Reserve Fund;
Statements to Certificateholders
SECTION 4.1. Establishment of Accounts.. . . . . . . . . 33
SECTION 4.2. Collections. . . . . . . . . . . . . . . . 36
SECTION 4.3. Additional Deposits.. . . . . . . . . . . . 36
SECTION 4.4. Net Deposits. . . . . . . . . . . . . . . . 37
SECTION 4.5. Distributions. . . . . . . . . . . . . . . 37
SECTION 4.6. Reserve Fund. . . . . . . . . . . . . . . . 39
SECTION 4.7. Statements to Certificateholders. . . . . . 40
ARTICLE V
[Intentionally Omitted]
ARTICLE VI
The Certificates
SECTION 6.1. The Certificates. . . . . . . . . . . . . . 42
SECTION 6.2. Authentication and Delivery of
Certificates . . . . . . . . . . . . . . . 43
SECTION 6.3. Registration of Transfer and Exchange of
Certificates . . . . . . . . . . . . . . .43
SECTION 6.4. Reserved. . . . . . . . . . . . . . . . . . 44
SECTION 6.5. Reserved. . . . . . . . . . . . . . . . . . 44
SECTION 6.6. Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . 44
SECTION 6.7. Persons Deemed Owners . . . . . . . . . . . 45
SECTION 6.8. Access to List of Certificateholders'
Names and Addresses. . . . . . . . . . . . 45
SECTION 6.9. Maintenance of Office or Agency.. . . . . . 45
SECTION 6.10. Book-Entry Certificates. . . . . . . . . . 46
SECTION 6.11. Notices to Clearing Agency. . . . . . . . . 47
SECTION 6.12. Definitive Certificates.. . . . . . . . . . 47
ARTICLE VII
The Seller
SECTION 7.1. Representations of Seller. . . . . . . . . 48
SECTION 7.2. Special Purpose Entity. . . . . . . . . . . 50
SECTION 7.3. Liability of Seller; Indemnities. . . . . . 50
SECTION 7.4. Merger or Consolidation of, or Assumption
of the Obligations of, Seller. . . . . . . 52
SECTION 7.5. Limitation on Liability of Seller and
Others . . . . . . . . . . . . . . . . . . 52
SECTION 7.6. Seller May Own Certificates.. . . . . . . . 53
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ARTICLE VIII
The Servicer
SECTION 8.1. Representations of Servicer.. . . . . . . . 53
SECTION 8.2. Indemnities of Servicer.. . . . . . . . . . 55
SECTION 8.3. Merger or Consolidation of, or Assumption
of the Obligations of, Servicer. . . . . . 56
SECTION 8.4. Limitation on Liability of Servicer and
Others . . . . . . . . . . . . . . . . . . 56
SECTION 8.5. Bank One, Arizona, NA Not To Resign as
Servicer . . . . . . . . . . . . . . . . . 57
SECTION 8.6. Existence. . . . . . . . . . . . . . . . . 57
SECTION 8.7. Tax Accounting. . . . . . . . . . . . . . . 57
ARTICLE IX
Servicing Termination
SECTION 9.1. Events of Servicing Termination.. . . . . . 58
SECTION 9.2. Appointment of Successor. . . . . . . . . . 60
SECTION 9.3. Payment of Servicing Fee. . . . . . . . . . 60
SECTION 9.4. Notification to Certificateholders. . . . . 61
SECTION 9.5. Waiver of Past Events of Servicing
Termination. . . . . . . . . . . . . . . . 61
ARTICLE X
The Trustee
SECTION 10.1. Acceptance by Trustee. . . . . . . . . . . 61
SECTION 10.2. Duties of Trustee. . . . . . . . . . . . . 61
SECTION 10.3. Trustee's Certificate. . . . . . . . . . . 63
SECTION 10.4. Trustee's Assignment of Purchased
Receivables . . . . . . . . . . . . . . . 63
SECTION 10.5. Certain Matters Affecting the Trustee. . . 64
SECTION 10.6. Trustee Not Liable for Certificates or
Receivables . . . . . . . . . . . . . . . 65
SECTION 10.7. Trustee May Own Certificates.. . . . . . . 67
SECTION 10.8. Trustee's Fees and Expenses. . . . . . . . 67
SECTION 10.9. Eligibility Requirements for Trustee. . . 67
SECTION 10.10. Resignation or Removal of Trustee. . . . . 68
SECTION 10.11. Successor Trustee. . . . . . . . . . . . . 68
SECTION 10.12. Merger or Consolidation of Trustee . . . . 69
SECTION 10.13. Appointment of Co-Trustee or Separate
Trustee . . . . . . . . . . . . . . . . . 69
SECTION 10.14. Representations and Warranties of
Trustee . . . . . . . . . . . . . . . . . 71
SECTION 10.15. Reports by Trustee.. . . . . . . . . . . . 72
SECTION 10.16. Tax Accounting . . . . . . . . . . . . . . 72
SECTION 10.17. Trustee May Enforce Claims Without
Possession of Certificates. . . . . . . . 72
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ARTICLE XI
Termination
SECTION 11.1. Termination of the Trust.. . . . . . . . . 72
SECTION 11.2. Optional Purchase of All Receivables.. . . 74
ARTICLE XII
Miscellaneous Provisions
SECTION 12.1. Amendment. . . . . . . . . . . . . . . . . 74
SECTION 12.2. Protection of Title to Trust . . . . . . . 75
SECTION 12.3. Limitation on Rights of
Certificateholders. . . . . . . . . . . . 77
SECTION 12.4. Governing Law. . . . . . . . . . . . . . . 78
SECTION 12.5. Notices. . . . . . . . . . . . . . . . . . 78
SECTION 12.6. Severability of Provisions.. . . . . . . . 78
SECTION 12.7. Assignment.. . . . . . . . . . . . . . . . 79
SECTION 12.8. Certificates Nonassessable and Fully
Paid . . . . . . . . . . . . . . . . . . 79
SECTION 12.9. Intention of Parties.. . . . . . . . . . . 79
SECTION 12.10. Counterparts.. . . . . . . . . . . . . . . 79
SECTION 12.11. Collateral Agent Protection. . . . . . . . 80
SECTION 12.12. Limitation of Liability of Trustee and
Collateral Agent . . . . . . . . . . . . 80
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SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Location of Receivable
EXHIBITS
Exhibit A - Form of Class A Certificate
Exhibit B - Form of Class B Certificate
Exhibit C - Form of Servicer's Certificate
Exhibit D - Form of Monthly Statement to Certificateholders
Exhibit E - Form of Benefit Plan Affidavit
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POOLING AND SERVICING AGREEMENT dated as of
June 1, 1996 (the "Agreement"), among Banc One ABS
Corporation, an Ohio corporation (the "Seller"),
Bank One, Arizona, NA, a national banking
association (the "Servicer"), and Bankers Trust
Company, a New York banking corporation, as
trustee hereunder (the "Trustee") and as
collateral agent with respect to the Reserve Fund
(the "Collateral Agent").
In consideration of the premises and of the mutual
agreements herein contained, and other good and valuable
consideration, the receipt of which is acknowledged, the parties
hereto, intending to be legally bound, 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, whenever capitalized shall have the following
meanings:
"ACCOUNTS" has the meaning specified in Section
4.1(a)(ii).
"ACCOUNT PROPERTY" means all amounts and investments
held from time to time in any Account or the Reserve Fund, as the
case may be (whether in the form of deposit accounts, Physical
Property, book-entry securities, uncertificated securities or
otherwise), and all proceeds of the foregoing.
"AFFILIATE" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by,
or under direct or indirect common control with such specified
Person. For purposes of this definition, "control" when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGREEMENT" means, this Pooling and Servicing
Agreement, as the same may be amended and supplemented from time
to time.
"AMOUNT FINANCED" means, with respect to any
Receivable, the amount advanced under such Receivable toward the
purchase price of the related Financed Vehicle and any related
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costs and shown as such in the Contract evidencing such
Receivable.
"APR" or "ANNUAL PERCENTAGE RATE" of a Receivable means
the annual rate of finance charges stated in the related Contract
expressed as a percentage.
"AUTHORIZED OFFICER" means (i) with respect to the
Trustee, any officer within the Corporate Trust Office of the
Trustee, including any vice president, assistant vice president,
second vice president, secretary, assistant secretary or any
other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject and (ii)
with respect to the Servicer, any officer of the Servicer who is
authorized to act for the Servicer in matters relating to the
Trust and who is identified on the list of Authorized Officers
delivered by the Servicer to the Trustee on the Closing Date (as
such list may be modified or supplemented from time to time
thereafter).
"BANK" means Bank One, Arizona, NA
"BANK RECEIVABLES" means the motor vehicle retail
installment sales contracts identified in Schedule A to the Loan
Sale Agreement that are not Valley National Receivables.
"BOOK-ENTRY CERTIFICATES" mean beneficial interests in
the definitive Certificates described in Section 6.10, the
ownership of which shall be evidenced, and transfers of which
shall be made, through book entries by a Clearing Agency as
described in Section 6.10.
"BUSINESS DAY" means a day other than a Saturday, a
Sunday or a day on which banking institutions or trust companies
in New York, New York or Phoenix, Arizona or the city in which
the Corporate Trust Office is located are authorized by law,
regulation, executive order or governmental decree to be closed.
"CERTIFICATE" means any Class A Certificate or Class B
Certificate.
"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 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).
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"CERTIFICATE REGISTER" means the register maintained by
the Trustee for the registration of Certificates and of transfers
and exchanges of Certificates as provided in Section 6.3.
"CERTIFICATEHOLDER" or "HOLDER" means the Person in
whose name 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 Certificate registered in the name of
the Seller, the Servicer or any Person actually known to an
Authorized Officer of the Trustee to be an Affiliate of the
Seller or the Servicer, shall not be taken into account in
determining whether the requisite percentage necessary to effect
any such consent, request or waiver shall have been obtained.
"CLASS A CERTIFICATE" means a certificate executed by
the Trustee on behalf of the Trust and authenticated by the
Trustee, substantially in the form of Exhibit A hereto.
"CLASS A CERTIFICATEHOLDER" or "CLASS A HOLDER" means
the Person in whose name a Class A Certificate shall be
registered in the Certificate Register, EXCEPT THAT, solely for
the purpose of giving any consent, request or waiver pursuant to
this Agreement, the interest evidenced by any Class A Certificate
registered in the name of the Seller, the Servicer or any Person
actually known to an Authorized Officer of the Trustee to be an
Affiliate of the Seller or the Servicer, shall not be taken into
account in determining whether the requisite percentage necessary
to effect any such consent, request or waiver shall have been
obtained.
"CLASS A DISTRIBUTION ACCOUNT" means the account
established and maintained as such pursuant to Section 4.1.
"CLASS A INTEREST CARRYOVER SHORTFALL" means, with
respect to any Distribution Date, the excess of Class A Monthly
Interest for the preceding Distribution Date and any outstanding
Class A Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest that is
actually deposited in the Class A Distribution Account on such
preceding Distribution Date, plus 30 days of interest on such
excess, to the extent permitted by law, at the Class A
Pass-Through Rate.
"CLASS A INTEREST DISTRIBUTION" means, with respect to
any Distribution Date, the sum of Class A Monthly Interest for
such Distribution Date and the Class A Interest Carryover
Shortfall for such Distribution Date.
"CLASS A MONTHLY INTEREST" means, with respect to any
Distribution Date, one-twelfth (or, in the case of the first
Distribution Date, a fraction, the numerator of which is ___ and
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the denominator of which is 360) of the product of the Class A
Pass-Through Rate and the Class A Principal Balance as of the
Distribution Date occurring in the preceding Collection Period
(after giving effect to any payments made on such Distribution
Date) or, in the case of the first Distribution Date, the
Original Class A Principal Balance.
"CLASS A MONTHLY PRINCIPAL" means, with respect to any
Distribution Date, the Class A Percentage of Principal
Collections for such Distribution Date plus the Class A
Percentage of Realized Losses with respect to Receivables which
became Liquidated Receivables during the related Collection
Period.
"CLASS A PASS-THROUGH RATE" means ____% per annum,
calculated on the basis of a 360-day year consisting of twelve
30-day months.
"CLASS A PERCENTAGE" means ____%.
"CLASS A POOL FACTOR" as of the close of business on a
Distribution Date means a seven-digit decimal figure equal to the
Class A Principal Balance (after giving effect to any
distributions made on such Distribution Date) divided by the
Original Class A Principal Balance.
"CLASS A PRINCIPAL BALANCE" equals the Original Class A
Principal Balance, as reduced by all amounts allocable to
principal on the Class A Certificates previously distributed to
Class A Certificateholders.
"CLASS A PRINCIPAL CARRYOVER SHORTFALL" means, with
respect to any Distribution Date, the excess of Class A Monthly
Principal for the preceding Distribution Date and any outstanding
Class A Principal Carryover Shortfall on such preceding
Distribution Date over the amount in respect of principal that is
actually deposited in the Class A Distribution Account on such
preceding Distribution Date.
"CLASS A PRINCIPAL DISTRIBUTION" means, with respect to
any Distribution Date (including the Final Scheduled Distribution
Date), the sum of Class A Monthly Principal for such Distribution
Date and the Class A Principal Carryover Shortfall for such
Distribution Date; PROVIDED, HOWEVER, that the Class A Principal
Distribution shall not exceed the Class A Principal Balance
immediately prior to such Distribution Date. In addition, on the
Final Scheduled Distribution Date, the principal required to be
deposited in the Class A Distribution Account will include the
lesser of (a) any principal due and remaining unpaid on each
Receivable in the Trust as of the Final Scheduled Maturity Date
or (b) the portion of the amount required to be deposited under
clause (a) above that is necessary (after giving effect to the
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other amounts to be deposited in the Class A Distribution Account
on such Distribution Date and allocable to principal) to reduce
the Class A Principal Balance to zero.
"CLASS B CERTIFICATE" means a certificate executed by
the Trustee on behalf of the Trust and authenticated by the
Trustee, substantially in the form of Exhibit B hereto.
"CLASS B CERTIFICATEHOLDER" or "CLASS B HOLDER" means
the Person in whose name a Class B Certificate shall be
registered in the Certificate Register, EXCEPT THAT, solely for
the purpose of giving any consent, request or waiver pursuant to
this Agreement, the interest evidenced by any Class B Certificate
registered in the name of the Seller, the Servicer or any Person
actually known to an Authorized Officer of the Trustee to be an
Affiliate of the Seller or the Servicer, shall not be taken into
account in determining whether the requisite percentage necessary
to effect any such consent, request or waiver shall have been
obtained.
"CLASS B DISTRIBUTION ACCOUNT" means the account
established and maintained as such pursuant to Section 4.1.
"CLASS B INTEREST CARRYOVER SHORTFALL" means, with
respect to any Distribution Date, the excess of Class B Monthly
Interest for the preceding Distribution Date and any outstanding
Class B Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest that is
actually deposited in the Class B Distribution Account on such
preceding Distribution Date, plus 30 days of interest on such
excess, to the extent permitted by law, at the Class B
Pass-Through Rate.
"CLASS B INTEREST DISTRIBUTION" means, with respect to
any Distribution Date, the sum of Class B Monthly Interest for
such Distribution Date and the Class B Interest Carryover
Shortfall for such Distribution Date.
"CLASS B MONTHLY INTEREST" means, with respect to any
Distribution Date, one-twelfth (or, in the case of the first
Distribution Date, a fraction, the numerator of which is ___ and
the denominator of which is 360) of the product of the Class B
Pass-Through Rate and the Class B Principal Balance as of the
Distribution Date occurring in the preceding Collection Period
(after giving effect to any payments made on such Distribution
Date) or, in the case of the first Distribution Date, the
Original Class B Principal Balance.
"CLASS B MONTHLY PRINCIPAL" means, with respect to any
Distribution Date, the Class B Percentage of Principal
Collections for such Distribution Date plus the Class B
Percentage of Realized Losses with respect to Receivables which
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became Liquidated Receivables during the related Collection
Period.
"CLASS B PASS-THROUGH RATE" means ____% per annum,
calculated on the basis of a 360-day year consisting of twelve
30-day months.
"CLASS B PERCENTAGE" means ___%.
"CLASS B POOL FACTOR" as of the close of business on a
Distribution Date means a seven-digit decimal figure equal to the
Class B Principal Balance (after giving effect to any
distributions made on such Distribution Date) divided by the
Original Class B Principal Balance.
"CLASS B PRINCIPAL BALANCE" equals the Original Class B
Principal Balance, as reduced by all amounts allocable to
principal on the Class B Certificates previously distributed to
Class B Certificateholders.
"CLASS B PRINCIPAL CARRYOVER SHORTFALL" means, with
respect to any Distribution Date, the excess of Class B Monthly
Principal for the preceding Distribution Date and any outstanding
Class B Principal Carryover Shortfall on such preceding
Distribution Date over the amount in respect of principal that is
actually deposited in the Class B Distribution Account on such
preceding Distribution Date.
"CLASS B PRINCIPAL DISTRIBUTION" means, with respect to
any Distribution Date (including the Final Scheduled Distribution
Date), the sum of Class B Monthly Principal for such Distribution
Date and the Class B Principal Carryover Shortfall for such
Distribution Date; PROVIDED, HOWEVER, that the Class B Principal
Distribution shall not exceed the Class B Principal Balance
immediately prior to such Distribution Date. In addition, on the
Final Scheduled Distribution Date, the principal required to be
distributed to Class B Certificate- holders will include the
lesser of (a) any principal due and remaining unpaid on each
Receivable in the Trust as of the Final Scheduled Maturity Date
or (b) the portion of the amount required to be deposited under
clause (a) above that is necessary (after giving effect to the
other amounts to be deposited in the Class B Distribution Account
on such Distribution Date and allocable to principal) to reduce
the Class B Principal Balance to zero, and, in the case of
clauses (a) and (b), remaining after any required distribution of
the amount described in clause (a) to the Class A Distribution
Account.
"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 DTC.
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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 and
pledges of securities deposited with the Clearing Agency.
"CLOSING DATE" means June __, 1996.
"CODE" means the Internal Revenue Code of 1986, as
amended.
"COLLATERAL AGENT" means Bankers Trust Company, a New
York banking corporation, in its capacity as collateral agent
with respect to the Reserve Fund for the Certificateholders.
"COLLECTION ACCOUNT" means the account or accounts
established and maintained as such pursuant to Section 4.1.
"COLLECTION PERIOD" means, with respect to any
Distribution Date, the calendar month immediately preceding the
calendar month in which such Distribution Date occurs.
"COLLECTIONS" mean, for a Distribution Date, the sum of
the Interest Collections and Principal Collections for such
Distribution Date.
"COMPUTER TAPE" means the computer tape furnished to
the Trustee describing certain characteristics of the Receivables
as of the Cutoff Date.
"CONTRACT" means a motor vehicle retail installment
sale contract.
"CORPORATE TRUST OFFICE" means the principal office of
the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of
execution of this Agreement is located at 4 Albany Street, New
York, New York 10006, or at such other address as the Trustee may
designate from time to time by notice to the Certificateholders,
the Seller and the Servicer, or the principal corporate trust
office of any successor Trustee (the address of which the
successor Trustee will notify the Certificateholders, the Seller
and the Servicer).
"CUTOFF DATE" means June 1, 1996.
"CUTOFF DATE PRINCIPAL BALANCE" means, with respect to
a Receivable, the Amount Financed minus the sum of (i) that
portion of all payments (including prepayments) made by or on
behalf of the related Obligor prior to the Cutoff Date and
allocable to principal using the Simple Interest Method, (ii) any
portion of extended warranty contract costs or of physical
damage, theft, credit life or disability insurance premiums
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included in the Amount Financed that was refunded prior to the
Cutoff Date and (iii) any prepayment in full or any partial
prepayments applied to reduce the principal balance of the
Receivable, but only to the extent not included in clause (i).
"DEALER" means a dealer who sold a Financed Vehicle and
who originated and assigned the Receivable for such Financed
Vehicle to the Seller under a Dealer Agreement.
"DEALER AGREEMENT" means any agreement between the
Seller and a Dealer relating to the acquisition of Receivables by
the Seller from a Dealer.
"DEFINITIVE CERTIFICATES" shall have the meaning
specified in Section 6.10.
"DELIVERY" when used with respect to Account Property
means:
(a) with respect to bankers' acceptances, commercial
paper, negotiable certificates of deposit and other
obligations that constitute "instruments" within the meaning
of Section 9-105(1)(i) of the UCC and are susceptible of
physical delivery, transfer thereof to the Trustee or
Collateral Agent (all references to the Collateral Agent in
this definition relate to the Reserve Fund), as applicable,
or their respective nominee, agent or custodian by physical
delivery to the Trustee or Collateral Agent, as applicable,
or its nominee, agent or custodian endorsed to, or
registered in the name of, the Trustee or Collateral Agent,
as applicable, or their respective nominee, agent or
custodian or endorsed in blank, and, with respect to a
certificated security (as defined in Section 8-102 of the
UCC) transfer thereof (i) by delivery of such certificated
security endorsed to, or registered in the name of, the
Trustee or Collateral Agent, as applicable, or their
respective nominee, agent or custodian or endorsed in blank
to a financial intermediary (as defined in Section 8-313 of
the UCC) and the making by such financial intermediary of
entries on its books and records identifying such
certificated securities as belonging to the Trustee or
Collateral Agent, as applicable, or their respective
nominee, agent or custodian and the sending by such
financial intermediary of a confirmation of the purchase of
such certificated security by the Trustee or Collateral
Agent, as applicable, or their respective nominee, agent or
custodian, or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102(3) of the UCC) and
the making by such clearing corporation of appropriate
entries on its books reducing the appropriate securities
account of the transferor and increasing the appropriate
securities account of a financial intermediary by the amount
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of such certificated security, the identification by the
clearing corporation of the certificated securities for the
sole and exclusive account of the financial intermediary,
the maintenance of such certificated securities by such
clearing corporation or a "custodian bank" (as defined in
Section 8-102(4) of the UCC) or the nominee of either
subject to the clearing corporation's exclusive control, the
sending of a confirmation by the financial intermediary of
the purchase by the Trustee or Collateral Agent, as
applicable, or their respective nominee, agent or custodian
of such securities and the making by such financial
intermediary of entries on its books and records identifying
such certificated securities as belonging to the Trustee or
Collateral Agent, as applicable, or their respective
nominee, agent or custodian (all of the foregoing, "Physical
Property"), and, in any event, any such Physical Property in
registered form shall be in the name of the Trustee or
Collateral Agent, as applicable, or their respective
nominee, agent or custodian; and such additional or
alternative procedures as may hereafter become appropriate
to effect the complete transfer of ownership of any such
Account Property to the Trustee or Collateral Agent, as
applicable, or their respective nominee, agent or custodian,
consistent with changes in applicable law or regulations or
the interpretation thereof;
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by
the Federal National Mortgage Association that is a
book-entry security held through the Federal Reserve System
pursuant to Federal book-entry regulations, the following
procedures, all in accordance with applicable law, including
applicable Federal regulations and Articles 8 and 9 of the
UCC: book-entry registration of such Account Property to an
appropriate book-entry account maintained with a Federal
Reserve Bank by a financial intermediary which is also a
"depository" pursuant to applicable Federal regulations and
issuance by such financial intermediary of a deposit advice
or other written confirmation of such book-entry
registration to the Trustee or Collateral Agent, as
applicable, or its nominee, agent or custodian of the
purchase by the Trustee or Collateral Agent, as applicable,
or its nominee, agent or custodian of such book-entry
securities; the making by such financial intermediary of
entries in its books and records identifying such book-entry
security held through the Federal Reserve System pursuant to
Federal book-entry regulations as belonging to the Trustee
or Collateral Agent, as applicable, or its nominee, agent or
custodian and indicating that such custodian holds such
Account Property solely as agent for the Trustee or
Collateral Agent, as applicable, or its nominee, agent or
custodian; and such additional or alternative procedures as
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may hereafter become appropriate to effect complete transfer
of ownership of any such Account Property to the Trustee or
Collateral Agent, as applicable, or its nominee, agent or
custodian, consistent with changes in applicable law or
regulations or the interpretation thereof; and
(c) with respect to any item of Account Property that
is an uncertificated security under Article 8 of the UCC and
that is not governed by clause (b) above, registration on
the books and records of the issuer thereof in the name of
the financial intermediary, the sending of a confirmation by
the financial intermediary of the purchase by the Trustee or
Collateral Agent, as applicable, or its nominee, agent or
custodian of such uncertificated security and the making by
such financial intermediary of entries on its books and
records identifying such uncertificated certificates as
belonging to the Trustee or Collateral Agent, as applicable,
or its nominee, agent or custodian.
"DEPOSITORY AGREEMENT" means the agreement among the
Seller, the Trustee and DTC, dated June , 1996.
"DETERMINATION DATE" with respect to any Distribution
Date, means the later of the eighth Business Day and the eleventh
calendar day of the calendar month in which such Distribution
Date occurs.
"DISTRIBUTION DATE" means, with respect to each
Collection Period, the 15th day of the following month (or, if
such 15th day is not a Business Day, the next following Business
Day), commencing July 15, 1996.
"DISTRIBUTION DATE STATEMENT" means, the statement
described in Section 4.7
"DTC" means The Depository Trust Company.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a
segregated account with an Eligible Institution or (b) a
segregated trust account with the corporate trust department of a
depository institution (other than the Seller or any affiliate of
the Seller) organized under the laws of the United States of
America or any one of the States thereof or the District of
Columbia (or any domestic branch of a foreign bank), having
corporate trust powers and acting as trustee for funds deposited
in such account, so long as any of the securities of such
depository institution shall have a credit rating from each
Rating Agency in one of its generic rating categories which
signifies investment grade.
"ELIGIBLE INSTITUTION" means any depository institution
(other than the Seller or any affiliate of the Seller) organized
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under the laws of the United States of America or any one of the
States thereof or the District of Columbia (or any domestic
branch of a foreign bank), which (i) has (A) either a long-term
senior unsecured debt rating of AAA or a short-term senior
unsecured debt or certificate of deposit rating of A-1+ or better
by Standard & Poor's and (B)(1) a long-term senior unsecured debt
rating of A-1 or better and (2) a short-term senior unsecured
debt rating of P-1 or better by Moody's, or any other long-term,
short-term or certificate of deposit rating acceptable to the
Rating Agencies and (ii) whose deposits are insured by the FDIC.
If so qualified, the Trustee and Collateral Agent may be
considered an Eligible Institution.
"ELIGIBLE INVESTMENTS" mean book-entry securities,
negotiable instruments or securities represented by instruments
in bearer or registered form which evidence:
(a) direct obligations of, and obligations fully
guaranteed as to timely payment by, the United States of
America;
(b) demand deposits, time deposits or certificates of
deposit of any depository institution (including the Seller
or any Affiliate of the Seller) or trust company
incorporated under the laws of the United States of America
or any State thereof or the District of Columbia (or any
domestic branch of a foreign bank) and subject to
supervision and examination by Federal or State banking or
depository institution authorities (including depository
receipts issued by any such institution or trust company as
custodian with respect to any obligation referred to in
clause (a) above or portion of such obligation for the
benefit of the holders of such depository receipts);
PROVIDED, HOWEVER, that at the time of the investment or
contractual commitment to invest therein (which shall be
deemed to be made again each time funds are reinvested
following each Distribution Date), the commercial paper or
other short-term senior unsecured debt obligations (other
than such obligations the rating of which is based on the
credit of a Person other than such depository institution or
trust company) of such depository institution or trust
company shall have a credit rating from S&P of A-1+ and from
Moody's of P-1;
(c) commercial paper (including commercial paper of
the Seller or any Affiliate of the Seller) having, at the
time of the investment or contractual commitment to invest
therein, a rating from S&P of A-1+ and from Moody's of P-1;
(d) investments in money market funds (including funds
for which the Seller or the Trustee or any of their
respective Affiliates is investment manager or advisor)
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having a rating from S&P of AAA-m or AAAm-G and from Moody's
of Aaa;
(e) bankers' acceptances issued by any depository
institution or trust company referred to in clause (b)
above;
(f) repurchase obligations with respect to any
security that is a direct obligation of, or fully guaranteed
by, the United States of America or any agency or
instrumentality thereof the obligations of which are backed
by the full faith and credit of the United States of
America, in either case entered into with a depository
institution or trust company (acting as principal) referred
to in clause (b) above; and
(g) any other investment which would not cause either
Rating Agency to downgrade or withdraw its then current
rating of either the Class A Certificates or the Class B
Certificates, as directed in writing by either Rating Agency
to the Trustee.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA ENTITY" means (i) an employee benefit plan,
retirement arrangement, individual retirement account or Keogh
subject to either Title I of ERISA or Section 4975 of the Code,
or (ii) an entity whose source of funds to be used for the
purchase of a Class B Certificate includes the assets of any such
plan, arrangement or account.
"EVENT OF SERVICING TERMINATION" means an event
specified in Section 9.1.
"FDIC" means the Federal Deposit Insurance Corporation.
"FINAL SCHEDULED DISTRIBUTION DATE" means the _______
____ Distribution Date.
"FINAL SCHEDULED MATURITY DATE" means February 2002.
"FINANCED VEHICLE" means a new or used automobile, van
or light duty truck, together with all accessions thereto,
securing an Obligor's indebtedness under the respective
Receivable.
"INDEPENDENT COUNSEL" means, when used with respect to
any specified Person, that the Person (a) is in fact independent
of the Servicer, the Trust, the Seller and any Affiliate of any
of the foregoing Persons and (b) is not an officer or employee of
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the Servicer, the Trust, the Seller or any Affiliate of any of
the foregoing Persons.
"INSOLVENCY EVENT" means, with respect to a specified
Person, (a) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of such Person or
any substantial part of its property in an involuntary case under
any applicable Federal or State bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver
(including any receiver appointed under the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as
amended), liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part
of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(b) the commencement by such Person of a voluntary case under any
applicable Federal or State bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an involuntary case
under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or
the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to
pay its debts as such debts become due, or the taking of action
by such Person in furtherance of any of the foregoing.
"INSURANCE" has the meaning specified in Section 3.4.
"INTEREST COLLECTIONS" for a Distribution Date shall be
the sum of the following amounts with respect to the preceding
Collection Period: (i) that portion of all collections on the
Receivables allocable to interest in respect of such Collection
Period; (ii) Liquidation Proceeds attributable to interest on the
Receivables which became Liquidated Receivables during such
Collection Period in accordance with the Servicer's customary
servicing procedures, to the extent not included in clause (i)
above; (iii) the Purchase Amount of each Receivable that became a
Purchased Receivable during such Collection Period to the extent
attributable to accrued interest on such Receivable; and (iv)
Recoveries received during such Collection Period. Interest
Collections for any Distribution Date shall exclude all payments
and proceeds (including Liquidation Proceeds) of any Receivable,
the Purchase Amount of which has been included in Collections in
a prior Collection Period.
"LIEN" means a security interest, lien, charge, pledge,
or encumbrance of any kind, other than tax liens, mechanics'
liens and any liens that may attach to a Financed Vehicle or
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Receivable by operation of law as a result of any act or omission
by the related Obligor.
"LIQUIDATED RECEIVABLE" means any defaulted Receivable
liquidated by the Servicer through the sale of a Financed Vehicle
or otherwise or which the Servicer has, after using all
reasonable efforts to realize upon such Receivable, charged-off.
"LIQUIDATION PROCEEDS" means, with respect to any
Liquidated Receivable, the moneys collected in respect thereof,
from whatever source (other than any proceeds from any Dealer
reserve) on a Liquidated Receivable during the Collection Period
in which such Receivable became a Liquidated Receivable, net of
the sum of any amounts expended by the Servicer in connection
with such liquidation and any amounts required by law to be
remitted to the Obligor on such Liquidated Receivable.
"LOAN PURCHASE AND SERVICING AGREEMENT" means the
agreement by and between the Bank and Valley National, as such
agreement may be amended from time to time, pursuant to which the
Bank shall purchase the Valley National Receivables from Valley
National.
"LOAN SALE AGREEMENT" means the agreement by and
between the Seller and the Bank, as such agreement may be amended
from time to time, pursuant to which the Seller shall purchase
the Receivables from the Bank.
"MOODY'S" means Moody's Investors Service, Inc., or its
successors in interest.
"OBLIGOR" on a Receivable means the purchaser or the
co-purchasers of the Financed Vehicle and any other Person who is
obligated for the indebtedness arising from such Receivable.
"OFFICERS' CERTIFICATE" means a certificate signed by
the chairman of the board, the president, the vice chairman of
the board, any executive vice president, any senior vice
president or any vice president.
"OPINION OF COUNSEL" means one or more written opinions
of counsel who may, except as otherwise expressly provided in
this Agreement, be employees of or counsel to the Seller or the
Servicer and who shall be reasonably satisfactory to the Trustee,
and which opinion or opinions shall be addressed to the Trustee
as Trustee, and shall be in form and substance satisfactory to
the Trustee; provided, however, that any opinion regarding the
status of the Trust as a grantor trust for federal income tax
purposes shall be delivered by Independent Counsel.
"ORIGINAL CLASS A PRINCIPAL BALANCE" means
$______________.
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"ORIGINAL CLASS B PRINCIPAL BALANCE" means
$_____________.
"ORIGINAL POOL BALANCE" means the aggregate Cutoff Date
Principal Balance of the Receivables, which is $305,686,731.53.
"ORIGINAL PRINCIPAL BALANCE" means the sum of the
Original Class A Principal Balance and the Original Class B
Principal Balance.
"PERSON" means any individual, corporation, estate,
partnership, joint venture, association, joint stock company,
trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision
thereof.
"PHYSICAL PROPERTY" has the meaning assigned to such
term in the definition of "Delivery" above.
"PLAN" has the meaning specified in Section 6.3.
"POOL BALANCE" as of the close of business on the last
day of a Collection Period means the aggregate Principal Balance
of the Receivables (excluding Purchased Receivables and
Liquidated Receivables).
"PRINCIPAL BALANCE" of a Receivable, as of the close of
business on the last day of a Collection Period, means the Amount
Financed minus the sum of (i) that portion of all payments made
by or on behalf of the related Obligor on or prior to such day
and allocable to principal using the Simple Interest Method, (ii)
any refunded portion of extended warranty contract costs or of
physical damage, theft, credit life or disability insurance
premiums included in the Amount Financed, (iii) any payment of
the Purchase Amount with respect to the Receivable allocable to
principal and (iv) any prepayment in full or any partial
prepayments applied to reduce the principal balance of the
Receivable, but only to the extent not included in clause (i).
"PRINCIPAL COLLECTIONS" for a Distribution Date shall
be the sum of the following amounts with respect to the preceding
Collection Period: (i) that portion of all collections on the
Receivables allocable to principal in respect of such Collection
Period; (ii) all Liquidation Proceeds attributable to the
principal amount of Receivables which became Liquidated
Receivables during such Collection Period in accordance with the
Servicer's customary servicing procedures, only to the extent not
included in clause (i) above; (iii) the Purchase Amount of each
Receivable repurchased by the Seller or purchased by the Servicer
during such Collection Period, to the extent attributable to
principal; and (iv) partial prepayments on Receivables in respect
of such Collection Period relating to refunds of extended
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warranty contract costs or of credit life or disability insurance
policy premiums, but only if such costs or premiums were financed
by the respective Obligor and only to the extent not included in
clause (i) above. Principal Collections on any Distribution Date
shall exclude all payments and proceeds (including Liquidation
Proceeds) of any Receivable, the Purchase Amount of which has
been included in Collections in a prior Collection Period.
"PURCHASE AMOUNT" means the amount, as of the close of
business on the last day of a Collection Period, required to
prepay in full a Receivable under the terms thereof including
interest at the APR to the end of the month of purchase.
"PURCHASED RECEIVABLE" means, on any date of
determination, a Receivable as to which payment of the Purchase
Amount has been made by the Seller or the Servicer pursuant to
this Agreement or by the Bank pursuant to the Loan Sale
Agreement.
"RATING AGENCY" means either S&P or Moody's. If no
such organization or successor is any longer in existence,
"Rating Agency" shall be a nationally recognized statistical
rating organization or other comparable Person designated by the
Seller, notice of which designation shall be given to the
Trustee, the Collateral Agent and the Servicer.
"RATING AGENCY CONDITION" means, with respect to any
action, that each Rating Agency shall have been given 10 days'
prior notice thereof (or such shorter period as shall be
acceptable to the Rating Agencies) and that neither of the Rating
Agencies shall have notified the Seller, the Servicer or the
Trustee in writing prior to the expiration of such 10-day period
that such action will, in and of itself, result in a reduction or
withdrawal of the then current rating of either class of
Certificates. With respect to Section 4.2, the Rating Agency
Condition shall be deemed to be satisfied on the Closing Date
after receipt of a letter from each Rating Agency dated such date
stating that the Class A Certificates are rated in the highest
investment rating category and the Class B Certificates are rated
at least "A" or its equivalent.
"REALIZED LOSSES" means, for any period, the excess of
the Principal Balance of any Liquidated Receivable over
Liquidation Proceeds to the extent allocable to principal.
"RECEIVABLE" means any Contract listed on Schedule A
(which Schedule may be in the form of microfiche), but excluding
Liquidated Receivables and Purchased Receivables.
"RECEIVABLE FILE" means, with respect to a Receivable,
the documents, specified in Section 2.4.
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"RECORD DATE" means, in respect of each Collection
Period and the related Distribution Date, the last day of the
calendar month immediately preceding such Distribution Date.
"RECOVERIES" with respect to any Collection Period,
means all monies received by the Servicer with respect to any
Liquidated Receivable during any Collection Period following the
Collection Period in which such Receivable became a Liquidated
Receivable, net of the sum of (i) any expenses incurred by the
Servicer in connection with the collection of such Receivable and
the disposition of the Financed Vehicle (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.
"RELATED FINANCED VEHICLE" means (i) with respect to
Valley National, a new or used automobile, van or light duty
truck, together with all accessions thereto securing the
obligor's indebtedness under a Valley National Receivable and
(ii) with respect to the Bank, a new or used automobile, van or
light duty truck, together with all accessions thereto securing
the obligor's indebtedness under a Bank Receivable.
"RELATED RECEIVABLE" means (i) with respect to Valley
National, a Valley National Receivable and (ii) with respect to
the Bank, a Bank Receivable.
"RELATED RECEIVABLE FILES" has the meaning specified in
Section 2.5(a).
"RESERVE FUND" means the fund established and
maintained as such pursuant to Section 4.1(b).
"RESERVE FUND DEPOSIT" means, with respect to the
Closing Date, $____________.
"S&P" or "STANDARD & POOR'S" means Standard & Poor's
Ratings Services, a Division of The McGraw-Hill Companies, Inc.,
or its successors in interest.
"SCHEDULE OF RECEIVABLES" means each list attached
hereto as Schedule A identifying the Receivables conveyed by the
Seller, which list may be in the form of microfiche, or computer
readable tape or diskette.
"SELLER" means Banc One ABS Corporation, as the seller
of the Receivables, and each successor to Banc One ABS
Corporation, (in the same capacity) pursuant to Section 7.4.
"SERVICER" means Bank One, Arizona, NA, the servicer of
the Receivables, and each successor to Bank One, Arizona, NA (in
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the same capacity) pursuant to Section 8.3, and each successor
Servicer appointed and acting pursuant to Section 9.2.
"SERVICER'S CERTIFICATE" has the meaning specified in
Section 3.9.
"SERVICING FEE" means, with respect to any Distribution
Date, the fee payable to the Servicer for services rendered
during such Collection Period, determined pursuant to Section
3.8.
"SERVICING FEE RATE" shall be ___% per annum,
calculated on the basis of a 360-day year consisting of twelve
30-day months.
"SIMPLE INTEREST METHOD" means the method of allocating
a fixed level payment to principal and interest, pursuant to
which the portion of such payment that is allocated to interest
is equal to the product of the APR multiplied by the unpaid
principal balance multiplied by the period of time elapsed since
the preceding payment of interest was made and the remainder of
such payment is allocable to principal.
"SPECIFIED RESERVE BALANCE" means, with respect to any
Distribution Date, the greater of (a) ____% of the sum of the
Class A Principal Balance and the Class B Principal Balance on
such Distribution Date (after giving effect to all distributions
with respect to the Certificates to be made on such Distribution
Date) or (b) ____% of the sum of the Original Class A Principal
Balance and the Original Class B Principal Balance. In no
circumstances will the Seller be required to deposit any amounts
in the Reserve Fund other than the Reserve Fund Deposit.
"STAMP" has the meaning specified in Section 6.3.
"STATE" means any state in the United States of
America.
"SUBSERVICER" means Valley National Financial Services
Company, the subservicer of the Valley National Receivables
pursuant to the Loan Purchase and Servicing Agreement, and each
successor to Valley National.
"TRANSFER DATE" means, with respect to any Distribution
Date, the Business Day preceding such Distribution Date.
"TRUST" means the Banc One Auto Grantor Trust 1996-B
created by this Agreement.
"TRUSTEE" means Bankers Trust Company, a New York
banking corporation, as Trustee under this Agreement, or any
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successor, and any successor Trustee appointed and acting
pursuant to Sections 10.10 and 10.11.
"TRUST PROPERTY" means the (i) Receivables; (ii) all
monies received under the Receivables on and after the Cutoff
Date; (iii) such amounts as from time to time may be held in the
Collection Account, the Class A Distribution Account and the
Class B Distribution Account (including the Account Property
related thereto); (iv) security interests in the Financed
Vehicles; (v) the Seller's rights, if any, to receive proceeds
from claims on physical damage, credit life, theft and disability
insurance policies covering the Financed Vehicles or the
Obligors; (vi) the rights of the Trustee for the benefit of the
Certificateholders under this Agreement; (vii) the rights to
receive payments under the circumstances specified herein from
the Reserve Fund; (viii) all of the Seller's right, title and
interest in its rights and benefits, but none of its obligations
or burdens, under the Loan Sale Agreement, including the delivery
requirements, representations and warranties and the cure and
repurchase obligations of the Bank under the Loan Sale Agreement;
and (ix)all proceeds (within the meaning of Section 9-306 of the
UCC) of the foregoing.
"UCC" means the Uniform Commercial Code as in effect in
the relevant jurisdiction.
"VALLEY NATIONAL" means Valley National Financial
Services Company, an Arizona corporation and a wholly-owned
subsidiary of the Bank.
"VALLEY NATIONAL RECEIVABLE" means a motor vehicle
retail installment sale contract identified on Schedule A to the
Loan Purchase and Servicing Agreement.
SECTION 1.2. USAGE OF TERMS.
(a) All terms defined in this Agreement shall
have the defined meanings when used in any instrument governed
hereby and in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement, in any instrument
governed hereby and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such instrument, certificate
or other document, and accounting terms partly defined in this
Agreement or in any such instrument, certificate or other
document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting
principles as in effect on the date of this Agreement or any such
instrument, certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement
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or in any such instrument, certificate or other document are
inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this
Agreement or in any such instrument, certificate or other
document shall control.
(c) The words "hereof," "herein," "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement; Article, Section, Schedule and Exhibit
references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this
Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(d) The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and
neuter genders of such terms.
SECTION 1.3. CALCULATIONS. Except as otherwise
specifically provided herein, all calculations of the amount of
interest accrued on the Certificates during any Collection Period
and all calculations of the amount of the Servicing Fee payable
with respect to a Collection Period shall be made on the basis of
a 360-day year consisting of twelve 30-day months.
SECTION 1.4. REFERENCES. All references to the first
day of a Collection Period shall refer to the opening of business
on such day. All references to the last day of a Collection
Period shall refer to the close of business on such day.
SECTION 1.5. REFERENCES TO THE TRUST. Whenever any
provision of this Agreement refers to actions to be taken by the
Trust, matters to be consented to by the Trust, or deliveries or
notices to the Trust, such provision shall be deemed to refer to
actions to be taken by the Trustee, matters to be consented to by
the Trustee, or deliveries or notices to the Trustee.
SECTION 1.6. ACTION BY OR CONSENT OF
CERTIFICATEHOLDERS. Whenever any provision of this Agreement
refers to action to be taken or consented to by
Certificateholders, such provision shall be deemed to refer to
Certificateholders of record as of the Record Date immediately
preceding the date on which such action is to be taken, or
consented to by Certificateholders.
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ARTICLE II
THE TRUST PROPERTY
SECTION 2.1. CONVEYANCE OF TRUST PROPERTY. In
consideration of the Trustee's delivery to, or upon the written
order of, the Seller of authenticated Certificates, in authorized
denominations, in an aggregate amount equal to the Original
Principal Balance, the Seller does hereby sell, transfer, assign
and convey to the Trustee, upon the terms and conditions hereof,
the Trust Property to the Trustee, without recourse.
SECTION 2.2. REPRESENTATIONS AND WARRANTIES AS TO EACH
RECEIVABLE. The Seller makes the following representations and
warranties as to each Receivable conveyed by the Seller to the
Trustee hereunder on which the Trustee shall rely in accepting
the Trust Property in trust and authenticating the Certificates.
Unless otherwise indicated, such representations and warranties
are being made as of the execution and delivery of the Agreement,
but shall survive the sale, transfer and assignment of the
Receivables and the other Trust Property to the Trustee.
(a) TITLE. It is the intention of the Seller that
the transfer and assignment herein contemplated constitute a sale
of the Receivables from the Seller to the Trustee and that the
beneficial interest in and title to such Receivables not be part
of the debtor's estate in the event of the filing of a petition
for bankruptcy or insolvency by or against the Seller. No
Receivable has been sold, transferred, assigned or pledged by the
Seller to any Person other than the Trustee. Immediately prior
to the transfer and assignment herein contemplated, the Seller
had good and marketable title to each Receivable, free and clear
of all Liens and, immediately upon the transfer thereof, the
Trustee shall have good and marketable title to each such
Receivable, free and clear of all Liens; and the transfer of the
Receivables to the Trustee has been perfected under the UCC.
(b) ALL FILINGS MADE. All filings (including UCC
filings) necessary in any jurisdiction to give the Trustee a
first priority perfected ownership interest in the Receivables,
and to give the Trustee a first priority perfected security
interest therein, shall have been made.
(c) CHARACTERISTICS OF RECEIVABLES. (i) Each
Valley National Receivable (A) has been originated either by a
Dealer in the regular course of such Dealer's business and
purchased from such Dealer by Valley National in the ordinary
course of Valley National's business or originated or acquired by
Valley National in the ordinary course of Valley National's
business, and each Obligor was approved in accordance with Valley
National's standard underwriting procedures in effect at the time
such Receivable was originated, acquired or purchased and (B) has
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created or shall create a valid, subsisting and enforceable first
priority security interest in favor of Valley National in the
Related Financed Vehicle, which security interest is assignable
by Valley National to the Bank, by the Bank to the Seller and by
the Seller to the Trustee; (ii) each Bank Receivable (A) has been
originated either by a Dealer in the regular course of such
Dealer's business and purchased from such Dealer by the Bank in
the ordinary course of the Bank's business or originated or
acquired by the Bank in the ordinary course of the Bank's
business, and each Obligor was approved in accordance with the
Bank's standard Underwriting procedures in effect at the time
such Bank Receivable was originated, acquired or purchased and
(B) has created or shall create a valid, subsisting and
enforceable security interest in favor of the Bank in the Related
Financed Vehicle, which security interest is assignable by the
Bank to the Seller and by the Seller to the Trustee; and
(iii) each Receivable (A) contains customary and enforceable
provisions under the laws of the State governing such Receivables
such that the rights and remedies of the holder thereof are
adequate for realization against the collateral of the benefits
of the security; and (B) provides for equal monthly payments at a
fixed rate of interest calculated based on the Simple Interest
Method that fully amortizes the Amount Financed by maturity and
yields interest at the Annual Percentage Rate assuming payments
are made on the due date thereof.
(d) SCHEDULE OF RECEIVABLES. The information set
forth in Schedule A to this Agreement is true and correct in all
material respects as of the opening of business on the Cutoff
Date and no selection procedures adverse to the
Certificateholders were utilized in selecting the Receivables.
The Computer Tape regarding the Receivables is true and correct
in all material respects as of the Cutoff Date.
(e) COMPLIANCE WITH LAW. Each Receivable
complied at the time it was originated or made and at the Closing
Date complies 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 Billing
Act, the Fair Credit Reporting Act, the Federal Trade Commission
Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations B, Z and AA, State adaptations of the Uniform
Consumer Code, the Arizona Consumer Fraud Act, Title 6 of the
Arizona Revised Statute and other consumer credit laws and equal
credit opportunity and disclosure laws.
(f) BINDING OBLIGATION. As of the Cutoff Date,
each Receivable represents the legal, valid and binding payment
obligation in writing of the Obligor thereunder, enforceable by
the holder thereof in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy,
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insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws now or hereafter in effect related to or affecting
creditors' rights generally and subject to general principles of
equity (whether applied in a proceeding at law or in equity).
(g) NO GOVERNMENT OBLIGOR. As of the Cutoff
Date, none of the Receivables is due from the United States of
America or any State or from any agency, department or
instrumentality of the United States of America or any State.
(h) SECURITY INTEREST IN FINANCED VEHICLE.
Immediately prior to the sale, assignment and transfer thereof,
each Receivable shall be secured by a validly perfected first
priority security interest in the Related Financed Vehicle in
favor of the Bank, in the case of a Bank Receivable, or Valley
National, in the case of a Valley National Receivable, as secured
party or all necessary and appropriate actions have been
commenced that would result in the valid perfection of a first
security interest in the Related Financed Vehicle in favor of the
Bank, in the case of a Bank Receivable, or Valley National, in
the case of a Valley National Receivable, as secured party.
(i) RECEIVABLES IN FORCE. As of the Cutoff Date,
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 unless another vehicle
has been substituted as collateral securing the Receivable
without any other modification to such Receivable.
(j) NO WAIVER. As of the Cutoff Date, no
provision of a Receivable has been waived except as reflected in
the Receivable File relating to such Receivable.
(k) NO DEFENSES. As of the Cutoff Date, none of
the Seller, the Bank or Valley National has received notice that
any right of rescission, setoff, counterclaim or defense has been
asserted or threatened with respect to any Receivable.
(l) NO LIENS. None of the Seller, the Bank or
Valley National has received notice of any Liens or claims,
including Liens for work, labor, materials or unpaid State or
Federal taxes relating to any Financed Vehicle securing the
related Receivable, that are or may be prior to or equal to the
Lien granted by such Receivable.
(m) NO DEFAULT. No Receivable has a payment that
is more than 90 days overdue as of the Cutoff Date and, except as
permitted in this paragraph, no default, breach, violation or
event (in any such case) permitting acceleration under the terms
of any Receivable has occurred; and no continuing condition that
with notice or the lapse of time would constitute a default,
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breach, violation or event (in any such case) permitting
acceleration under the terms of any Receivable has arisen as of
the Cutoff Date; and the Seller has not waived and shall not
waive any of the foregoing.
(n) MATURITY OF RECEIVABLES. The weighted
average original maturity of the Receivables is 60.12 months as
of the Cutoff Date; the weighted average remaining term of the
Receivables is 45.97 months as of the Cutoff Date; and the latest
scheduled maturity of any Receivable shall be no later than the
Final Scheduled Maturity Date.
(o) NO BANKRUPTCIES. No Obligor on any
Receivable was noted in the related Receivable File as having
filed for bankruptcy in a proceeding which remained undischarged
as of the Cutoff Date.
(p) NO REPOSSESSIONS. As of the Cutoff Date, no
Financed Vehicle securing any Receivable is in repossession
status.
(q) CHATTEL PAPER. Each Receivable constitutes
"chattel paper" as defined in the UCC.
(r) APR. The weighted average APR of the
Receivables as of the Cutoff Date is approximately 12.15%.
(s) PAID AHEAD. As of the Cutoff Date, no
Receivable is more than six months paid ahead.
(t) PRINCIPAL BALANCE. The average principal
balance of the Receivables as of the Cutoff Date is $9,675.16.
The aggregate Cutoff Date Principal Balance of the Receivables is
$305,686,731.53. As of the Cutoff Date, each Receivable has a
principal balance between $282 and $45,682.
(u) FINANCING. Approximately 45.02% of the
aggregate Cutoff Date Principal Balance of the Receivables,
constituting approximately 37.02% of the number of Receivables as
of the Cutoff Date, represents financing of new vehicles; the
remainder of the Receivables represents financing of used
vehicles.
(v) INSURANCE. The Bank or Valley National, as
the case may be, in accordance with their respective customary
procedures, has determined that the Obligor, at the time the
Related Receivable was originated, obtained, applied for or made
arrangements to obtain physical damage insurance covering the
Related Financed Vehicle and under the terms of the Related
Receivable the Obligor is required to maintain such insurance.
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(w) LAWFUL ASSIGNMENT. No Receivable has been
originated in, or as of the Cutoff Date is subject to the laws
of, any jurisdiction under which the sale, transfer and
assignment of such Receivable or this Agreement, the Loan
Purchase and Servicing Agreement or the Loan Sale Agreement is
unlawful, void or voidable.
(x) NO INSURANCE PREMIUMS. As of the Cutoff
Date, no portion of the Amount Financed of any Receivable
included amounts attributable to the payment of any physical
damage or theft insurance premium.
(y) ONE ORIGINAL. There is only one original
executed copy of each Receivable.
(z) LOCATION OF RECEIVABLE FILES. The Receivable
Files are kept at one or more of the locations listed in Schedule
B.
(aa) COMPUTER RECORDS. As of the Closing Date,
the accounting and computer records of Valley National, relating
to the Valley National Receivables and the Bank and the Seller
relating to the Receivables, have been marked to show the
absolute ownership by the Trustee of the Receivables.
SECTION 2.3. REPURCHASE UPON BREACH. (a) The Seller,
the Servicer or the Trustee, as the case may be, shall inform the
other parties to this Agreement promptly, in writing, upon the
discovery of any breach of the Seller's representations and
warranties made pursuant to Section 2.2. Unless any such breach
shall have been cured within 60 days following the discovery
thereof by the Trustee or receipt by the Trustee of written
notice from the Seller or the Servicer of such breach, the Seller
shall be obligated to repurchase any Receivable in which the
interests of the Certificateholders are materially and adversely
affected by any such breach as of the first day succeeding the
end of such 60 day period that is the last day of a Collection
Period (or, at the Seller's option, the last day of the first
Collection Period following the discovery). In consideration of
and simultaneously with the repurchase of the Receivable, the
Seller shall remit to the Collection Account the Purchase Amount
in the manner specified in Section 4.3 and the Trustee shall
execute such assignments and other documents reasonably requested
by the Seller in order to effect such repurchase.
(b) Pursuant to Sections 2.1, the Seller has conveyed
to the Trustee all of the Seller's right, title and interest in
its rights and benefits, but none of its obligations or burdens,
under the Loan Sale Agreement, including the delivery
requirements, representations and warranties and the cure or
repurchase obligations of the Bank under the Loan Sale Agreement.
The Seller hereby represents and warrants to the Trustee that
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such assignment is valid, enforceable and effective to permit the
Trustee to enforce such obligations of the Bank under the Loan
Sale Agreement.
(c) The sole remedy of the Trust, the Trustee or the
Certificateholders with respect to a breach of representations
and warranties pursuant to Section 2.2 and the agreement
contained in this Section shall be to require the Seller (or the
Bank) to repurchase Receivables pursuant to this Section, subject
to the conditions contained herein. The Trustee shall not have
any duty to conduct any affirmative investigation as to the
occurrence of any conditions requiring the repurchase of any
Receivable pursuant to this Section.
SECTION 2.4. CUSTODY OF RECEIVABLE FILES. To assure
uniform quality in servicing the Receivables and to reduce
administrative costs, the Trustee hereby revocably appoints the
Servicer, and the Servicer hereby accepts such appointment, to
act as the agent of the Trustee as custodian of the following
documents or instruments (the "Receivable File") with respect to
each Receivable:
(i) the original executed copy of the Receivable;
(ii) a record of the information supplied by the
Obligor in the original credit application;
(iii) the original certificate of title or such
documents that the Servicer shall keep on file, in
accordance with its customary procedures, evidencing the
security interest of the Seller in the Financed Vehicle (it
being understood that the original certificates of title
generally are not delivered to the Seller for 90 days but
that promptly upon delivery they shall be delivered to the
Servicer as custodian hereunder); and
(iv) any and all other documents that the Servicer
shall keep on file, in accordance with its customary
procedures, relating to a Receivable, an Obligor or a
Financed Vehicle.
SECTION 2.5. DUTIES OF SERVICER AS CUSTODIAN.
(a) SAFEKEEPING. The Servicer shall hold, subject to the
following sentence, the Receivable Files on behalf of the Trustee
for the benefit of all present and future Certificateholders and
maintain such accurate and complete accounts, records and
computer systems pertaining to each Receivable File as shall
enable the Servicer and the Trustee to comply with this
Agreement. To assure uniform quality in servicing the
Receivables and to reduce administrative costs, the Trustee
acknowledges that, the Servicer may appoint Valley National to
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act as a subcustodian of the Receivable Files of the Valley
National Receivables being serviced by Valley National (the
"Related Receivable Files") pursuant to the terms of the Loan
Purchase and Servicing Agreement. Any such appointment shall not
relieve the Servicer from its obligations as custodian of all the
Receivable Files hereunder. In performing its duties as
custodian the Servicer shall act with reasonable care, using that
degree of skill and attention that the Servicer exercises with
respect to the receivable files relating to all comparable
automotive receivables that the Servicer services for itself or
others, except that the Servicer shall not be obligated, and does
not intend, to (i) pay any premium for force-placed insurance
concerning any Financed Vehicle or (ii) monitor any Obligor's
maintenance of Insurance. The Servicer shall conduct, or cause
to be conducted, periodic audits of the Receivable Files and of
the related accounts, records and computer systems, in such a
manner as shall enable the Trustee to verify the accuracy of the
Servicer's record-keeping in the event the Trustee is required to
do so pursuant to the terms of this Agreement. The Servicer
shall promptly report to the Trustee any failure to hold the
Receivable Files and maintain the 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 the
offices specified in Schedule B to this Agreement or at such
other office of it or any permitted subservicer as shall be
specified to the Trustee by written notice not later than 90 days
after any change in location. Upon reasonable prior notice, the
Servicer shall make available to the Trustee or its duly
authorized representatives, attorneys or auditors a list of
locations of the Receivable Files and the related records and
computer systems and permit access to such Receivable Files at
such times during normal business hours as the Trustee shall
require.
(c) RELEASE OF DOCUMENTS. Upon written
instruction from the Trustee, the Servicer shall release or shall
cause to be released any Receivable File 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 designate, as soon as
practicable and upon the release and delivery of any such
document in accordance with the instructions of the Trustee, the
Servicer shall be released from any further liability and
responsibilities under this Section 2.5 with respect to such
documents unless and until such time as such document may be
returned to the Servicer.
SECTION 2.6. INSTRUCTIONS; AUTHORITY TO ACT. The
Servicer shall be deemed to have received proper instructions
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with respect to the Receivable Files upon its receipt of written
instructions signed by an Authorized Officer of the Trustee.
SECTION 2.7. CUSTODIAN'S INDEMNIFICATION. The
Servicer as custodian shall indemnify and hold harmless the
Trustee and its officers, directors, employees and agents for any
and all liabilities, obligations, losses, compensatory damages,
payments, costs or expenses (including reasonable attorneys' fees
and expenses) that may be imposed on, incurred by or asserted
against the Trustee or any of its officers, directors, employees
and 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 where the final determination
that any such improper act or omission by the Servicer, which
resulted in such liability, obligation, loss, damage, payment,
cost or expense is established by a court of law, by an
arbitrator or by way of settlement agreed to by the Servicer;
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. This
provision shall not be considered to limit the Servicer's or any
other party's rights, obligations, liabilities, claims or
defenses which arise as a matter of law or pursuant to any other
provision of this Agreement.
SECTION 2.8. EFFECTIVE PERIOD AND TERMINATION. (a) The
Servicer's appointment as custodian shall become effective as of
the Cutoff Date and shall continue in full force and effect until
terminated pursuant to this Section. If Bank One, Arizona, NA
shall resign as Servicer in accordance with the provisions of
this Agreement or if all of the rights and obligations of any
Servicer shall have been terminated under Section 9.1, the
appointment of such Servicer as custodian shall be terminated by
the Trustee or by Holders of Certificates evidencing not less
than a majority of the aggregate outstanding principal balance of
the Class A Certificates and the Class B Certificates taken
together as a single class, in the same manner as the Trustee or
such Holders may terminate the rights and obligations of the
Servicer under Section 9.1. The Trustee may terminate the
Servicer's appointment as custodian, with cause, at any time upon
written notification to the Servicer, and without cause upon 30
days' prior written notification to the Servicer and the Rating
Agencies. As soon as practicable after any termination of such
appointment, the Servicer shall deliver, or cause to be
delivered, at its expense the Receivable Files to the Trustee or
the Trustee's agent at such place or places as the Trustee may
reasonably designate in writing. If the Servicer shall be
terminated as custodian hereunder for any reason but shall
continue to serve as Servicer, the Trustee shall, or shall cause
its agent to, make the Receivable Files available to the Servicer
(or, if designated by the Servicer, a permitted subservicer)
during normal business hours upon reasonable notice so as to
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permit the Servicer to perform its obligations as Servicer
hereunder.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
SECTION 3.1. DUTIES OF SERVICER. The Servicer, on
behalf of the Trustee (to the extent provided herein), shall
manage, service, administer and make collections on the
Receivables (other than Purchased Receivables) with reasonable
care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables
that it services for itself or others, except that the Servicer
shall not be obligated, and does not intend, to (i) pay any
premium for force-placed insurance concerning any Financed
Vehicle or (ii) monitor any Obligor's maintenance of Insurance.
The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment coupons
to Obligors, reporting tax information to Obligors, accounting
for collections and furnishing monthly and annual statements to
the Trustee with respect to distributions. Subject to the
provisions of Section 3.2, 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 is authorized and empowered to execute
and deliver, on behalf of itself, the Trust, the Trustee and the
Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or partial or full release or
discharge, and all other comparable instruments, with respect to
such Receivables or to the Financed Vehicles securing such
Receivables. If the Servicer shall commence a legal proceeding
to enforce a Receivable, the Trustee (in the case of a Receivable
other than a Purchased Receivable) shall thereupon be deemed to
have automatically assigned, solely for the purpose of
collection, such Receivable to the Servicer. 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
such Receivable the Trustee shall, at the Servicer's expense and
direction, take steps to enforce such Receivable, including
bringing suit in its name or the name of the Trustee or the
Certificateholders. The Trustee shall upon the written request
of the Servicer execute any powers of attorney and other
documents reasonably necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties
hereunder.
SECTION 3.2. COLLECTION AND ALLOCATION OF RECEIVABLE
PAYMENTS. (a) The Servicer shall make reasonable efforts to
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collect all payments called for under the terms and provisions of
the Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to
all comparable automotive receivables that it services for itself
or others. The Servicer shall allocate collections between
principal and interest in accordance with the customary servicing
procedures it follows with respect to all comparable automotive
receivables that it services for itself or others.
(b) The Servicer may not grant extensions or
modify the original due dates of a Receivable; PROVIDED, HOWEVER,
that the Servicer may grant one extension with respect to a
Receivable of one month in any rolling twelve month period and
may change the original due date once during the term of a
Receivable to a new due date within 20 days of the original
scheduled due date of such Receivable, provided that the Servicer
may not extend the date for final payment by the Obligor of any
Receivable beyond _______________. The Servicer may in its
discretion waive any late payment charge or any other fees that
may be collected in the ordinary course of servicing a
Receivable. The Servicer shall not voluntarily agree to any
reduction of (i) the original interest rate, (ii) the amount of
the original regular scheduled payment or (iii) the Principal
Balance, of any Receivable. The Servicer shall not advance any
funds to any Person as a result of actions taken by it pursuant
to this Section 3.2(b).
SECTION 3.3. REALIZATION UPON RECEIVABLES. On behalf
of the Trust, the Servicer shall use its best efforts, consistent
with its customary servicing procedures, to repossess or
otherwise convert the ownership of the Financed Vehicle securing
any Receivable as to which the Servicer shall have determined
eventual payment in full is unlikely. From time to time, as
appropriate for servicing or foreclosing upon any Receivable, the
Trustee shall, upon written request of the Servicer, execute such
documents as shall be necessary to prosecute any such
proceedings. The Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable
in its servicing of automotive receivables, which may include
reasonable efforts to realize proceeds from Receivables
repurchased by a Dealer, pursuant to a Dealer Agreement, as a
result of a breach of a representation or warranty in the related
Dealer Agreement or a default by an Obligor resulting in the
repossession of the Financed Vehicle under such Dealer Agreement.
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 reasonable discretion that such repair and/or
repossession will increase the Liquidation Proceeds by an amount
greater than the amount of such expenses.
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SECTION 3.4. PHYSICAL DAMAGE INSURANCE. The Servicer
shall (or shall cause the Subservicer to), in accordance with its
customary servicing procedures, require that each Obligor shall
have obtained and shall maintain fire, theft and collision
insurance or comprehensive and collision insurance covering the
Financed Vehicle ("Insurance") as of the execution of the
Receivable. The Servicer shall enforce the rights under the
Receivables to require the Obligors to maintain Insurance, in
accordance with the Servicer's customary practices and procedures
with respect to comparable new or used motor vehicle receivables
that it services for itself or others, except that the Servicer
shall not be obligated, and does not intend, to (i) pay any
premium for force-placed insurance concerning any Financed
Vehicle or (ii) monitor any Obligor's maintenance of Insurance.
SECTION 3.5. MAINTENANCE OF SECURITY INTERESTS IN
FINANCED VEHICLES. The Servicer shall, in accordance with its
customary servicing procedures, take such steps as are necessary
to maintain perfection of the security interest created by each
Receivable in the related Financed Vehicle in favor of the Bank,
in the case of the Bank Receivables, or Valley National, in the
case of the Valley National Receivables. The Servicer is hereby
authorized to take such steps as are necessary to re-perfect such
security interest on behalf of the Trustee in the event of the
relocation of a Financed Vehicle or for any other reason.
SECTION 3.6. COVENANTS OF SERVICER. The Servicer
shall not release the Financed Vehicle secur any Receivable
from the security interest granted by such Receivable in whole or
in part except in the event of payment in full by the Obligor
thereunder or repossession or except as may be required by an
insurer in order to receive proceeds from insurance covering such
Financed Vehicle, nor shall the Servicer impair the rights of the
Trustee or the Certificateholders in such Receivables (it being
understood that no action of the Servicer taken in compliance
with the terms of this Agreement shall be deemed to impair such
rights), nor shall the Servicer increase the number of scheduled
payments due under a Receivable.
SECTION 3.7. PURCHASE OF RECEIVABLES UPON BREACH. The
Servicer or the Trustee shall inform the other party and the
Seller promptly, in writing, upon the discovery of any breach
pursuant to Section 3.2(b), 3.5 or 3.6. Unless the breach shall
have been cured within 60 days following such discovery thereof
by the Trustee or the receipt by the Trustee of notice of such
breach, the Servicer shall be obligated to purchase any
Receivable in which the interests of the Certificateholders are
materially and adversely affected by such breach as of the first
day succeeding the end of such 60 day period that is the last day
of a Collection Period (or, at the Servicer's option, the last
day of the first Collection Period following the discovery). In
consideration of the purchase of any such Receivable pursuant to
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the preceding sentence, the Servicer shall remit the Purchase
Amount in the manner specified in Section 4.3. The sole remedy
of the Trustee or the Certificateholders with respect to a breach
pursuant to Section 3.2(b), 3.5 or 3.6 shall be to require the
Servicer to purchase Receivables pursuant to this Section. The
Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the
purchase of any Receivable pursuant to this Section.
SECTION 3.8. SERVICING FEE. The servicing fee payable
to the Servicer for each Distribution Date shall equal the
product of (i) one-twelfth, (ii) the Servicing Fee Rate and (iii)
the Pool Balance as of the first day of the related Collection
Period (the "Servicing Fee"). As additional servicing
compensation, the Servicer shall also be entitled to retain
certain non-sufficient funds charges and other administrative
fees or similar charges allowed by applicable law with respect to
the Receivables as well as investment earnings (net of losses) on
the Accounts. Any fee of the Subservicer shall be the sole
responsibility of the Servicer.
SECTION 3.9. SERVICER'S CERTIFICATE. On each
Determination Date, the Servicer shall deliver to the Trustee and
the Seller, with a copy to the Rating Agencies, a Servicer's
Certificate (the "Servicer's Certificate") containing all
information necessary to make the distributions pursuant to
Sections 4.5 and 4.6 for the Collection Period preceding the date
of such Servicer's Certificate. Receivables to be purchased by
the Servicer or to be repurchased by the Seller shall be
identified by the Servicer by account number with respect to such
Receivable (as specified in Schedule A).
SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE;
NOTICE OF DEFAULT. (a) The Servicer shall deliver to the
Trustee, on or before April 30 of each year beginning April 30,
1997, an Officers' Certificate, dated as of December 31 of the
preceding year, stating that (i) a review of the activities of
the Servicer during the preceding 12-month period (or, in the
case of the first such report, during the period from the Closing
Date to December 31, 1996) and of its performance under this
Agreement has been made under such officers' supervision and (ii)
to the best of such officers' knowledge, based on such review,
the Servicer has fulfilled all its obligations 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 officers and the nature and status thereof.
The Trustee shall send a copy of such certificate and the report
referred to in Section 3.11 to the Rating Agencies. A copy of
such certificate and the report referred to in Section 3.11 may
be obtained by any Certificateholder by a request in writing to
the Trustee addressed to the Corporate Trust Office.
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(b) The Servicer shall deliver to the Trustee and
the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days
thereafter, written notice in an Officers' Certificate of any
event which with the giving of notice or lapse of time, or both,
would become an Event of Servicing Termination under Section
9.1(a) or (b).
SECTION 3.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS' REPORT. The Servicer shall cause a firm of
independent certified public accountants, which may also render
other services to the Servicer or the Seller, to deliver to the
Seller and the Trustee on or before April 30 of each year
beginning April 30, 1997: [(a) a report expressing a summary of
findings based upon a comparison of the mathematical calculations
of certain amounts set forth in the Distribution Date Statement
during the preceding calendar year (or, in the case of the first
such report, the period from the Closing Date to December 31,
1996) with the Servicer's computer reports that were the source
of such amounts and a report with regard to the assertions by the
Servicer's management about the Servicer's compliance with the
Agreement during the preceding calendar year (or, in the case of
the first such report, the period from the Closing Date to
December 31, 1996) and (b) a report addressed to the Servicer,
the Seller, the Trustee and each Rating Agency to the effect that
(i) such accountants have examined the assertions by the
Servicer's management about the Servicer's compliance with this
Agreement during the preceding calendar year (or, in the case of
the first such report, during the period from the Closing Date to
December 31, 1996) and (ii) in such accountants' opinion, such
assertions are fairly stated in all material respects, except for
such exceptions as such firm shall believe to be immaterial and
such other exceptions as shall be set forth in such report.]
Such report will also indicate that the firm is
independent of the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants.
SECTION 3.12. ACCESS TO CERTAIN DOCUMENTATION AND
INFORMATION REGARDING RECEIVABLES. The Servicer shall provide to
the Certificateholders access to the Receivable Files in such
cases where the Certificateholders shall be required by
applicable statutes or regulations to review such documentation
as demonstrated by evidence satisfactory to the Servicer in its
reasonable judgment. Access shall be afforded without charge,
but only upon reasonable request and during normal business hours
at the offices of the Servicer or the Subservicer, as the case
may be, where the Receivable Files are held. Nothing in this
Section shall affect the obligation of the Servicer or the
Subservicer, as the case may be, to observe any applicable law
prohibiting disclosure of information regarding the Obligors and
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the failure of either of them to provide access to information as
a result of such obligation shall not constitute a breach of this
Section.
SECTION 3.13. SERVICER EXPENSES. The Servicer shall
be required to pay all expenses incurred by it in connection with
its activities hereunder, including fees and disbursements of the
Trustee or its agent and independent accountants, taxes imposed
on the Servicer and expenses incurred in connection with
distributions and reports to Certificateholders.
SECTION 3.14. APPOINTMENT OF SUBSERVICERS. (a) The
Servicer may at any time appoint a subservicer to perform all or
any portion of its obligations as Servicer and/or custodian
hereunder; PROVIDED, HOWEVER, that if such subservicer is a
Person other than Valley National, the Rating Agency Condition
shall have been satisfied in connection therewith; PROVIDED
FURTHER that the Servicer shall remain obligated and be liable to
the Trust, the Trustee and the Certificateholders for the
servicing and administering of the Receivables in accordance with
the provisions hereof without diminution of such obligation and
liability by virtue of the appointment of such subservicer and to
the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Receivables.
For purposes of this Agreement, the Servicer shall be deemed to
have received all amounts received in respect of the Receivables
by any subservicer at the time of receipt of such amounts by such
subservicer. The fees and expenses of the subservicer shall be as
agreed between the Servicer and its subservicer from time to time
and none of the Trust, the Trustee or the Certificateholders
shall have any responsibility therefor.
(b) In connection with the foregoing, the Servicer
shall initially appoint Valley National as a subservicer of the
Valley National Receivables and as subcustodian of the
Receivables Files relating to such Valley National Receivables
pursuant to the Loan Purchase and Servicing Agreement. Following
the occurrence of any Event of Servicing Termination, the Trustee
or any other successor Servicer hereunder shall have the right to
either assume the rights and the obligations of the Bank under
the Loan Purchase and Servicing Agreement or terminate the Loan
Purchase and Servicing Agreement. Any costs associated with the
termination of such Loan Purchase and Servicing Agreement shall
be for the account of the Servicer. In the event the Servicer is
terminated as custodian but not as Servicer, the Trustee may
elect, with the consent of the Servicer, not to terminate Valley
National as subcustodian of the Related Receivable Files and, in
such event, the Servicer shall continue to be responsible for the
fees and expenses of the Valley National.
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ARTICLE IV
DISTRIBUTIONS; RESERVE FUND;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 4.1. ESTABLISHMENT OF ACCOUNTS. (a) (i) The
Trustee shall establish and maintain in the name of the Trustee
one or more Eligible Deposit Accounts (the "Collection Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders. The
Trustee shall establish and maintain in the name of the Trustee
an Eligible Deposit Account (the "Class A Distribution Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Class A
Certificateholders. The Trustee shall establish and maintain in
the name of the Trustee an Eligible Deposit Account (the "Class B
Distribution Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Class B Certificateholders. The Collection Account, the Class A
Distribution Account and the Class B Distribution Account shall
not be held in the State of Arizona.
(ii) Funds on deposit in the Collection Account, the
Class A Distribution Account and the Class B Distribution Account
(collectively, the "Accounts") shall be invested by the Trustee
in Eligible Investments selected in writing by the Servicer;
PROVIDED, HOWEVER, it is understood and agreed that the Trustee
shall not be liable for any loss arising from such investment in
Eligible Investments. All such Eligible Investments shall be
held by the Trustee for the benefit of the beneficiaries of the
applicable Account; PROVIDED, that on each Distribution Date all
interest and other investment income (net of losses and
investment expenses) on funds on deposit therein shall be
withdrawn from the Accounts at the written direction of the
Servicer and shall be paid to the Servicer. Funds on deposit in
the Accounts shall be invested in Eligible Investments that will
mature so that such funds will be available at the close of
business on the Transfer Date preceding the following
Distribution Date. Funds deposited in an Account on a Transfer
Date which immediately precedes a Distribution Date or upon the
maturity of any Eligible Investments are not required to be (but
may be) invested overnight. Neither the Servicer nor the Trustee
shall be liable for any investment losses.
(iii) The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the
Accounts and in all proceeds thereof (including all income
thereon) and all such funds, investments, proceeds and income
shall be part of the Trust Property. Except as expressly
provided herein, the Accounts shall be under the sole dominion
and control of the Trustee. If, at any time, any of the Accounts
ceases to be an Eligible Deposit Account, the Trustee shall
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within 10 Business Days (or such longer period, as to which each
Rating Agency may consent) establish a new Account as an Eligible
Deposit Account and shall transfer any cash and/or any
investments to such new Account. In connection with the
foregoing, the Servicer agrees that, in the event that any of the
Accounts are not accounts with the Trustee, the Servicer shall
notify the Trustee in writing promptly upon any of such Accounts
ceasing to be an Eligible Deposit Account.
(iv) The Servicer shall have the power, revocable by
the Trustee, to instruct the Trustee to make withdrawals and
payments from the Accounts for the purpose of permitting the
Servicer to carry out its duties hereunder or permitting the
Trustee to carry out its duties.
(b) (i) The Servicer, for the benefit of the Trust
and the Certificateholders, shall establish and maintain in the
name of Bankers Trust Company. as Collateral Agent an Eligible
Deposit Account (the "Reserve Fund"). The Reserve Fund shall not
be property of the Trust. [The Reserve Fund shall not be held in
the State of Arizona.]
(ii) Funds on deposit in the Reserve Fund shall be
invested by the Collateral Agent in Eligible 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 arising from such investment in Eligible Investments. All
such Eligible Investments shall be held by the Collateral Agent
for the benefit of the beneficiaries of the Reserve Fund;
PROVIDED, that on each Distribution Date all interest and other
investment income (net of losses and investment expenses) on
funds on deposit therein shall be withdrawn from the Reserve Fund
at the written direction of the Servicer and shall be paid to the
Servicer for distribution to the Seller. Funds on deposit in the
Reserve Fund shall be invested in Eligible Investments that will
mature so that such funds will be available at the close of
business on the Transfer Date preceding the following
Distribution Date. Funds deposited in the Reserve Fund on a
Transfer Date which immediately precedes a Distribution Date or
upon the maturity of any Eligible Investments are not required to
be (but may be) invested overnight. Neither the Servicer nor the
Trustee shall be liable for any investment losses. The Seller
will treat these funds, Eligible Investments and other assets in
the Reserve Fund as its own for Federal, State and local income
tax and franchise tax purposes and will report on its tax returns
all income, gain and loss from the Reserve Fund.
(iii) The Reserve Fund shall be under the sole dominion
and control of the Collateral Agent. If, at any time, the
Reserve Fund ceases to be an Eligible Deposit Account, the
Servicer shall within 10 Business Days (or such longer period, as
to which each Rating Agency may consent) establish a new Reserve
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Fund as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Reserve Fund. In connection
with the foregoing, the Servicer agrees that, in the event that
the Reserve Fund is not an account with the Trustee, the Servicer
shall notify the Trustee in writing promptly upon the Reserve
Fund ceasing to be an Eligible Deposit Account.
(iv) With respect to the Account Property in respect of
the Reserve Fund, the Collateral Agent agrees that:
(A) any Account Property that is held in deposit
accounts shall be held solely in an Eligible Deposit Account
subject to the penultimate sentence of Section 4.1(b)(iii);
and, except as otherwise provided herein, each such Eligible
Deposit Account shall be subject to the exclusive custody
and control of the Collateral Agent, and the Collateral
Agent shall have sole signature authority with respect
thereto;
(B) any Account Property that constitutes Physical
Property shall be delivered to the Collateral Agent in
accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or
disposition, solely by the Collateral Agent or a financial
intermediary (as such term is defined in Section 8-313(4) of
the UCC) acting solely for the Collateral Agent;
(C) any Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal
book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery" and shall be
maintained by the Collateral Agent, pending maturity or
disposition, through continued book-entry registration of
such Account Property as described in such paragraph; and
(D) any Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not
governed by clause (C) above shall be delivered to the
Collateral Agent in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the
Collateral Agent, pending maturity or disposition, through
continued registration of the Collateral Agent's (or its
nominee's) ownership of such security.
(v) The Servicer shall have the power, revocable by
the Trustee, to instruct the Collateral Agent to make withdrawals
and payments from the Reserve Fund for the purpose of permitting
the Servicer to carry out its duties hereunder or permitting the
Collateral Agent to carry out its duties.
SECTION 4.2. COLLECTIONS. (a) The Servicer shall
remit within two Business Days of receipt thereof to the
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Collection Account all payments by or on behalf of the Obligors
with respect to the Receivables (other than certain nonsufficient
funds charges and other administrative fees or similar charges
that may be retained by the Servicer as part of its servicing
compensation in accordance with Section 3.8), and all Liquidation
Proceeds and Recoveries, both as collected during the Collection
Period. Notwithstanding the foregoing, for so long as (i) no
Event of Servicing Termination shall have occurred and be
continuing and (ii) the Rating Agency Condition shall have been
satisfied (and any conditions or limitations imposed by the
Rating Agencies in connection therewith are complied with), the
Servicer shall remit such collections to the Collection Account
on the related Transfer Date. For purposes of this Article IV
the phrase "payments by or on behalf of Obligors" shall mean
payments made with respect to the Receivables by Persons other
than the Servicer or the Seller.
(b) All collections for the Collection Period
shall be applied by the Servicer as follows: with respect to
each Receivable (other than a Purchased Receivable), payments by
or on behalf of the Obligor shall be applied to interest and
principal in accordance with the Simple Interest Method, as
applied by the Servicer. Any excess shall be applied to prepay
the Receivable.
(c) All Liquidation Proceeds shall be applied to
the related Receivable in accordance with the Servicer's
customary servicing procedures.
SECTION 4.3. ADDITIONAL DEPOSITS. The Servicer and
the Seller shall deposit or cause to be deposited in the
Collection Account the aggregate Purchase Amount with respect to
Purchased Receivables and the Seller shall deposit therein all
amounts to be paid under Section 11.2. The Servicer will deposit
the aggregate Purchase Amount with respect to Purchased
Receivables within two Business Days after such obligations
become due, unless the Servicer shall not be required to make
deposits within two Business Days of receipt pursuant to Section
4.2(a) (in which case such deposit will be made by the related
Transfer Date). All such other deposits shall be made on the
Transfer Date following the end of the related Collection Period.
SECTION 4.4. NET DEPOSITS. As an administrative
convenience, unless the Servicer is required to remit collections
within two Business Days of receipt thereof, the Servicer will be
permitted to make the deposit of collections on the Receivables
and Purchase Amounts for or with respect to the Collection Period
net of distributions to be made to the Servicer with respect to
the Collection Period. The Servicer, however, will account to
the Trustee and the Certificateholders as if all deposits,
distributions and transfers were made individually.
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SECTION 4.5. DISTRIBUTIONS. (a) On each
Determination Date, the Servicer shall calculate all amounts
required to determine the amounts to be deposited in the Class A
Distribution Account and the Class B Distribution Account.
(b) Subject to the last paragraph of this Section
4.5(b), on each Distribution Date, the Servicer shall instruct
the Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant
to Section 3.9) to make the following deposits and distributions
for receipt by the Servicer or deposit in the applicable Account
by 12:00 P.M. (New York City time):
(i) to the extent of Interest Collections for such
Distribution Date (and, in the case of shortfalls occurring under
clause (B) below in the Class A Interest Distribution, the Class
B Percentage of Principal Collections for such Distribution Date
to the extent of such shortfalls):
(A) to the Servicer, the Servicing Fee for such
Distribution Date and all unpaid Servicing Fees from prior
Collection Periods (to the extent such amounts have not been
retained pursuant to Section 4.4);
(B) to the Class A Distribution Account, after the
application of clause (A), the Class A Interest Distribution
for such Distribution Date; and
(C) to the Class B Distribution Account, after the
application of clauses (A) and (B), the Class B Interest
Distribution for such Distribution Date; and
(ii) to the extent of the portion of Principal
Collections and Interest Collections for such Distribution Date
remaining after the application of clauses (i)(A), (B) and (C)
above:
(A) to the Class A Distribution Account, the Class A
Principal Distribution for such Distribution Date;
(B) to the Class B Distribution Account, after the
application of clause (A), the Class B Principal
Distribution for such Distribution Date; and
(C) to the Reserve Fund, any amounts remaining after
the application of clauses (i)(A) through (C) and (ii) (A)
and (B).
In the event that the Collection Account is maintained with an
institution other than the Trustee, the Servicer shall instruct
and cause such institution to make all deposits and distributions
pursuant to this Section 4.5(b) on the related Transfer Date.
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The Trustee shall be entitled to conclusively rely on the
Servicer's instructions and any Servicer's Certificate without
investigation.
(c) On each Distribution Date, all amounts on deposit
in the Class A Distribution Account, after application of Section
4.6 below, will be distributed to the Class A Certificateholders
by the Trustee and all amounts on deposit in the Class B
Distribution Account, after application of Section 4.6 below,
will be distributed to the Class B Certificateholders by the
Trustee. Payments under this Section 4.5(c) shall be made to the
Certificateholders either by wire transfer, in immediately
available funds, to the account of such Holder at a bank or other
entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least seven
Business Days prior to such Distribution Date and such Holder's
Certificates in the aggregate evidence a denomination of not less
than $1,000,000 or 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 or the Servicer from the Class A Distribution
Account or the Class B Distribution Account, as applicable, it
shall request the institution maintaining the Class A
Distribution Account or the Class B Distribution Account, as
applicable, to make a wire transfer of the amount to be
distributed and the institution maintaining the Class A
Distribution Account or the Class B Distribution Account, as
applicable, shall promptly deliver to the Trustee a confirmation
of such wire transfer. To the extent that the Trustee is
required to make payments to Certificateholders by check
hereunder, it shall request the institution maintaining the Class
A Distribution Account or the Class B Distribution Account, as
applicable, to provide it with a supply of checks to make such
payments. The institution shall, if a request is made by the
Trustee for a wire transfer in accordance with this Section
4.5(c), wire such funds, in accordance with such instructions by
12:00 P.M. (New York City time) on such Distribution Date, and it
will otherwise act in compliance with the provisions of this
paragraph and the other provisions of this Agreement applicable
to it as the institution maintaining the Class A Distribution
Account or the Class B Distribution Account, as applicable. The
Servicer shall take all necessary action (including requiring an
agreement to such effect) to ensure that any institution
maintaining the Class A Distribution Account or the Class B
Distribution Account, as applicable, agrees to comply, and
complies, with the provisions of this paragraph and the other
provisions of this Agreement applicable to it as the institution
maintaining the Class A Distribution Account or the Class B
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Distribution Account, as applicable. Initially the institution
shall be the Trustee.
SECTION 4.6. RESERVE FUND. (a) On the Closing Date,
the Reserve Fund Deposit shall be deposited into the Reserve Fund
[from the net proceeds from the sale of the Certificates.] The
Seller hereby grants to the Collateral Agent a security interest
in and to the Reserve Fund and any and all property credited
thereto from time to time, including but not limited to Eligible
Investments, to secure payment of the Certificates according to
their terms. Amounts held from time to time in the Reserve Fund
will continue to be held by the Collateral Agent for the benefit
of Class A Certificateholders and the Class B Certificateholders
but the Reserve Fund shall not be an asset of the Trust. By
acceptance of their Certificates, Certificateholders shall be
deemed to have appointed Bankers Trust Company as Collateral
Agent. Bankers Trust Company hereby accepts such appointment as
Collateral Agent.
(b) On each Distribution Date, the Servicer shall
instruct the Collateral Agent (based on the information contained
in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 3.9) to withdraw from the
Reserve Fund on such Distribution Date, to the extent of funds
available therein, the amounts specified below, in the order of
priority specified below, and deposit such amounts in the Class A
Distribution Account or the Class B Distribution Account, as
specified below, on such Distribution Date:
(i) an amount equal to the excess, if any, of the
Class A Interest Distribution for such Distribution Date
over the sum of Interest Collections for such Distribution
Date and the Class B Percentage of Principal Collections for
such Distribution Date will be deposited into the Class A
Distribution Account;
(ii) an amount equal to the excess, if any, of the
Class B Interest Distribution for such Distribution Date
over the portion of Interest Collections for such
Distribution Date remaining after the distribution of the
Class A Interest Distribution for such Distribution Date
will be deposited into the Class B Distribution Account;
(iii) an amount equal to the excess, if any, of the
Class A Principal Distribution for such Distribution Date
over the portion of Principal Collections and Interest
Collections for such Distribution Date remaining after the
distribution of the Class A Interest Distribution and the
Class B Interest Distribution for such Distribution Date
will be deposited into the Class A Distribution Account; and
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(iv) an amount equal to the excess, if any, of the
Class B Principal Distribution for such Distribution Date
over the portion of Principal Collections and Interest
Collections for such Distribution Date remaining after the
distribution of the Class A Interest Distribution, the Class
B Interest Distribution and the Class A Principal
Distribution for such Distribution Date will be deposited
into the Class B Distribution Account.
The Collateral Agent shall be entitled to conclusively rely on
the Servicer's instruction and the Servicer's Certificate without
investigation.
(c) If the amount on deposit in the Reserve Fund on
any Distribution Date (after giving effect to all other deposits
thereto and withdrawals therefrom to be made on such Distribution
Date) is greater than the Specified Reserve Balance for such
Distribution Date, the Servicer shall instruct the Collateral
Agent in writing to distribute the amount of the excess to the
Seller on such Distribution Date. On the date on which the Trust
terminates, any funds remaining in the Reserve Fund (after all
other distributions to be made from the Reserve Fund pursuant to
this Section 4.6 have been made) shall be distributed to the
Seller. Amounts properly distributed to the Servicer for
distribution to the Seller pursuant to Section 4.1(b)(ii) or this
Section 4.6(c) shall not be available under any circumstances to
the Trust, the Trustee or the Certificateholders and the Seller
shall in no event thereafter be required to refund any such
distributed amounts.
SECTION 4.7. STATEMENTS TO CERTIFICATEHOLDERS. (a)
On each Determination Date, the Servicer shall provide to the
Trustee (with a copy to the Rating Agencies) for the Trustee to
forward to each Certificateholder of record a statement (each a
"Distribution Date Statement") setting forth with respect to the
related Collection Period at least the following information as
to the Certificates to the extent applicable:
(i) the amount of the distribution allocable to
principal of 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 Pool Balance as of the close of business on
the last day of such Collection Period;
(iv) the amount of the Servicing Fee paid to the
Servicer with respect to such Collection Period and the
Class A Percentage and Class B Percentage of the Servicing
Fee paid to the Servicer with respect to such Collection
Period;
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(v) the amount of any Class A Interest Carryover
Shortfall, Class A Principal Carryover Shortfall, Class B
Interest Carryover Shortfall and Class B Principal Carryover
Shortfall on the Distribution Date immediately following
such Collection Period and the change in such amounts from
those with respect to the immediately preceding Distribution
Date;
(vi) the Class A Pool Factor and the Class B Pool
Factor as of such Distribution Date, after giving effect to
payments allocated to principal reported under clause (i)
above;
(vii) the amount of the aggregate Realized Losses, if
any, for such Collection Period;
(viii) the aggregate Principal Balance of all Receivables
which were more than 60 days delinquent as of the close of
business on the last day of such Collection Period;
(ix) the amount on deposit in the Reserve Fund on such
Distribution Date, after giving effect to distributions made
on such Distribution Date;
(x) the Class A Principal Balance and the Class B
Principal Balance as of such Distribution Date, after giving
effect to payments allocated to principal reported under
clause (i) above;
(xi) the amount otherwise distributable to the Class B
Certificateholders that is being distributed to the Class A
Certificateholders on such Distribution Date; and
(xii) the aggregate Purchase Amount of Receivables
repurchased by the Seller or purchased by the Servicer with
respect to such Collection Period.
Each amount set forth pursuant to clauses (i), (ii), (iv) and (v)
above shall be expressed in the aggregate and as a dollar amount
per $1,000 of original denomination of a Certificate. Copies of
such statements may be obtained by Certificate Owners by a
request in writing addressed to the Trustee.
(b) Within a reasonable period of time after the end
of each calendar year, but not later than the latest date
permitted by law, the Trustee shall mail, to each Person who at
any time during such calendar year shall have been a
Certificateholder, a statement containing the sum of the amounts
described in clauses (i), (ii), (iv) and (v) above for such
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calendar year or, in the event such Person shall have been a
Certificateholder during a portion of such calendar year, for the
applicable portion of such year, for the purposes of such
Certificateholder's preparation of Federal income tax returns.
In addition, the Servicer shall furnish to the Trustee for
distribution to such Person at such time any other information
necessary under applicable law for the preparation of such income
tax returns.
(c) The Servicer, at its own expense, shall cause a
firm of nationally recognized accountants to prepare any State
tax returns required to be filed by the Trust, and the Trustee
shall execute and file such returns if requested to do so by the
Servicer. The Trustee, upon request, will promptly furnish the
Servicer with all such information known to the Trustee as may be
reasonably required in connection with the preparation of any
state tax returns of the Trust.
ARTICLE V
[Intentionally Omitted]
ARTICLE VI
THE CERTIFICATES
SECTION 6.1. THE CERTIFICATES. The Certificates shall
be issued as Class A Certificates and Class B Certificates,
substantially in the form of Exhibits A and B hereto,
respectively. The Certificates shall be issued in minimum
denominations of $1,000 and integral multiples of $1,000 in
excess thereof; PROVIDED, HOWEVER, that one Class A Certificate
and one Class B Certificate may be issued in a denomination that
represents any remaining portion of the Original Class A
Principal Balance and the Original Class B Principal Balance, as
the case may be. The Certificates shall be executed by the
Trustee on behalf of the Trust by manual or facsimile signature
of an Authorized Officer 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 Trustee, shall be valid and binding
obligations of the Trust, notwithstanding that such individuals
shall have ceased to be so authorized prior to the authentication
and delivery of such Certificates or did not hold such offices at
the date of such Certificates.
SECTION 6.2. AUTHENTICATION AND DELIVERY OF
CERTIFICATES. The Trustee shall cause to be authenticated and
delivered to or upon the written order of the Seller, in exchange
for the Receivables and other Trust Property, simultaneously with
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the sale, assignment and transfer to the Trustee of the
Receivables, and the constructive delivery to the Trustee of the
Receivables Files and the other components of the Trust existing
as of the Closing Date, Certificates duly authenticated by the
Trustee in authorized denominations equalling in the aggregate
the sum of the Original Class A Principal Balance and the
Original Class B Principal Balance, and evidencing the entire
ownership of the Trust. No Certificate shall entitle the Holder
thereof to any benefit under this Agreement, or shall be valid
for any purpose, unless there shall appear on such Certificate a
certificate of authentication, substantially in the form set
forth in the form of Certificates attached hereto as Exhibit A
and Exhibit B respectively, executed by the Trustee by manual
signature. Such authentication shall constitute conclusive
evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder. All Certificates
issued on the Closing Date shall be dated the Closing Date. Any
Certificates issued thereafter shall be dated the date of their
authentication.
SECTION 6.3. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES. The Trustee shall maintain, or cause to be
maintained, at the office or agency to be maintained by it in
accordance with Section 6.9, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. Upon
surrender for registration of transfer of any Class A Certificate
or Class B Certificate at such office or agency, the Trustee
shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Class A
Certificates or Class B Certificates, as the case may be, 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, of authorized
denominations of a like aggregate amount at the office or agency
maintained by the Trustee in accordance with Section 6.9. Every
Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of
transfer duly executed by the Holder and in a form satisfactory
to the Trustee. No service charge shall be made for any
registration of transfer or exchange of Certificates, but the
Trustee 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. All Certificates
surrendered for registration of transfer or exchange shall be
canceled and disposed of in a commercially reasonable manner
approved by the Trustee.
A Class B Certificate may not be directly or indirectly
sold or transferred to, or purchased or acquired by, or on behalf
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of (1) any employee benefit plan, retirement arrangement,
individual retirement account or keogh plan which is subject to
either Title I of ERISA, or Section 4975 of the Code (each, a
"Plan"), or (2) any entity whose source of funds to be used for
the purchase of such Class B Certificate includes the assets of
any such Plan, other than an "Insurance Company General Account"
as defined in, and which complies with the provisions of,
Prohibited Transaction Exemption 95-60 issued by the United
States Department of Labor. Every transferee of a Class B
Certificate represented by a Book-Entry Certificate shall be
deemed to have represented and warranted to the Seller and the
Trustee that it is not an entity described in either clause (1)
or (2) above. Each transferee of a Definitive Certificate shall
deliver a Benefit Plan Affidavit to the Seller and the Trustee in
the form of Exhibit E. Neither the Servicer nor the Trustee will
incur any liability for any transfers made in accordance with
this Section 6.3.
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 duly executed by the Certificateholder or his attorney
duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the
Trustee, which requirements include membership or participation
in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by
the Trustee in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.
SECTION 6.4. RESERVED.
SECTION 6.5. RESERVED.
SECTION 6.6. MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES. If (a) any mutilated Class A Certificate or Class
B Certificate shall be surrendered to the Trustee, or if the
Trustee 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 such
security or indemnity as may be required to save the Trustee
harmless, then in the absence of notice that such Class A
Certificate or Class B Certificate shall have been acquired by a
bona fide purchaser, the Trustee shall execute, authenticate and
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. In connection with the issuance of
any new Certificate under this Section 6.6, the Trustee 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 Certificate issued pursuant to this Section 6.6
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shall constitute conclusive evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
SECTION 6.7. PERSONS DEEMED OWNERS. Prior to due
presentation of a Certificate for registration of transfer, the
Trustee 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 4.5 and for all other
purposes, and the Trustee shall not be bound by any notice to the
contrary.
SECTION 6.8. ACCESS TO LIST OF CERTIFICATEHOLDERS'
NAMES AND ADDRESSES. The Trustee shall furnish or cause to be
furnished to the Servicer, within 15 days after receipt by the
Trustee of a request therefor from the Servicer in writing, in
such form as the Servicer may reasonably require, a list of the
names and addresses of the Certificateholders as of the most
recent Record Date. If Definitive Certificates have been issued,
the Trustee, upon written request by holders of Class A
Certificates or Class B Certificates evidencing not less than 25%
of the aggregate outstanding principal balance of either the
Class A Certificates or the Class B Certificates, as the case may
be, will, within fifteen days after the receipt of such request,
afford such Class A Certificateholders or Class B
Certificateholders access during normal business hours to the
most current list of Certificateholders for purposes of
communicating with other Certificateholders with respect to their
rights under the Agreement. Each Certificateholder, by receiving
and holding a Certificate, shall be deemed to have agreed that
none of the Seller, the Servicer or the Trustee is accountable by
reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
SECTION 6.9. MAINTENANCE OF OFFICE OR AGENCY. The
Trustee shall maintain, or cause to be maintained, at its
expense, in the Borough of Manhattan, The City of New York, an
office or agency where Certificates may be surrendered for
registration of transfer or exchange and where notices and
demands to or upon the Trustee in respect of the Certificates and
this Agreement may be served. The Trustee initially designates
4 Albany Street, New York, New York 10006 or by mail to the
Corporate Trust Office as its office for such purposes. The
Trustee shall give prompt written notice to the Servicer and to
Certificateholders of any change in the location of any such
office or agency.
SECTION 6.10. BOOK-ENTRY CERTIFICATES. Upon original
issuance, the Class A Certificates and the Class B Certificates
shall be issued in the form of one or more typewritten
Certificates representing the Book-Entry Certificates, to be
delivered to DTC or its custodian, by, or on behalf of, the
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Seller. Such Certificates shall initially be registered on the
Certificate Register in the name of Cede & Co., the nominee of
DTC, 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 6.12. Unless and until
definitive, fully-registered Certificates ("Definitive
Certificates") have been issued to Class A Certificateholders or
Class B Certificateholders, as the case may be, pursuant to
Section 6.12:
(i) the provisions of this Section 6.10 shall be in
full force and effect;
(ii) the Seller, the Servicer and the Trustee may deal
with the Clearing Agency for all purposes (including the
making of distributions on the Certificates and the taking
of actions by the Certificateholders) as the authorized
representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section
6.10 conflict with any other provisions of this Agreement,
the provisions of this Section 6.10 shall control;
(iv) the rights of Certificate Owners shall be
exercised only through the Clearing Agency and shall be
limited to those established by law, the rules, regulations
and procedures of the Clearing Agency and agreements between
such Certificate Owners and the Clearing Agency 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 rules, regulations and procedures of the
Clearing Agency;
(v) pursuant to the Depository Agreement, DTC 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; and
(vi) Certificate Owners may own beneficial interest in
Certificates representing original denominations of $1,000
and integral multiples of $1,000 in excess thereof except
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for any residual amount of Original Class A Principal
Balance or Original Class B Principal Balance.
For purposes of any provision of this Agreement
requiring or permitting actions with the consent of, or at the
direction of, Holders of Certificates evidencing specified
percentages of the aggregate outstanding principal balance of
such Certificates, such direction or consent may be given by
Certificate Owners having interests in the requisite percentage,
acting through the Clearing Agency.
SECTION 6.11. 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 6.12, the Trustee shall give all such notices
and communications specified herein to be given to
Certificateholders to the Clearing Agency.
SECTION 6.12. DEFINITIVE CERTIFICATES. If (i) (A) the
Seller advises the Trustee in writing that the Clearing Agency is
no longer willing or able properly to discharge its
responsibilities under the Depository Agreement and (B) the
Trustee or the Servicer is unable to locate a qualified
successor, (ii) the Seller, 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, Holders of Certificates evidencing not
less than a majority of the aggregate outstanding principal
balance of the Class A Certificates and the Class B Certificates,
taken together as a single Class, 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 their best interests, the Trustee shall
notify the Clearing Agency which shall be responsible to notify
the Certificate Owners 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 the 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. Neither the Seller, the Servicer nor 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, the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
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Definitive Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably
acceptable to the Trustee, as evidenced by its execution thereof.
Neither the Trust, the Seller, the Servicer nor the Trustee will
have any responsibility or obligation to any Clearing Agency
Participants or the Persons for whom they act as nominees with
respect to (1) the accuracy of any records maintained by DTC or
any Clearing Agency Participants, (2) the payment by DTC or any
Clearing Agency Participant of any amount due to any beneficial
owner in respect of the Principal Balance of, or interest on, the
Certificates, (3) the delivery by any Clearing Agency Participant
of any notice to any Certificate Owner which is required or
permitted hereunder to be given to Certificateholders or (4) any
other action taken by DTC or its nominee as the
Certificateholder.
ARTICLE VII
THE SELLER
SECTION 7.1. REPRESENTATIONS OF SELLER. The Seller
makes the following representations on which the Trustee is
deemed to have relied in accepting the Receivables and other
Trust Property in trust and in executing and authenticating the
Certificates. The representations are being made as of the
execution and delivery of this Agreement and shall survive the
sale and assignment of the Receivables and other Trust Property
to the Trustee.
(a) ORGANIZATION AND GOOD STANDING. The Seller is
duly organized and validly existing as a corporation in the
State of Ohio with the corporate 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,
the power, authority and legal right to acquire and own the
Receivables.
(b) POWER AND AUTHORITY OF THE SELLER. The Seller has
the corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder; the
Seller has full corporate power and authority to sell and
assign the property to be sold and assigned to and deposited
with the Trustee and the Seller has duly authorized such
sale and assignment to the Trustee by all necessary
corporate action; and the execution, delivery and
performance of this Agreement been duly authorized by the
Seller by all necessary corporate action.
(c) BINDING OBLIGATION. This Agreement constitutes a
legal, valid and binding obligation of the Seller,
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enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter
in effect relating to creditors' rights generally and
subject to general principles of equity (whether applied in
a proceeding at law or in equity).
(d) NO VIOLATION. The consummation of the
transactions contemplated by this Agreement and the
fulfillment of the terms hereof do not result in any breach
of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under,
the articles of incorporation or code of regulations of the
Seller, or any indenture, agreement or other instrument to
which the Seller is a party or by which it shall be bound;
nor 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 (other than
pursuant to this Agreement); nor violate any law or, to the
best of its knowledge, any order, rule or regulation
applicable to the Seller of any court or of any Federal or
State regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Seller or its properties.
(e) NO PROCEEDINGS. There are no proceedings or
investigations pending against the Seller or, to its best
knowledge, threatened against the Seller, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its
properties: (i) asserting the invalidity of this Agreement
or the Certificates, (ii) seeking to prevent the issuance of
the Certificates or the consummation of any of the
transactions contemplated by this Agreement, (iii) seeking
any determination or ruling that could reasonably be
expected to have a material and adverse effect on the
performance by the Seller of its obligations under, or the
validity or enforceability of this Agreement or the
Certificates or (iv) seeking to affect adversely the Federal
or State income tax or ERISA attributes of the Trust or the
Certificates.
(f) ALL CONSENTS. All authorizations, consents,
orders or approvals of or registrations or declarations with
any court, regulatory body, administrative agency or other
government instrumentality required to be obtained, effected
or given by the Seller in connection with the execution and
delivery by the Seller of this Agreement and the performance
by the Seller of the transactions contemplated by this
Agreement have been duly obtained, effected or given and are
in full force and effect, except where failure to obtain the
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same would not have a material adverse effect upon the
rights of the Trust or the Certificateholders.
SECTION 7.2. SPECIAL PURPOSE ENTITY. The Seller has
been formed as a special purpose entity whose business shall be
limited to those activities specified in its articles of
incorporation. The Seller agrees that it shall not, under any
circumstances, seek the protection of federal bankruptcy laws or
any similar state or local laws providing for the relief of
debtors.
SECTION 7.3. LIABILITY OF SELLER; INDEMNITIES. The
Seller shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Seller under
this Agreement.
(a) The Seller shall indemnify, defend and hold
harmless the Trust and the Trustee and the Trustee's
officers, directors, employees and agents from and against
any taxes that may at any time be asserted against any such
Person with respect to the transactions contemplated in this
Agreement (except any income taxes arising out of fees paid
to the Trustee and except any taxes to which the Trustee may
otherwise be subject to not related to this Agreement),
including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but,
in the case of the Trust, not including any taxes asserted
with respect to, and as of the date of, the issuance and
original sale of the Certificates or asserted with respect
to ownership of the Receivables or Federal or other income
taxes arising out of distributions on the Certificates) and
costs and expenses in defending against the same or in
connection with any application relating to the Certificates
under any State securities laws.
(b) The Seller shall indemnify, defend and hold
harmless the Trust, the Trustee and the Certificateholders
and the officers, directors, employees and agents of the
Trustee from and against any and all costs, expenses,
losses, claims, damages and liabilities to the extent
arising out of, or imposed upon such Person through (i) the
Seller's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason
of reckless disregard of its obligations and duties under
this Agreement and (ii) the Seller's or the Trust's
violation of Federal or State securities laws in connection
with the offering and sale of the Certificates or in
connection with any application relating to the Certificates
under any State securities laws.
(c) The Seller shall be liable as primary obligor
for, and shall indemnify, defend and hold harmless the
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Trustee and its officers, directors, employees and agents
from and against any and all costs, expenses, losses,
claims, damages and liabilities (including reasonable
attorneys' fees and expenses) arising out of, or incurred in
connection with, this Agreement, the Trust Property, the
acceptance or performance of the trusts and duties set forth
herein or the action or the inaction of the Trustee
hereunder (including the Trustee's execution of any Arizona
tax return pursuant to Section 4.7(c)) except to the extent
that such cost, expense, loss, claim, damage or liability:
(i) shall be due to the willful misfeasance, bad faith or
negligence of the Trustee or (ii) shall arise from any
breach by the Trustee of its covenants, representations or
warranties under this Agreement. Such liability shall
survive the termination of the Trust.
(d) The Seller shall pay any and all taxes levied or
assessed upon all or any part of the Trust Property (other
than those taxes expressly excluded from the Seller's
responsibilities pursuant to the parentheticals in paragraph
(a) above).
Indemnification under this Section shall survive the
resignation or removal of the Trustee and the termination of this
Agreement and shall include reasonable fees and expenses of
counsel and other expenses of litigation. If the Seller shall
have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter
shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Seller, without interest.
SECTION 7.4. MERGER OR CONSOLIDATION OF, OR ASSUMPTION
OF THE OBLIGATIONS OF, SELLER. Any Person (a) into which the
Seller may be merged or consolidated, (b) which may result from
any merger or consolidation to which the Seller shall be a party
or (c) which may succeed to the properties and assets of the
Seller substantially as a whole, shall be the successor to the
Seller without the execution or filing of any document or any
further act by any of the parties to this Agreement; PROVIDED,
HOWEVER, that the Seller hereby covenants that it will not
consummate any of the foregoing transactions except upon
satisfaction of the following: (i) the surviving Seller if other
than Banc One ABS Corporation, either (a) executes an agreement
of assumption to perform every obligation of the Seller under
this Agreement or (b) delivers to the Trustee an Opinion of
Counsel stating that the surviving Seller is obligated to perform
every obligation of the Seller under this Agreement without the
execution of an agreement of assumption or any other action not
previously taken by the surviving Seller, (ii) immediately after
giving effect to such transaction, no representation or warranty
made pursuant to Section 2.2 or 7.1 shall have been breached,
(iii) the Seller shall have delivered to the Trustee an Officers'
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Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of
assumption, if any, comply with this Section and that all
conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and that
the Rating Agency Condition shall have been satisfied with
respect to such transaction, (iv) such transaction will not
result in a material adverse Federal or State tax consequence to
the Trust or the Certificateholders and (v) unless Banc One ABS
Corporation is the surviving entity, the Seller shall have
delivered to the Trustee an Opinion of Counsel either (A) stating
that, in the opinion of such counsel, all financing statements
and continuation statements and amendments thereto have been
executed and filed that are necessary fully to preserve and
protect the interest of the Trustee in the Receivables and
reciting the details of such filings, or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to
preserve and protect such interests.
SECTION 7.5. LIMITATION ON LIABILITY OF SELLER AND
OTHERS. The Seller and any director or officer or employee or
agent of the Seller may rely in good faith on the advice of
counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters
arising under this Agreement (provided that such reliance shall
not limit in any way the Seller's obligations under Section 2.2).
The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement, and that in its opinion
may involve it in any expense or liability except this shall not
relieve the Seller from its obligations to indemnify pursuant to
Section 7.3.
SECTION 7.6. SELLER MAY OWN CERTIFICATES. The Seller
and any Affiliate thereof may in its individual or any other
capacity become the owner or pledgee of Certificates with the
same rights as it would have if it were not the Seller or an
Affiliate thereof, except as expressly provided herein.
ARTICLE VIII
THE SERVICER
SECTION 8.1. REPRESENTATIONS OF SERVICER. The
Servicer makes the following representations on which the Trustee
is deemed to have relied in accepting the Receivables and other
Trust Property in trust and in authenticating the Certificates.
The representations are being made as of the execution and
delivery of this Agreement and shall survive the sale and
assignment of the Receivables and other Trust Property to the
Trustee.
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(a) ORGANIZATION AND GOOD STANDING. The Servicer
is duly organized and validly existing as a national banking
association with the corporate 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, the power, authority and legal
right to service the Receivables.
(b) DUE QUALIFICATION. The Servicer is duly
qualified to do business and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including the
servicing of the Receivables as required by this Agreement) shall
require such qualifications.
(c) POWER AND AUTHORITY OF THE SERVICER. The
Servicer has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder,
and the execution, delivery and performance of this Agreement
have been duly authorized by the Servicer by all necessary
corporate action. All authorizations, consents, orders or
approvals of or registrations or declarations with any court,
regulatory body, administrative agency or other government
instrumentality required to be obtained, effected or given by the
Servicer in connection with the execution and delivery by the
Servicer of this Agreement and the performance by the Servicer of
the transactions contemplated by this Agreement have been duly
obtained, effected or given and are in full force and effect,
except where failure to obtain the same would not have a material
adverse effect upon the rights of the Trust or the
Certificateholders.
(d) BINDING OBLIGATION. This Agreement
constitutes a legal, valid and binding obligation of the
Servicer, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in
effect relating to creditors' rights generally or the rights of
creditors of banks the deposit accounts of which are insured by
the FDIC, and subject to general principles of equity (whether
applied in a proceeding of law or in equity).
(e) NO VIOLATION. The consummation of the
transactions contemplated by this Agreement and the fulfillment
of the terms hereof do not result in any breach of any of the
terms and provisions of, nor constitute (with or without notice
or lapse of time or both) a default under the articles of
association or by-laws of the Servicer, or any material
indenture, agreement or other instrument to which the Servicer is
a party or by which it shall be bound; nor result in the creation
or imposition of any Lien upon any of its properties pursuant to
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the terms of any such indenture, agreement or other instrument
(other than pursuant to this Agreement); nor violate any law or,
to the best of its 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.
(f) NO PROCEEDINGS. There are no proceedings or
investigations pending against the Servicer, or, to its best
knowledge, threatened against the Servicer, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement or
the Certificates, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement, (iii) seeking any determination
or ruling that could reasonably be expected to have a material
and adverse effect on the performance by the Servicer of its
obligations under, or the validity or enforceability of this
Agreement or the Certificates or (iv) seeking to affect adversely
the Federal or State income tax or ERISA attributes of the Trust
or the Certificates.
(g) NO AMENDMENT OR WAIVER. No provision of any
Receivable has been waived, altered or modified in any respect,
except pursuant to a document, instrument or writing included in
the relevant Receivable File, and no such amendment, waiver,
alteration or modification causes such Receivable not to conform
to the other warranties contained in this Section or those of the
Seller contained in Section 2.2.
(h) LOCATION OF RECEIVABLE FILES. The Receivable
Files are kept in the offices of the Servicer, specified in
Schedule B, or at such other office specified in accordance with
Section 2.4.
SECTION 8.2. INDEMNITIES OF SERVICER. The Servicer
shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer under this
Agreement.
The Servicer shall indemnify, defend and hold harmless
the Trust, the Trustee, the Seller and the Certificateholders and
any of the officers, directors, employees and agents of the
Trustee or the Seller from any and all costs, expenses, losses,
claims, damages and liabilities (including reasonable attorneys'
fees and expenses) to the extent arising out of, or imposed upon
any such Person through, the negligence, willful misfeasance or
bad faith of the Servicer in the performance of its obligations
and duties under this Agreement, the performance of the
obligations and duties of Valley National under the Loan Purchase
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and Servicing Agreement or in the performance of the obligations
and duties of any other subservicer under any other subservicing
agreement or by reason of the reckless disregard of its
obligations and duties under this Agreement or by reason of the
reckless disregard of the obligations of Valley National under
the Loan Purchase and Servicing Agreement or any other
subservicer under any other subservicing agreement, where the
final other determination that any such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon any
such Person through, any such negligence, willful misfeasance,
bad faith or recklessness on the part of the Servicer, Valley
National or any other subservicer, is established by a court of
law, by an arbitrator or by way of settlement agreed to by the
Servicer. Notwithstanding the foregoing, if the Servicer is
rendered unable, in whole or in part, by virtue of an act of God,
act of war, fires, earthquake or other natural disasters, to
satisfy its obligations under this Agreement, the Loan Purchase
and Servicing Agreement or any subservicing agreement, the
Servicer shall not be deemed to have breached any such obligation
upon the sending of written notice of such event to the other
parties hereto, for so long as the Servicer remains unable to
perform such obligation as a result of such event. This
provision shall not be construed to limit the Servicer's, Valley
National's, any subservicer's or any other party's rights,
obligations, liabilities, claims or defenses which arise as a
matter of law or pursuant to any other provision of this
Agreement, the Loan Purchase and Servicing Agreement or any
subservicing agreement.
The Servicer shall indemnify, defend and hold harmless
the Trust, the Trustee, the Seller, the Certificateholders or any
of the officers, directors, employees and agents of the Trustee
or the Seller from any and all costs, expenses, losses, claims,
damages and liabilities (including reasonable attorneys' fees and
expenses) to the extent arising out of or imposed upon any such
Person as a result of any compensation payable to any
subcustodian or subservicer (including any fees payable in
connection with the release of any Receivable File from the
custody of such subservicer or in connection with the termination
of the servicing activities of such subservicer with respect to
any Receivable) whether pursuant to the terms of any subservicing
agreement or otherwise.
SECTION 8.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION
OF THE OBLIGATIONS OF, SERVICER. Any Person (a) into which the
Servicer may be merged or consolidated, (b) which may result from
any merger or consolidation to which the Servicer shall be a
party or (c) which may succeed to the properties and assets of
the Servicer, substantially as a whole, shall be the successor to
the Servicer without the execution or filing of any document or
any further act by any of the parties to this Agreement;
PROVIDED, HOWEVER, that the Servicer hereby covenants that it
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will not consummate any of the foregoing transactions except upon
satisfaction of the following: (i) the surviving Servicer if
other than Bank One, Arizona, NA, either (a) executes an
agreement of assumption to perform every obligation of the
Servicer under this Agreement or (b) delivers to the Trustee an
Opinion of Counsel stating that the surviving Servicer is
obligated to perform every obligation of the Servicer under this
Agreement without the execution of an agreement of assumption or
other action not previously taken by the surviving Servicer,
(ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 8.1 shall
have been breached and no Event of Servicing Termination, and no
event that, after notice or lapse of time, or both, would become
an Event of Servicing Termination shall have occurred and be
continuing, (iii) the Servicer shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such
agreement of assumption, if any, comply with this Section and
that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with,
and that the Rating Agency Condition shall have been satisfied
with respect to such transaction, and (iv) such transaction will
not result in a material adverse Federal or State tax consequence
to the Trust or the Certificateholders.
SECTION 8.4. LIMITATION ON LIABILITY OF SERVICER AND
OTHERS. Neither the Servicer nor any of its directors, officers,
employees or agents shall be under any liability to the Trust or
the Certificateholders, except as provided under this Agreement,
for any action taken or for refraining from the taking of any
action in good faith by the Servicer or any subservicer 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, bad faith or negligence in the
performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer,
Valley National or any other subservicer and any of their
respective directors, officers, employees or agents may rely in
good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters
arising under this Agreement.
Except as otherwise provided in this Agreement the
Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that shall be incidental to
its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense
or liability; PROVIDED, HOWEVER, that the Servicer, may (but
shall not be required to) undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement to
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protect the interests of the Certificateholders under this
Agreement.
SECTION 8.5. BANK ONE, ARIZONA, NA NOT TO RESIGN AS
SERVICER. Subject to the provisions of Section 8.3, Bank One,
Arizona, NA, hereby agrees not to resign from the obligations and
duties hereby imposed on it as Servicer under this Agreement
except upon determination that the performance of its duties
hereunder shall no longer be permissible under applicable law or
if such resignation is required by regulatory authorities.
Notice of any such determination permitting the resignation of
Bank One, Arizona, NA, as Servicer shall be communicated to the
Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at
the earliest practicable time) and any such determination shall
be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee concurrently with or promptly after such notice. No
such resignation shall become effective until the earlier of the
Trustee or a successor Servicer having assumed the
responsibilities and obligations of the resigning Servicer in
accordance with Section 9.2 or the date upon which any regulatory
authority requires such resignation.
SECTION 8.6. EXISTENCE. Subject to the provisions of
Sections 7.4 and 8.3, during the term of this Agreement, Bank
One, Arizona, NA, will keep in full force and effect its
existence, rights and franchises as a national banking
association under the laws of the United States and will obtain
and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary
to protect the validity and enforceability of this Agreement and
each other instrument or agreement necessary or appropriate to
the proper administration of this Agreement and the transactions
contemplated hereby.
SECTION 8.7. TAX ACCOUNTING. The Servicer shall
prepare any Federal tax returns of the Trust in accordance with
the Code and any regulations (including, to the extent applicable
by their terms, proposed regulations) thereunder. To the extent
not inconsistent with any such regulations, such returns shall be
prepared in a manner consistent with the following rules:
(a) The Class A Certificateholders shall be treated as
owning the Class A Percentage of Interest Collections (but
limited to the Class A Certificate Rate plus the Servicing Fee
Rate) and Principal Collections and the Class B
Certificateholders shall be treated as owning the Class B
Percentage of Interest Collections (but limited to the Class B
Certificate Rate plus the Servicing Fee Rate) and Principal
Collections. The Seller shall be treated as having retained the
stripped coupons on the Class A Percentage and the Class B
Percentage of each Receivable equal to the difference between the
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APR of such Receivable and the portion owned by the Class A and
Class B Certificateholders, respectively, pursuant to this
paragraph.
(b) To the extent that as a result of the
subordination provisions of this Agreement, actual cash
distributions to the Class B Certificateholders are less than the
amount set forth in subsection (a), the Class B
Certificateholders shall be deemed to have (i) received the
amount set forth in subsection (a), (ii) paid such difference to
the Class A Certificateholders pursuant to a guaranty of the
Class A Certificates, and (iii) become subrogated to the rights
of the Class A Certificateholders to recovery of the amounts so
paid.
ARTICLE IX
SERVICING TERMINATION
SECTION 9.1. EVENTS OF SERVICING TERMINATION. If any
one of the following events ("Events of Servicing Termination")
shall occur and be continuing:
(a) any failure by the Servicer to deliver to the
Trustee for deposit in any of the Accounts or the Reserve
Fund any required payment or to direct the Trustee or the
Collateral Agent, as applicable, to make any required
distributions therefrom that shall continue unremedied for a
period of five Business Days after written notice of such
failure is received by the Servicer from the Trustee or the
Collateral Agent, as applicable, or after discovery of such
failure by an Authorized Officer of the Servicer; or
(b) any failure by the Servicer duly to observe or to
perform in any material respect any other covenants or
agreements of the Servicer set forth in this Agreement,
which failure shall (i) materially and adversely affect the
rights of either the Class A Certificateholders or the Class
B Certificateholders and (ii) continue unremedied for a
period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have
been given (A) to the Servicer by the Trustee or (B) to the
Servicer and to the Trustee by Holders of Certificates
evidencing not less than 25% of the aggregate outstanding
principal balance of the Class A Certificates and Class B
Certificates taken together as a single class (or for such
longer period, not in excess of 120 days, as may be
reasonably necessary to remedy such default; provided that
such default is capable of remedy within 120 days and the
Servicer delivers an Officers' Certificate to the Trustee to
such effect and to the effect that the Servicer has
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commenced or will promptly commence, and will diligently
pursue, all reasonable efforts to remedy such default); or
(c) an Insolvency Event occurs with respect to the
Servicer or any successor;
then, and in each and every case, so long as the Event of
Servicing Termination shall not have been remedied within any
applicable cure period, either the Trustee, or the Holders of
Certificates evidencing not less than a majority of the aggregate
outstanding principal balance of the Class A Certificates and the
Class B Certificates taken together as a single class, by notice
then given in writing to the Servicer and the Trustee may
terminate all the rights and obligations (other than the
obligations set forth in Section 8.2) 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, without further action, pass to
and be vested in the Trustee or such successor Servicer as may be
appointed under Section 9.2; and, without limitation, the Trustee
is hereby authorized and empowered to execute and deliver, on
behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do
or accomplish all other acts or things necessary or appropriate
to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and
related documents, or otherwise. The predecessor Servicer shall
cooperate with the successor Servicer 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, or shall thereafter be received
by it with respect to a Receivable. All reasonable costs and
expenses (including attorneys' fees) incurred in connection with
transferring the Receivable Files to the successor Servicer and
amending this Agreement to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor
Servicer upon presentation of reasonable documentation of such
costs and expenses. Upon receipt of notice of the occurrence of
an Event of Servicing Termination, the Trustee shall give notice
thereof to the Rating Agencies.
SECTION 9.2. APPOINTMENT OF SUCCESSOR. (a) Upon the
Servicer's receipt of notice of termination, pursuant to Section
9.1 or the Servicer's resignation in accordance with the terms of
this Agreement, the predecessor Servicer shall continue to
perform its functions as Servicer under this Agreement, in the
case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice
of termination, until receipt of such notice and, in the case of
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resignation, until the earlier of (x) the date 45 days from the
delivery to the Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms
of this Agreement and (y) the date upon which the predecessor
Servicer shall become unable to act as Servicer, as specified in
the notice of resignation and accompanying Opinion of Counsel.
In the event of the Servicer's termination hereunder, the Trustee
shall appoint a successor Servicer, and the successor Servicer
shall accept its appointment by a written assumption in form
acceptable to the Trustee. In the event that a successor
Servicer has not been appointed at the time when the predecessor
Servicer has ceased to act as Servicer in accordance with this
Section, the Trustee without further action shall automatically
be appointed the successor Servicer and the Trustee shall be
entitled to the Servicing Fee. Notwithstanding the above, the
Trustee shall, if it shall be unwilling or unable so to act,
appoint or petition a court of competent jurisdiction to appoint,
any established institution, having a net worth of not less than
$50,000,000 and whose regular business shall include the
servicing of automotive receivables, as the successor to the
Servicer under this Agreement.
(b) Upon appointment, the successor Servicer
(including the Trustee acting as successor servicer) shall be the
successor in all respects to the predecessor Servicer and shall
be subject to all the responsibilities, duties and liabilities of
the Servicer arising thereafter and shall be entitled to the
Servicing Fee and all the rights granted to the Servicer by the
terms and provisions of this Agreement. No successor Servicer
shall be liable for any acts or omissions of any predecessor
Servicer.
(c) The Servicer may not resign unless it is
prohibited from serving as such by law or by requirement of any
regulatory authority.
SECTION 9.3. PAYMENT OF SERVICING FEE. If the
Servicer shall change, the predecessor Servicer shall be entitled
to receive any accrued and unpaid Servicing Fees through the date
of the successor Servicer's acceptance hereunder in accordance
with Section 3.8.
SECTION 9.4. NOTIFICATION TO CERTIFICATEHOLDERS. Upon
any termination of, or appointment of a successor to, the
Servicer pursuant to this Article IX, the Trustee shall give
prompt written notice thereof to Certificateholders and the
Rating Agencies.
SECTION 9.5. WAIVER OF PAST EVENTS OF SERVICING
TERMINATION. The Holders of Certificates evidencing not less
than a majority of the aggregate outstanding principal balance of
the Class A Certificates and the Class B Certificates taken
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together as a single class, may, on behalf of all
Certificateholders, waive in writing any default by the Servicer
in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to
or payments from any of the Accounts or the Reserve Fund in
accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Events 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 thereto.
ARTICLE X
THE TRUSTEE
SECTION 10.1. ACCEPTANCE BY TRUSTEE. The Trustee, by
its execution of this Agreement, accepts all consideration
conveyed by the Seller pursuant to Section 2.1 and the Trust
created hereunder and declares that it shall hold such
consideration in trust upon the terms hereof set forth for the
benefit of the Certificateholders.
SECTION 10.2. DUTIES OF TRUSTEE. (a) The Trustee,
both prior to and after the curing of an Event of Servicing
Termination, undertakes to perform only such duties as are
specifically set forth in this Agreement and no implied covenants
or obligations shall be read into this Agreement against the
Trustee. If an Event of Servicing Termination shall have
occurred and shall not have been cured (the appointment of a
successor Servicer (including the Trustee) to constitute a cure
for the purposes of this Article), 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 man would exercise or use under the circumstances in
the conduct of his own affairs; PROVIDED, HOWEVER, that if the
Trustee assumes the duties of the Servicer pursuant to Section
9.2, the Trustee in performing such duties shall use the degree
of skill and attention required by Section 3.1.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee that are required
specifically to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they conform
to the requirements of this Agreement.
(c) 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, its own bad faith or
its own willful misconduct; PROVIDED, HOWEVER, that:
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(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 are 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 (solely in its capacity as such) 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 (solely in its
capacity as such) may conclusively rely on the truth of the
statements and the correctness of the opinions expressed
upon any certificates or opinions furnished to the Trustee
and conforming to the requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of
judgment made in good faith by an 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 liable with respect to
any action taken, suffered, or omitted to be taken in good
faith in accordance with the direction of the Holders of
Certificates evidencing not less than a majority of the
aggregate outstanding principal balance of the Class A
Certificates and the Class B Certificates taken together as
a single class, as set forth in Section 9.1, 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.
(d) The Trustee (solely in its capacity as such) shall
not be required to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that
the repayment of such funds or adequate indemnity reasonably
satisfactory to it 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 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.
(e) Except for actions expressly authorized by this
Agreement, the Trustee shall take no action reasonably likely to
impair the security interests created or existing under any
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Receivable or Financed Vehicle or to impair the value of any
Receivable or Financed Vehicle.
(f) The Trustee shall have no power to vary the corpus
of the Trust including (i) accepting any substitute obligation
for a Receivable initially assigned to the Trustee under this
Agreement, (ii) adding any other investment, obligation or
security except for investments of moneys in the Accounts as
permitted in this Agreement, or (iii) withdrawing any Receivable,
except for a withdrawal permitted under this Agreement.
SECTION 10.3. TRUSTEE'S CERTIFICATE. As soon as
practicable after each Transfer Date on which Receivables shall
be assigned to the Seller pursuant to Section 2.3 or 11.2, as
applicable, or to the Servicer pursuant to Section 3.7, the
Trustee shall execute a certificate, prepared by the Servicer,
including its date and the date of the Agreement, and accompanied
by a copy of the Servicer's Certificate for the related
Collection Period. The Trustee's certificate shall operate, as
of such Transfer Date, as an assignment pursuant to Section 10.4.
SECTION 10.4. TRUSTEE'S ASSIGNMENT OF PURCHASED
RECEIVABLES. With respect to all Receivables repurchased by the
Seller or the Bank pursuant to Section 2.3 or 11.2, or purchased
by the Servicer pursuant to Section 3.7, the Trustee shall
assign, without recourse, representation or warranty, to the
Seller, the Bank or to the Servicer, as the case may be, all the
Trustee's right, title and interest in and to such Receivables,
and all security and documents and all other Trust Property
conveyed pursuant to Section 2.1 with respect to such
Receivables. Such assignment shall be a sale and assignment
outright, and not for security. If, in any enforcement suit or
legal proceeding, it is held that the Seller, the Bank or the
Servicer, as the case may be, may not enforce any such 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 expense of the Seller or the Servicer, as the case may be,
take such steps as the Seller or the Servicer, as the case may
be, deems necessary to enforce the Receivable, including bringing
suit in the Trustee's name or the names of the
Certificateholders.
SECTION 10.5. CERTAIN MATTERS AFFECTING THE TRUSTEE.
Except as otherwise provided in Section 10.2:
(i) The Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate of auditors or accountants or any other
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, appraisal, bond, note or
other paper or document believed by it to be genuine and to
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have been signed or presented by the proper party or
parties.
(ii) The Trustee may consult with counsel and any
Opinion of Counsel or any advice of such 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 Opinion
of Counsel or any advice of such counsel.
(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 satisfactory
to it against the costs, expenses, and liabilities that may
be incurred therein or thereby.
(iv) The Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion, rights or
powers conferred upon it by this Agreement; PROVIDED,
HOWEVER, that the Trustee's conduct does not constitute
willful misfeasance, negligence or bad faith.
(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 of any
matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent,
direction, order, approval, bond, note or other paper or
document, unless requested in writing so to do by Holders of
Certificates evidencing not less than a majority of the
aggregate outstanding principal balance of the Class A
Certificates and the Class B Certificates taken together as
a single class; 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 an investigation requested by the
Certificateholders is, 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 satisfactory to it against such
cost, expense, or liability as a condition to so proceeding.
The reasonable expense of every such examination shall be
paid by the Servicer, or, if paid by the Trustee, shall be
reimbursed by the Servicer upon demand. Nothing in this
clause (v) shall affect the obligation of the Servicer to
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observe any applicable law prohibiting disclosure of
information regarding the Obligors; PROVIDED, FURTHER, that
the Trustee shall be entitled to make such further inquiry
or investigation into such facts or matter as it may
reasonably see fit, and if the Trustee shall determine to
make such further inquiry or investigation it shall be
entitled to examine the books and records of the Servicer or
the Seller, personally or by agent or attorney, at the sole
cost and expense of the Servicer or Seller, as the case may
be.
(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, attorneys, nominees
or a custodian, and shall not be liable for the acts of such
agents, attorneys, nominees or custodians provided that they
have been appointed with due care.
(vii) The Trustee shall not be required to make any
initial or periodic examination of any documents or records
related to the Receivables or Financed Vehicles for the
purpose of establishing the presence or absence of defects,
the compliance by the Seller with their representations and
warranties or for any other purpose.
SECTION 10.6. TRUSTEE NOT LIABLE FOR CERTIFICATES OR
RECEIVABLES. The Trustee assumes no responsibility for the
correctness of the recitals contained herein and in the
Certificates (other than the Trustee's execution of, and the
certificate of authentication on, the Certificates). Except as
expressly provided herein, the Trustee makes no representations
as to the validity or sufficiency of this Agreement or of the
Certificates (other than the Trustee's execution of, and the
certificate of authentication on, the Certificates), or of any
Receivable or related document, or for the validity of the
execution by the Seller and the Servicer of this Agreement or of
any supplements hereto or instruments of further assurance, or
for the sufficiency of the Trust Property hereunder, and the
Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or
agreements on the part of the Seller or the Servicer under this
Agreement except as herein set forth; but the Trustee may require
the Seller or the Servicer to provide full information and advice
as to the performance of the aforesaid covenants, conditions and
agreements. The Trustee (solely in its capacity as such) shall
have no obligation to perform any of the duties of the Seller or
the Servicer, except as explicitly set forth in this Agreement.
The Trustee shall have no liability in connection with compliance
of the Servicer or the Seller with statutory or regulatory
requirements related to the Receivables. The Trustee shall not
make or be deemed to have made any representations or warranties
with respect to the Receivables or the validity or sufficiency of
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any assignment of the Receivables to the Trust or the Trustee.
The Trustee (solely in its capacity as such) shall at no time
have any responsibility or liability for, or with respect to, the
legality, validity or enforceability of any security interest in
any Financed Vehicle or (prior to the time, if any, that the
Servicer is terminated as custodian hereunder) any Receivable, or
the perfection and priority of such a security interest or the
maintenance of any such perfection and priority, the efficacy of
the Trust or its ability to generate funds sufficient to provide
for the payments to be distributed to Certificateholders under
this Agreement, the existence, condition, location and ownership
of any Financed Vehicle, 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, the
performance or enforcement of any Receivable, the compliance by
the Seller with any warranty or representation made under this
Agreement or in any related document and the accuracy of any such
warranty or representation, prior to the Trustee's receipt of
notice or other discovery of any noncompliance therewith or any
breach thereof, any investment of monies by the Servicer or any
loss resulting therefrom (it being understood that the Trustee
shall remain responsible for any Trust Property that it may
hold), the acts or omissions of the Seller, the Servicer, 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 that such instruction is not in express
violation of the terms and provisions of this Agreement);
PROVIDED, HOWEVER, that the foregoing shall not relieve the
Trustee of its obligation to perform its duties under this
Agreement. Except with respect to a claim based on the failure
of the Trustee to perform its duties under this Agreement
(whether in its capacity as Trustee or as successor Servicer) or
based on the Trustee's willful misfeasance, negligence or bad
faith, or based on the Trustee's breach of a representation and
warranty contained in Section 10.14, no recourse shall be had to
the Trustee (whether in its individual capacity or as Trustee)
for any claim 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. The Trustee shall not be accountable for the use or
application by the Seller of the proceeds of such Certificates,
or for the use or application of any funds paid to the Servicer
in respect of the Receivables prior to the time such amounts are
deposited in the Collection Account (whether or not the
Collection Account is maintained with the Trustee). The Trustee
shall have no liability for any losses from the investment or
reinvestment in Eligible Investments made in accordance with
Section 4.1.
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SECTION 10.7. TRUSTEE MAY OWN CERTIFICATES. The
Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would
have if it were not Trustee.
SECTION 10.8. TRUSTEE'S FEES AND EXPENSES. The
Servicer agrees to pay to the Trustee, and the Trustee shall be
entitled to, reasonable compensation as is agreed upon in writing
between the Trustee and the Servicer (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 as Trustee, and the Servicer shall pay or
reimburse the Trustee upon its request for all reasonable
expenses (including, without limitation, expenses incurred in
connection with notices or other communications to
Certificateholders), disbursements and advances (including the
reasonable compensation and the reasonable expenses and
disbursements of its counsel and of all persons not regularly in
its employ) incurred or made by the Trustee in accordance with
any of the provisions of this Agreement (including the reasonable
fees and expenses of its agents, any co-trustee and counsel) or
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. The Servicer's covenant to pay the expenses,
disbursements and advances provided for in the preceding sentence
and the Servicer's indemnity pursuant to Section 8.2 shall
survive the termination of this Agreement.
SECTION 10.9. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The trustee shall be organized and doing business under the
banking laws of such State or of the United States, shall be
authorized under such laws to exercise corporate trust powers,
shall have a combined capital and surplus of at least
$50,000,000, shall have a credit rating of at least Baa3 from
Moody's and shall be subject to supervision or examination by
Federal or State banking authorities. If such corporation 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 10.9, the
consolidated net worth of such corporation shall be deemed to be
its consolidated capital and surplus as set forth in its most
recent consolidated report of condition so published. In case at
any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 10.9, the Trustee shall
resign immediately in the manner and with the effect specified in
Section 10.10.
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SECTION 10.10. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign and be discharged from
the trusts hereby created by giving 30 days' prior written notice
thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a successor
Trustee, by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one
copy 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.
(b) If at any time the Trustee shall cease to be
eligible in accordance with the provisions of Section 10.9 and
shall fail to resign after written request therefor by the
Servicer, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged bankrupt or insolvent, or a
receiver, conservator or liquidator 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 Servicer may remove the Trustee. If the Trustee is
removed under the authority of the immediately preceding
sentence, the Servicer shall promptly appoint a successor trustee
by written instrument, in duplicate, one copy of which instrument
shall be delivered to the Trustee so removed, the successor
Trustee, the Certificateholders at their respective addresses of
record and the Rating Agencies.
(c) Any resignation or removal of the Trustee and
appointment of a successor Trustee pursuant to any of the
provisions of this Section 10.10 shall not become effective until
acceptance of appointment by the successor Trustee pursuant to
Section 10.11.
(d) The respective obligations of the Seller and the
Servicer described in this Agreement shall survive the removal or
resignation of the Trustee as provided in this Agreement.
SECTION 10.11. SUCCESSOR TRUSTEE. (a) Any successor
Trustee appointed pursuant to Section 10.10 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 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
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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.
(b) No successor Trustee shall accept appointment as
provided in this Section 10.11 unless at the time of such
acceptance such successor Trustee shall be eligible pursuant to
Section 10.9.
(c) Upon acceptance of appointment by a successor
Trustee pursuant to this Section 10.11, the Servicer shall mail
notice of such acceptance by the successor 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 ten days after acceptance of
appointment by the successor Trustee, the successor Trustee shall
cause such notice to be mailed at the expense of the Servicer.
SECTION 10.12. MERGER OR CONSOLIDATION OF TRUSTEE. Any
corporation or banking association which is eligible to be a
successor Trustee under Section 10.9 (i) into which the Trustee
may be merged or consolidated, (ii) that may result from any
merger, conversion, or consolidation to which the Trustee shall
be a party, or (iii) that may succeed by purchase and assumption
to the business of the Trustee, where the Trustee is not the
surviving entity, which corporation or banking association
executes an agreement of assumption to perform every obligation
of the Trustee under this Agreement, shall be the successor of
the Trustee hereunder, without the execution or filing of any
instrument or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding. The
Trustee shall promptly notify the Servicer and the Rating
Agencies of any such merger, conversion, consolidation or
purchase and assumption where the Trustee is not the surviving
entity.
SECTION 10.13. APPOINTMENT OF CO-TRUSTEE OR SEPARATE
TRUSTEE. (a) 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
Property 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 10.13, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee
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may consider necessary or desirable. 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 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 under this Agreement shall be
required to meet the terms of eligibility as a successor trustee
pursuant to Section 10.9 and no notice to Certificateholders of
the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.11. Notwithstanding the
appointment of a co-trustee or separate trustee hereunder, the
Trustee shall not be relieved of any of its obligations under
this Agreement.
(b) 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 Property or any
portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee.
(ii) No trustee under this Agreement shall be liable
by reason of any act or omission of any other trustee under
this Agreement.
(iii) The Servicer and the Trustee acting jointly may
at any time accept the resignation of or remove any separate
trustee or co-trustee.
(c) 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 in particular to
the provisions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument
of appointment, either jointly with the Trustee or separately, as
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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.
(d) 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.
The Trustee shall promptly notify the Servicer and the Rating
Agencies of any appointment made pursuant to this Section 10.13.
SECTION 10.14. REPRESENTATIONS AND WARRANTIES OF
TRUSTEE. The Trustee makes the following representations and
warranties on which the Seller, the Servicer, and
Certificateholders may rely:
(i) ORGANIZATION AND GOOD STANDING. The Trustee is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of New York;
(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; and
(iii) ENFORCEABILITY. This Agreement has been duly
executed and delivered by the Trustee and this Agreement
constitutes a legal, valid and binding obligation of the
Trustee enforceable against the Trustee in accordance with
its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or
in equity).
SECTION 10.15. REPORTS BY TRUSTEE. The Trustee shall
provide to any Certificateholder or Certificate Owner who so
requests in writing (addressed to the Corporate Trust Office) a
copy of any Servicer's Certificate, the annual statement
described in Section 3.10, and the annual accountant's
examination described in Section 3.11. The Trustee may require
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any Certificateholder or Certificate Owner requesting such report
to pay a reasonable sum to cover the cost of the Trustee's
complying with such request.
SECTION 10.16. TAX ACCOUNTING. The Servicer shall
prepare any Federal tax returns of the Trust in accordance with
the Code and any regulations (including, to the extent applicable
by their terms, proposed regulations) thereunder. In no event
shall the Trustee in its individual capacity be liable for any
liabilities, costs or expenses of the Trust, the
Certificateholders, the Seller or the Servicer arising under any
tax law or regulation, including, without limitation, Federal,
State or local income or excise taxes or any tax imposed on or
measured by income (or any interest or penalty with respect
thereto or arising from any failure to comply therewith).
Notwithstanding the foregoing, in no event shall the Trustee be
liable hereunder for any liabilities, costs or expenses incurred
from any information furnished to it by the Servicer or failure
to furnish information by the Servicer in a timely manner.
SECTION 10.17. 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 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
obtained.
ARTICLE XI
TERMINATION
SECTION 11.1. TERMINATION OF THE TRUST. (a) The
Trust, and the respective obligations and responsibilities of the
Seller, the Servicer and the Trustee hereunder shall terminate
(except as otherwise expressly provided herein) upon the earliest
of: (i) the Distribution Date next succeeding the purchase by
the Seller at its option, pursuant to Section 11.2, of the
Receivables remaining in the Trust, (ii) the payment to
Certificateholders of all amounts required to be paid to them
pursuant to this Agreement or (iii) the Distribution Date next
succeeding the month which is [ten] months after the maturity or
the liquidation of the last Receivable held in the Trust and the
disposition of any amounts received upon liquidation of any
property remaining in the Trust; PROVIDED, HOWEVER, in no event
shall the Trust created hereby continue beyond the expiration of
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21 years from the death of the last survivor of the descendants
of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.
The Servicer shall promptly notify the Trustee of any prospective
termination pursuant to this Section 11.1.
(b) Notice of any termination, specifying the
Distribution Date upon which the Certificateholders may surrender
the Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the
Trustee by letter to Certificateholders and the Rating Agencies
mailed not earlier than the 15th day and not later than the 25th
day of the month next preceding the specified Distribution Date
stating the amount of any such final payment and that the Record
Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and
surrender of the Certificates at the office of the Trustee
therein specified. Upon presentation and surrender of the
Certificates, the Trustee shall cause to be distributed to
Certificateholders amounts distributable on such Distribution
Date pursuant to Section 4.5. Amounts remaining after
distribution, or providing for distribution, to the
Certificateholders shall be distributed to the Seller.
(c) 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 to surrender their Certificates
for cancellation and receive the final distribution with respect
thereto. The Trustee shall after giving such notice deliver or
cause to be delivered to the Servicer the Certificate Register.
If within one year after the second notice all the Certificates
shall not have been surrendered for cancellation, the Servicer
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. Any such funds held pending such
distribution shall be held uninvested. Any funds remaining in
the Trust after exhaustion of such remedies shall be distributed
by the Trustee to the Seller.
SECTION 11.2. OPTIONAL PURCHASE OF ALL RECEIVABLES.
In the event that the Pool Balance is 5% or less of the Original
Pool Balance as of the first day of any Collection Period, the
Seller shall have the option to purchase the corpus of the Trust
on any Distribution Date occurring in a subsequent Collection
Period. To exercise such option, the Seller shall deposit
pursuant to Section 4.3 the sum of the Class A Principal Balance
and the Class B Principal Balance plus accrued and unpaid
interest thereon into the Collection Account for the Distribution
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Date occurring in the month in which such repurchase is to be
effected. The payment shall be made in the manner specified in
Section 4.3, and shall be distributed pursuant to Section 4.5.
Upon such payment the Seller shall succeed to and own all
interests in and to the Trust and the Trust Property.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.1. AMENDMENT. (a) This Agreement may be
amended by the Seller, the Servicer and the Trustee, without the
consent of any of the Certificateholders, to cure any ambiguity
or defect, to correct or supplement any provision in this
Agreement or 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; PROVIDED, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Trustee,
materially and adversely affect the interests of any
Certificateholder; PROVIDED FURTHER, that any amendment within
the scope of Section 12.1(b)(i) or (ii) shall be deemed to
materially and adversely affect the interests of the
Certificateholders.
(b) This Agreement may also be amended from time to
time by the Seller, the Servicer and the Trustee, with the
consent of the Holders of Certificates evidencing not less than a
majority of the aggregate outstanding principal balance of the
Class A Certificates and the Class B Certificates taken together
as a single class, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the
Certificateholders; PROVIDED, HOWEVER, that no such amendment
shall (i) 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 on Receivables or
distributions that are required to be made on any Certificate,
without the consent of all adversely affected Certificateholders
or (ii) reduce the percentage of the aggregate outstanding
principal balance of the Certificates, the holders of which are
required to consent to any such amendment, without the consent of
all Certificateholders. Promptly after the execution of any such
amendment or consent, the Trustee shall furnish written
notification of the substance of such amendment or consent to
each Certificateholder.
(c) It shall not be necessary for the consent of
Certificateholders pursuant to Section 12.1(b) to approve the
particular form of any proposed amendment or consent, but it
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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.
(d) Notice of any amendment of this Agreement shall be
sent by the Servicer to the Rating Agencies, at such address as
the Rating Agencies may from time to time specify in writing.
(e) The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement or otherwise.
(f) In connection with any amendment pursuant to this
Section 12.1 the Trustee shall be entitled to receive an Opinion
of Counsel to the effect that such amendment is authorized or
permitted by the Agreement.
SECTION 12.2. PROTECTION OF TITLE TO TRUST. (a) The
Servicer shall cause to be executed and filed such financing
statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the
interest of the Certificateholders and the Trustee under this
Agreement in the Trust Property 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. In the event that the Servicer fails to perform its
obligations under this subsection, the Trustee may (but shall not
be obligated to) do so, at the expense of the Servicer.
(b) Neither the Seller nor the Servicer shall (nor
shall the Bank permit Valley National to) change its name,
identity or corporate structure in any manner that would, could
or might make any financing statement or continuation statement
filed by the Servicer in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of
the UCC, unless it shall have given the Trustee at least five
days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of the Seller and the Servicer shall have an
obligation to give the Trustee at least 60 days' prior written
notice of any relocation of its principal executive office if, as
a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing
statement and shall promptly file any such amendment. The
Servicer shall at all times maintain each office from which it
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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 (and, with respect to the
Valley National Receivables, shall cause Valley National to)
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 and Subservicer's respective master computer records
(including any backup archives) that refer to a Receivable shall
indicate clearly 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 Seller's and the Servicer's
computer systems when, and only when, the Receivable shall be
paid or shall become a Purchased Receivable.
(f) If at any time the Seller or the Servicer shall
propose to sell, grant a security interest in or otherwise
transfer any interest in automobile receivables to any
prospective purchaser, lender or other transferee, the Servicer,
shall give or cause to be given to such prospective purchaser,
lender or other transferee computer tapes, records or printouts
(including any restored from backup archives) that, if they shall
refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned by the
Trust.
(g) The Servicer shall permit the Trustee and its
agents at any time during normal business hours to inspect, audit
and make copies of and abstracts from the Servicer's or any
subservicer's records regarding any Receivable.
(h) Upon request at any time the Trustee shall have
reasonable grounds to believe that such request is necessary in
connection with the performance of its duties under this
Agreement, the Servicer shall furnish to the Trustee, within five
Business Days, 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 and to
each of the Servicer's Certificates furnished before such request
indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Trustee promptly
after the execution and delivery of this Agreement and of each
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amendment thereto, an Opinion of Counsel either (A) stating that,
in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of 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) The Seller shall, to the extent required by
applicable law, cause the Certificates to be registered with the
Commission pursuant to Section 12(b) or Section 12(g) of the
Exchange Act within the time periods specified in such sections.
SECTION 12.3. LIMITATION ON RIGHTS OF
CERTIFICATEHOLDERS. (a) The death or incapacity of any
Certificateholder shall not operate to terminate this Agreement
or the Trust, or 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, or otherwise affect the rights,
obligations and liabilities of the parties to this Agreement or
any of them.
(b) No Certificateholder shall have any right to vote
(except as expressly provided herein) 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 party by
reason of any action taken pursuant to any provision of this
Agreement.
(c) No Certificateholder shall have any right by
virtue or by availing itself of any provisions of this Agreement
to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written
notice of default and of the continuance thereof, as hereinbefore
provided, and unless the Holders of the Certificates evidencing
not less than a majority of the aggregate outstanding principal
balance of the Class A Certificates and the Class B Certificates
taken together as a single class shall have made written request
upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee under the Agreement and shall have
offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 30 days after
its receipt of such notice, request, and offer of indemnity,
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shall have 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 Class A Certificateholders or Class B
Certificateholders, as the case may be. For the protection and
enforcement of the provisions of this Section 12.3, each
Certificateholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
SECTION 12.4. GOVERNING LAW. THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER
THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 12.5. NOTICES. All demands, notices and
communications upon or to the Seller, the Servicer, the Trustee
or the Rating Agencies under this Agreement shall be in writing,
personally delivered, sent by overnight courier or mailed by
certified mail, return receipt requested, (or in the form of
telex or facsimile notice, followed by written notice delivered
as aforesaid) and shall be deemed to have been duly given upon
receipt (a) in the case of the Seller to Banc One ABS
Corporation, 100 East Broad Street, Columbus, Ohio 43271-0158,
(b) in the case of the Servicer, to Bank One, Arizona, NA, 241 N.
Central Avenue, Phoenix, Arizona 85001, Attention:
_______________________, facsimile ____________ (c) in the case
of the Trustee, at the Corporate Trust Office, facsimile
____________ (d) in the case of Moody's, to Moody's Investors
Service, Inc., to 99 Church Street, New York, New York 10004,
Attention of Asset Backed Securities Group, facsimile 212-553-0573
and (e) in the case of Standard & Poor's, to Standard &
Poor's Corporation, 26 Broadway (15th Floor), New York, New York
10004, Attention of Asset Backed Surveillance Department,
facsimile 212-208-0098; or, as to each of the foregoing, at such
other address as shall be designated by written notice to the
other parties.
SECTION 12.6. SEVERABILITY OF PROVISIONS. If any one
or more of the covenants, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such
covenants, provisions or terms shall be deemed severable from the
remaining covenants, 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.
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SECTION 12.7. ASSIGNMENT. Notwithstanding anything to
the contrary contained herein, except as provided in Sections
7.4, 8.3 and 8.5, this Agreement may not be assigned by the
Seller or the Servicer. This Agreement may not be assigned by
the Trustee except as provided by Sections 10.10 through 10.13
hereof.
SECTION 12.8. 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 6.1, each Certificate shall be deemed
fully paid.
SECTION 12.9. INTENTION OF PARTIES. (a) The
execution and delivery of this Agreement shall constitute an
acknowledgment by the Seller and the Trustee, on behalf of the
Certificateholders, that it is intended that the assignment and
transfer herein contemplated constitute a sale and assignment
outright, and not for security, of the Receivables and the other
Trust Property, conveying good title thereto free and clear of
any liens, from the Seller to the Trustee, and that the
Receivables and the other Trust Property shall not be a part of
the estate of the Seller in the event of the insolvency,
receivership, conservatorship or the occurrence of another
similar event, of, or with respect to, the Seller. In the event
that such conveyance is determined to be made as security for a
loan made by the Trustee or the Certificateholders to the Seller,
the parties intend that the Seller shall have granted to the
Trustee a security interest in all of the Seller's right, title
and interest in and to the Trust Property conveyed to the Trustee
pursuant to Section 2.1 in order to secure the obligations under
the Certificates, and that this Agreement shall constitute a
security agreement under applicable law.
(b) The execution and delivery of this Agreement shall
constitute an acknowledgment by the Seller and the Trustee on
behalf of the Certificateholders that they intend that the Trust
be classified (for Federal tax purposes) as a grantor trust under
Subpart E, Part I of Subchapter J of the Code of which the
Certificateholders are owners, rather than as an association
taxable as a corporation. The powers granted and obligations
undertaken in this Agreement shall be construed so as to further
such intent.
SECTION 12.10. COUNTERPARTS. This Agreement may be
executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but
all such counterparts shall together constitute but one and the
same instrument.
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SECTION 12.11. COLLATERAL AGENT PROTECTION.
Notwithstanding anything contained herein to the contrary, the
Collateral Agent shall have the same rights and protection
afforded to the Trustee hereunder.
SECTION 12.12. LIMITATION OF LIABILITY OF TRUSTEE AND
COLLATERAL AGENT. Notwithstanding anything contained herein to
the contrary (i) this Agreement has been accepted by Bankers
Trust Company not in its individual capacity but solely as
Trustee and as Collateral Agent with respect to the Reserve Fund
and in no event shall Bankers Trust Company have any liability
for the representations, warranties, covenants, agreements or
other obligations of the Seller hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as
to all of which recourse shall be had solely to the assets of the
Seller and (ii) under no circumstances shall Bankers Trust
Company be liable for the payment of any indebtedness or expenses
of the Trust; PROVIDED, HOWEVER, nothing contained herein shall
relieve Bankers Trust Company of its obligations contained herein
in its capacity as successor Servicer, as Trustee and as
Collateral Agent.
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IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above
written.
BANC ONE ABS CORPORATION
as Seller
By:____________________________
Name:
Title:
BANK ONE, ARIZONA, NA
as Servicer
By:____________________________
Name:
Title:
BANKERS TRUST COMPANY, not in its
individual capacity but solely as
Trustee
By:_______________________________
Name:
Title:
BANKERS TRUST COMPANY, not in its
individual capacity but solely as
Collateral Agent
By:_______________________________
Name:
Title:
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SCHEDULE A
SCHEDULE OF RECEIVABLES
(delivered to the Trustee at Closing)
SCHEDULE B
LOCATION OF RECEIVABLES
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 ("DTC"), TO THE TRUSTEE 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 DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), 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.]
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE
AT ANY TIME MAY BE LESS THAN THE AMOUNT BALANCE ON THE FACE HEREOF.
NUMBER A- $_______________ (of
CUSIP NO. __________ $______________ issued)
BANC ONE AUTO GRANTOR TRUST 1996-B
CLASS A ____% ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of motor vehicle
retail installment sale contracts secured by new or used
automobiles, vans or light duty trucks.
(This Certificate does not represent an interest in or obligation
of Banc One ABS Corporation, Bank One, Arizona NA, the Trustee or
any of their respective affiliates, except to the extent described
below.)
A-1
THIS CERTIFIES THAT _________________ is the registered owner
of a $____________________ nonassessable, fully-paid, fractional
undivided interest in Banc One Auto Grantor Trust 1996-B (the
"Trust") formed pursuant to the Pooling and Servicing Agreement
(the "Agreement") dated as of June 1, 1996 among Banc One ABS
Corporation, as seller (the "Seller") Bank One, Arizona, NA, as
servicer (the "Servicer") and Bankers Trust Company, a New York
banking corporation, as Trustee and Collateral Agent, a summary of
certain of the pertinent provisions of which is set forth below.
To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Agreement.
This Certificate is one of the duly authorized Certificates,
designated as the Class A ____% Asset Backed Certificates (herein
called the "Class A Certificates"), issued under the Agreement.
Also issued under the Agreement are Certificates designated as the
Class B ____% Asset Backed Certificates (the "Class B
Certificates"). The Class A Certificates and the Class B
Certificates are hereinafter collectively called the
"Certificates." The aggregate beneficial ownership interests in
the Trust evidenced by all Class A Certificates is ____%. This
Class A Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement to which Agreement
reference is hereby made for a statement of the respective rights
and obligations thereunder of the Seller, the Servicer, the Trustee
and Holders of the Class A Certificates.
The property of the Trust includes a pool of simple interest
motor vehicle retail installment sale contracts for new or used
automobiles, vans or light duty trucks (collectively, the
"Receivables"), all monies received under the Receivables on or
after the related Cutoff Date, security interests in the vehicles
financed thereby, certain bank accounts, the rights to proceeds
from certain insurance proceeds, the rights of the Trust under the
Agreement, the right to receive certain payments from funds
deposited in the Reserve Fund and all proceeds of the foregoing.
Under the Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next
Business Day (each, a "Distribution Date"), commencing on July 15,
1996, to the Person in whose name this Certificate is registered at
the close of business on the last day of the calendar month
preceding such Distribution Date (the "Record Date"), such
Certificateholder's fractional undivided interest in the amount to
be distributed to Certificateholders on such Distribution Date.
It is the intent of the Seller, the Trustee and the
Certificateholders that the Trust be classified (for Federal tax
purposes) as a grantor trust under Subpart E, Part I of Subchapter
J of the Code of which the Class A Certificateholders are owners,
rather than as an association taxable as a corporation. The
Seller, the Servicer, the Trustee and the Certificateholders, by
A-2
acceptance of a Class A Certificate, agree to treat, and to take no
action inconsistent with the treatment of, the Certificates for
such tax purposes as interests in a grantor trust.
Distributions on this Certificate will be made as provided in
the Agreement by the Trustee 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 with respect to Certificates
registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Except as
otherwise provided in the Agreement and notwithstanding the above,
the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the office
or agency maintained for that purpose by the Trustee in the Borough
of Manhattan, the City of New York.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Trustee, by manual
signature, this Certificate shall not entitle the Holder hereof to
any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Certificate to be
duly executed.
Date:
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: ______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
Date:
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: ______________________________
Authorized Signatory
A-4
(REVERSE OF CLASS A CERTIFICATE)
The Class A Certificates do not represent an obligation of, or
an interest in, any of the Seller, the Servicer, the Trustee or any
affiliates of any of them, and no recourse may be had against such
parties or their assets except as expressly set forth or
contemplated herein or in the Agreement. In addition, this
Certificate is limited in right of payment to certain collections
and recoveries with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the
Agreement. A copy of the Agreement may be examined by any
Certificateholder upon written request during normal business hours
at the principal office of the Seller and at such other places, if
any, designated by the Seller.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights
and obligations of the Seller, the Servicer and the Trustee and the
rights of the Certificateholders at any time by the Seller, the
Servicer and the Trustee with the consent of the Holders of
Certificates evidencing not less than a majority of the aggregate
outstanding principal balance of the Class A Certificates and the
Class B Certificates taken together as a single class. Any such
consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and on all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof, whether or not notation
of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances,
without the consent of the Holders of any Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the offices or agencies
maintained by the Trustee in the Borough of Manhattan, The City of
New York, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and duly executed by the Holder hereof
or such Holder's attorney duly authorized in writing, 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.
Except as provided in the Agreement, the Class A Certificates
are issuable only as registered certificates without coupons in
minimum denominations of $1,000 and integral multiples thereof;
PROVIDED, HOWEVER, that one Class A Certificate may be issued in a
denomination that represents any remaining portion of the Original
Class A Principal Balance. As provided in the Agreement and
subject to certain limitations therein set forth, Class A
Certificates are exchangeable for new Class A Certificates of
A-5
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 Trustee may require payment of a sum
sufficient to cover any tax or governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Trustee or any such agent shall
be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held
by the Trust. The Seller of the Receivables 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 Certificates;
however, such right of purchase is exercisable only on a
Distribution Date during a Collection Period subsequent to a
Collection Period in which the Pool Balance is 5% or less of the
Original Pool Balance as of the first day of such Collection
Period.
A-6
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 type name and address, including
postal zip code, of assignee)
________________________________________________________________________________
the within Class A Certificate, and all rights
thereunder, hereby irrevocably constituting and appointing
____________________________ to transfer said Class A Certificate
on the books of the Trustee, with full power of substitution in the
premises.
Dated:
___________________________________________*/
Medallion:
____________________________*/
_______________________
*/ NOTICE: The signature to this assignment must correspond with
the name of the registered owner as it appears upon the face of the
within Class A Certificate in every particular, without alteration,
enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the
requirements of the Trustee, which requirements include membership
or participation in STAMP or such other "signature guarantee
program" as may be determined by the Trustee in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
A-7
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 ("DTC"), TO THE TRUSTEE 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 DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), 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.]
THIS CERTIFICATE MAY NOT BE DIRECTLY OR INDIRECTLY SOLD OR
TRANSFERRED TO, OR PURCHASED OR ACQUIRED BY, OR ON BEHALF OF
(1) ANY EMPLOYEE BENEFIT PLAN, RETIREMENT ARRANGEMENT, INDIVIDUAL
RETIREMENT ACCOUNT OR KEOGH PLAN WHICH IS SUBJECT TO EITHER TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (EACH, A "PLAN"), OR (2) ANY ENTITY WHOSE SOURCE OF FUNDS
TO BE USED FOR THE PURCHASE OF THIS CLASS B CERTIFICATE INCLUDES
THE ASSETS OF ANY SUCH PLAN, OTHER THAN AN "INSURANCE COMPANY
GENERAL ACCOUNT" AS DEFINED IN, AND WHICH COMPLIES WITH THE
PROVISIONS OF, PROHIBITED TRANSACTION EXEMPTION 95-60.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE
AT ANY TIME MAY BE LESS THAN THE AMOUNT BALANCE ON THE FACE HEREOF.
NUMBER B- $_______________ (of
CUSIP NO. __________ $_____________ issued)
BANC ONE AUTO GRANTOR TRUST 1996-B
CLASS B ____% ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of motor vehicle
retail installment sale contracts secured by new or used
automobiles, vans or light duty trucks.
(This Certificate does not represent an interest in or obligation
of Banc One ABS Corporation, Bank One, Arizona NA, the Trustee or
any of their respective affiliates, except to the extent described
below.)
B-1
THIS CERTIFIES THAT _________________ is the registered owner
of a $____________________ nonassessable, fully-paid, fractional
undivided interest in Banc One Auto Grantor Trust 1996-B (the
"Trust") formed pursuant to the Pooling and Servicing Agreement
(the "Agreement") dated as of June 1, 1996 among Banc One ABS
Corporation, as seller (the "Seller"), Bank One, Arizona, NA, as
servicer (the "Servicer") and Bankers Trust Company, a New York
banking corporation, as Trustee and Collateral Agent, a summary of
certain of the pertinent provisions of which is set forth below.
To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Agreement.
This Certificate is one of the duly authorized Certificates,
designated as the Class B ____% Asset Backed Certificates (herein
called the "Class B Certificates"), issued under the Agreement.
Also issued under the Agreement are Certificates designated as the
Class A ____% Asset Backed Certificates (the "Class A
Certificates"). The Class A Certificates and the Class B
Certificates are hereinafter collectively called the
"Certificates." The aggregate beneficial ownership interests in
the Trust evidenced by all Class B Certificates is ___%. This
Class B Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement to which Agreement
reference is hereby made for a statement of the respective rights
and obligations thereunder of the Seller, the Servicer, the Trustee
and Holders of the Class B Certificates.
The property of the Trust includes a pool of simple interest
motor vehicle retail installment sale contracts for new or used
automobiles, vans or light duty trucks (collectively, the
"Receivables"), all monies received under the Receivables on or
after the Cutoff Date, security interests in the vehicles financed
thereby, certain bank accounts, the rights to proceeds from certain
insurance proceeds, the rights of the Trust under the Agreement,
the right to receive certain payments from funds deposited in the
Reserve Fund and all proceeds of the foregoing.
Under the Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next
Business Day (each, a "Distribution Date"), commencing on July 15,
1996, to the Person in whose name this Certificate is registered at
the close of business on the last day of the calendar month
preceding such Distribution Date (the "Record Date"), such
Certificateholder's fractional undivided interest in the amount to
be distributed to Certificateholders on such Distribution Date.
It is the intent of the Seller, the Trustee and the
Certificateholders that the Trust be classified (for Federal tax
purposes) as a grantor trust under Subpart E, Part I of Subchapter
J of the Code of which the Class B Certificateholders are owners,
rather than as an association taxable as a corporation. The
Seller, the Servicer, the Trustee and the Certificateholders, by
B-2
acceptance of a Class B Certificate, agree to treat, and to take no
action inconsistent with the treatment of, the Certificates for
such tax purposes as interests in a grantor trust.
Distributions on this Certificate will be made as provided in
the Agreement by the Trustee 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 with respect to Certificates
registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Except as
otherwise provided in the Agreement and notwithstanding the above,
the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the office
or agency maintained for that purpose by the Trustee in the Borough
of Manhattan, the City of New York.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Trustee, by manual
signature, this Certificate shall not entitle the Holder hereof to
any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
B-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Certificate to be
duly executed.
Date:
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: ______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
Date:
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: ______________________________
Authorized Signatory
B-4
(REVERSE OF CLASS B CERTIFICATE)
The Class B Certificates do not represent an obligation of, or
an interest in, any of the Seller, the Servicer, the Trustee or any
affiliates of any of them, and no recourse may be had against such
parties or their assets except as expressly set forth or
contemplated herein or in the Agreement. In addition, this
Certificate is limited in right of payment to certain collections
and recoveries with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the
Agreement. A copy of the Agreement may be examined by any
Certificateholder upon written request during normal business hours
at the principal office of the Seller and at such other places, if
any, designated by the Seller.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights
and obligations of the Seller, the Servicer and the Trustee and the
rights of the Certificateholders at any time by the Seller, the
Servicer and the Trustee with the consent of the Holders of
Certificates evidencing not less than a majority of the aggregate
outstanding principal balance of the Class A Certificates and the
Class B Certificates taken together as a single class. Any such
consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and on all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof, whether or not notation
of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances,
without the consent of the Holders of any Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the offices or agencies
maintained by the Trustee in the Borough of Manhattan, The City of
New York, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and duly executed by the Holder hereof
or such Holder's attorney duly authorized in writing, 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.
Except as provided in the Agreement, the Class B Certificates
are issuable only as registered certificates without coupons in
minimum denominations of $1,000 and integral multiples thereof;
PROVIDED, HOWEVER, that one Class B Certificate may be issued in a
denomination that represents any remaining portion of the Original
Class B Principal Balance. As provided in the Agreement and
subject to certain limitations therein set forth, Class B
Certificates are exchangeable for new Class B Certificates of
B-5
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 Trustee may require payment of a sum
sufficient to cover any tax or governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Trustee or any such agent shall
be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held
by the Trust. The Seller of the Receivables 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 Certificates;
however, such right of purchase is exercisable only on a
Distribution Date during a Collection Period subsequent to a
Collection Period in which the Pool Balance is 5% or less of the
Original Pool Balance as of the first day of such Collection
Period.
[By accepting and holding this Class B Certificate, the Holder
hereof shall be deemed to have represented and warranted that it is
it is not acquiring Class B Certificates, directly or indirectly,
for or on behalf of an ERISA Entity other than an "insurance
company general account" as defined in, and which complies with the
provisions of, Prohibited Transaction Exemption 95-60.]
[The transferee hereof of this Class B Definitive Certificate
will represent that it is not either (1) an employee benefit plan,
retirement arrangement, individual retirement account or keogh plan
which is subject to either Title I of ERISA, or Section 4975 of the
Code, or (2) any entity whose source of funds to be used for the
purchase of the Class B Certificate includes the assets of any such
Plan, other than an "Insurance Company General Account" as defined
in, and which complies with the provisions of, Prohibited
Transaction Exemption 95-60 issued by the United States Department
of Labor.]
B-6
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 type name and address, including
postal zip code, of assignee)
________________________________________________________________________________
the within Class B Certificate, and all rights
thereunder, hereby irrevocably constituting and appointing
____________________________ to transfer said Class B Certificate
on the books of the Trustee, with full power of substitution in the
premises.
Dated:
___________________________________________*/
Medallion:
____________________________*/
_______________________
*/ NOTICE: The signature to this assignment must correspond with
the name of the registered owner as it appears upon the face of the
within Class B Certificate in every particular, without alteration,
enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the
requirements of the Trustee, which requirements include membership
or participation in STAMP or such other "signature guarantee
program" as may be determined by the Trustee in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
B-7
EXHIBIT E
FORM OF BENEFIT PLAN AFFIDAVIT
Bankers Trust Company
4 Albany Street
New York, New York 10006
Bank One, Arizona, NA
201 N. Central Avenue
Phoenix, Arizona 85001
STATE OF ___________)
ss:
COUNTY OF __________)
Under penalties of perjury, I, the undersigned, declare
that, to the best of my knowledge and belief, the following
representations are true, correct, and complete.
1. That I am a duly authorized officer of _____________
(the "PURCHASER"), whose taxpayer identification number is
_________, and on behalf of which I have the authority to make this
affidavit.
2. That the Purchaser is acquiring a Class B
Certificate (the "CERTIFICATE") representing an interest in the
Trust.
3. That the Purchaser is not either (1) an employee
benefit plan, retirement arrangement, individual retirement account
or keogh plan which is subject to either Title I of ERISA, or
Section 4975 of the Code, or (2) any entity whose source of funds
to be used for the purchase of the Class B Certificate includes the
assets of any such Plan, other than an "Insurance Company General
Account" as defined in, and which complies with the provisions of,
Prohibited Transaction Exemption 95-60 issued by the United States
Department of Labor.
Capitalized terms used in and not otherwise defined
herein shall have the meaning assigned to them in the Pooling and
Servicing Agreement dated as of June 1, 1996 among Banc One ABS
Corporation, as seller, Bank One, Arizona, NA, as servicer and
Bankers Trust Company, as trustee.
E-1
IN WITNESS WHEREOF, the Purchaser has caused this
instrument to be duly executed on its behalf, by its duly
authorized officer this ____ day of ___________, 19__.
___________________________________
By:________________________________
Its:_______________________________
Personally appeared before me ____________, known or
proved to me to be the same person who executed the foregoing
instrument and to be a ________________ of the Purchaser, and
acknowledged to me that he or she executed the same as his or her
free act and deed and as the free act and deed of the Purchaser.
Subscribed and sworn before me
this ____ day of ____________, 19__
_________________________________________
Notary Public
My commission expires the ____ day
of ___________________, 19__.
E-2