WESTERN FIDELITY FINANCE, INC.,
Depositor
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of December 30, 1996
$24,550,000
WESTERN FIDELITY RECEIVABLES TRUST 1996-A
PASS-THROUGH CERTIFICATES
(Western Fidelity Automobile Receivables Program)
Class A Certificates, Class B Certificates, Class C Certificates
and Class D Certificates
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
Section 1.01. General Definitions......................................... 1
Section 1.02. Calculations................................................ 25
ARTICLE II
CONVEYANCE; THE CERTIFICATES; RECONVEYANCE
Section 2.01. Conveyance and Acceptance by Trustee........................ 26
Section 2.02. General..................................................... 28
Section 2.03. Forms of Certificates....................................... 29
Section 2.04. Distributions to Certificateholders......................... 30
Section 2.05. Execution, Authentication, Delivery and Dating.............. 30
Section 2.06. Temporary Certificates...................................... 31
Section 2.07. Registration, Registration of Transfer and Exchange......... 32
Section 2.08. Mutilated, Destroyed, Lost or Stolen Certificates........... 34
Section 2.09. Persons Deemed Certificateholders........................... 35
Section 2.10. Cancellation of Certificates................................ 35
Section 2.11. Conditions to Closing....................................... 35
Section 2.12. Book-Entry Certificates..................................... 37
Section 2.13. Definitive Certificates..................................... 39
Section 2.14. Reconveyance................................................ 39
Section 2.15. Reconveyance of Nonconforming Trust Property................ 39
Section 2.16. Funding Events.............................................. 40
Section 2.17. Grantor Trust Provisions.................................... 43
ARTICLE III
COVENANTS; TRUST PROPERTY; REPRESENTATIONS; WARRANTIES
Section 3.01. Performance of Obligations.................................. 43
Section 3.02. Negative Covenants.......................................... 44
Section 3.03. Money for Certificate Distributions......................... 45
Section 3.04. Restriction of Depositor Activities......................... 47
Section 3.05. Protection of Trust Property................................ 48
Section 3.06. Opinions as to Trust Property............................... 50
i
ection 3.07. Statement as to Compliance.................................. 50
Section 3.08. Limitations on Liens........................................ 50
Section 3.09. Recording................................................... 50
Section 3.10. Agreements Not to Institute Bankruptcy Proceedings; Additional
Covenants................................................... 51
Section 3.11. Providing of Notice......................................... 54
Section 3.12. Representations and Warranties of the Depositor............. 54
Section 3.13. Representations and Warranties of the Trustee............... 57
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 4.01. Servicing Agreement......................................... 58
ARTICLE V
ACCOUNTS, COLLECTIONS, DISTRIBUTIONS OF INTEREST
AND PRINCIPAL, RELEASES, RESERVE FUND,
AND STATEMENTS TO CERTIFICATEHOLDERS
Section 5.01. Accounts.................................................... 59
Section 5.02. Collections................................................. 60
Section 5.03. Application of Collections.................................. 60
Section 5.04. Collection Account.......................................... 60
Section 5.05. Deposit of Funds in and Transfer of Funds from the
Revenue Fund................................................ 61
Section 5.06. Issuance Fund............................................... 64
Section 5.07. Reserve Fund................................................ 65
Section 5.07A. Capitalized Interest Account................................ 67
Section 5.08. Use of Moneys in the Expense Account........................ 69
Section 5.09. Use of Moneys in the Residual Interest Account.............. 69
Section 5.10. Pre-Funding Account......................................... 70
Section 5.11. Certificate Distributions................................... 70
Section 5.12. Use of Moneys in the Reserve Fund........................... 71
Section 5.13. Statements to Certificateholders; Tax Returns............... 72
Section 5.14. Reports by Trustee.......................................... 72
Section 5.15. Final Balances.............................................. 72
Section 5.16. Financial Statements........................................ 73
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ARTICLE VI
OPTIONAL PURCHASE OF RECEIVABLES............................................. 74
ARTICLE VII
THE TRUSTEE
Section 7.01. Duties of Trustee........................................... 74
Section 7.02. Notice of Event of Insolvency or Event of Servicing Default. 77
Section 7.03. Rights of Trustee........................................... 77
Section 7.04. Not Responsible for Recitals, Issuance of Certificates or
Application of Moneys as Directed........................... 78
Section 7.05. May Hold Certificates....................................... 78
Section 7.06. Money Held in Trust......................................... 78
Section 7.07. Compensation and Reimbursement.............................. 78
Section 7.08. Eligibility; Disqualification. ............................. 80
Section 7.09. Trustee's Capital and Surplus. ............................. 80
Section 7.10. Resignation and Removal; Appointment of Successor........... 80
Section 7.11. Acceptance of Appointment by Successor...................... 82
Section 7.12. Merger, Conversion, Consolidation or Succession to Business of
Trustee..................................................... 82
Section 7.13. Co-trustees and Separate Trustees........................... 83
Section 7.14. Books and Records. ......................................... 84
Section 7.15. Control by Certificateholders. ............................. 84
Section 7.16. Suits for Enforcement. ..................................... 84
Section 7.17. Certificateholder Characterization.......................... 85
Section 7.18. Documents Held by the Trustee as Custodian; Indication of
Depositor Ownership; Inspection and Release of
Custodian Files............................................. 85
ARTICLE VIII
EVENT OF INSOLVENCY
Section 8.01. Event of Insolvency......................................... 87
Section 8.02. Trustee May File Proofs of Claim. .......................... 88
Section 8.03. Trustee May Enforce Claim Without Possession of
Certificates. .............................................. 88
Section 8.04. Knowledge of Trustee........................................ 89
ARTICLE IX
[RESERVED]................................................................... 89
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ARTICLE X
SUPPLEMENTAL AGREEMENTS
Section 10.01. Supplemental Agreements Without Certificateholder Approval.. 89
Section 10.02. Supplemental Agreements With Consent of Certificateholders.. 90
Section 10.03. Supplemental Agreements Without Consent of
Certificateholders.......................................... 91
Section 10.04. Execution of Supplemental Agreements. ...................... 91
Section 10.05. Effect of Supplemental Agreements. ......................... 92
Section 10.06. Reference in Certificates to Supplemental Agreements. ...... 92
Section 10.07. Trustee To Act on Instructions. ............................ 92
ARTICLE XI
[RESERVED]................................................................... 92
ARTICLE XII
MISCELLANEOUS
Section 12.01. Compliance Certificates and Opinions; Furnishing of
Information................................................. 92
Section 12.02. Form of Documents Delivered to Trustee...................... 93
Section 12.03. Acts of Certificateholders.................................. 94
Section 12.04. Notices, Etc. to Trustee and Depositor...................... 95
Section 12.05. Notices and Reports to Certificateholders; Waiver of
Notices..................................................... 96
Section 12.06. Rules by Trustee. .......................................... 96
Section 12.07. Depositor Obligation. ...................................... 96
Section 12.08. Enforcement of Benefits. ................................... 97
Section 12.09. Effect of Headings and Table of Contents. .................. 97
Section 12.10. Successors and Assigns. .................................... 97
Section 12.11. Separability. .............................................. 97
Section 12.12. Benefits of Agreement. ..................................... 97
Section 12.13. Legal Holidays. ............................................ 97
Section 12.14. Governing Law. ............................................. 97
Section 12.15. Counterparts. .............................................. 98
Section 12.16. Recording of Agreement. .................................... 98
Section 12.17. Further Assurances. ........................................ 98
Section 12.18. No Bankruptcy Petition Against the Depositor................ 98
Section 12.19. Force Majeure............................................... 98
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ARTICLE XIII
TERMINATION
Section 13.01. Termination of the Trust.................................... 98
Section 13.02. Notice......................................................100
EXHIBIT A- Form of Class A Certificate.................................A-1
EXHIBIT B- Form of Class B Certificate.................................B-1
EXHIBIT C- Form of Class C Certificate.................................C-1
EXHIBIT D- Form of Class D Certificate.................................D-1
EXHIBIT E- Form of Transferee Agreement................................E-1
EXHIBIT F- Notice of Funding...........................................F-1
EXHIBIT G- Officer's Certificate.......................................G-1
EXHIBIT H-1- Form of Receivables Characteristics (Closing Date)........H-1-1
EXHIBIT H-2- Form of Receivables Characteristics (Funding Date)........H-2-1
EXHIBIT I- Form of Assignment..........................................I-1
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This POOLING AND SERVICING AGREEMENT is dated and made as of December 30,
1996, between Western Fidelity Finance, Inc., a Delaware corporation, as
depositor (the "Depositor"), and Texas Commerce Bank National Association, a
national banking association, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has duly authorized the execution and delivery of this
Agreement to provide for the issuance of four Classes of Pass-Through
Certificates designated as Class A Certificates, Class B Certificates, Class C
Certificates and Class D Certificates, under and pursuant to the terms of this
Agreement. All covenants and agreements made by the Depositor herein are for the
equal and ratable benefit and security of the holders of the Class A
Certificates, the Class B Certificates, the Class C Certificates and the Class D
Certificates. The Depositor is entering into this Agreement, and the Trustee is
accepting the trusts created hereby, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged. Simultaneously with
the issuance of the Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D Certificates, the Trust is also issuing the
Residual Interest.
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions. Except as otherwise specified or as the
context may otherwise require, the following terms have the respective meanings
set forth below for all purposes of this Agreement, and the definitions of such
terms are applicable to the singular as well as to the plural forms of such
terms and to the masculine as well as to the feminine and neuter genders of such
terms.
"Accelerated Reserve Fund Event" means the occurrence and continuance, as
determined by the Supervisory Servicer with written notice to the Depositor and
the Trustee, of one or more of the following events:
(a) as of the Determination Date with respect to each of the three
most recent consecutive Collection Periods, the average for each such
period of the Aggregate Receivable Balance of Receivables included in the
Trust Property for which the Scheduled Payments are 60 days or more past
due for each such period divided by the Aggregate Receivable Balance with
respect to such Collection Period is equal to or greater than 6.5%;
provided, that an Accelerated Reserve Fund Event occurring pursuant to this
clause (a) shall be deemed to have been cured if, as of the Determination
Date with respect to each of any three consecutive Collection Periods
following the occurrence of an Acceleration Reserve Fund Event pursuant to
this clause (a), the average for each such period of Aggregate Receivable
Balance of Receivables included in the Trust Property for which the
Scheduled Payments are 60 days or more past due for each such Collection
Period is less than 6.5%; or
(b) as of the Determination Date with respect to each of the three
most recent consecutive Collection Periods, the average for each such
period of the Aggregate Receivable Balance of Receivables included in the
Trust Property for which the Scheduled Payments are 60 days or more past
due for each such period divided by the Aggregate Receivable Balance with
respect to such Collection Period is equal to or greater than 9.0%;
provided, that an Acceleration Reserve Event occurring pursuant to this
clause (b) shall not be deemed to have been cured under any circumstances
and, until the Aggregate Current Stated Principal Balance of the
Certificates of each Class has been reduced to zero, all amounts otherwise
available for distribution to the Depositor pursuant to Section 5.05(c)
clause Fifteenth shall be deposited to the Reserve Fund on each
Distribution Date thereafter; or
(c) as of the Determination Date with respect to each of the three
most recent consecutive Collection Periods, the average for each such
period of the Realized Losses (annualized) with respect to Defaulted
Receivables for each such period divided by the Aggregate Receivable
Balance with respect to such Collection Period is greater than 10.00%; or
(d) as of the Determination Date with respect to the current
Collection Period, the Realized Losses (annualized) with respect to
Defaulted Receivables are greater than 12.00% of the Aggregate Receivable
Balance with respect to such Determination Date.
"Accountant's Report" means a report prepared by a firm of Independent
Public Accountants:
(a) with respect to the Closing Date, indicating that such firm has
reviewed, at random, the Custodian File for at least 150 Initial
Receivables and that at least 90% of such Custodian Files are complete;
provided, that if such review does not indicate that at least 90% of such
Custodian Files are complete, such firm shall continue reviewing, at
random, the Custodian File for at least 150 additional Initial Receivables
until such additional review or reviews indicates such percentage of
Initial Receivables reviewed is complete;
(b) with respect to each Funding Date, indicating that such firm has
reviewed the Receivables Characteristics report substantially in the form
of Exhibit H-2 hereto with respect to the acquisition of Subsequent
Receivables on such Funding Date and confirming that such acquisition did
or did not (i) reduce the weighted average annual percentage rate of the
Receivables Pool to less than 20.00% or (ii) increase the weighted average
remaining term to maturity of the Receivables Pool to greater than 60
months;
2
(c) with respect to each calendar month or portion thereof during the
Funding Period, indicating (i) that such firm has reviewed the related
files and confirming whether each Subsequent Receivable conveyed to the
Trustee, on behalf of the Trust for the benefit of the Holders of the
Certificates, during such portion of the Funding Period was funded by the
Seller prior to or during the month of December 1996 and (ii) that such
firm has reviewed, at random, the related files with respect to 15% of the
Subsequent Receivables acquired during such portion of the Funding Period
and that at least 90% of such Subsequent Receivables conform to the
criteria set forth in the agreed-upon procedures letter between such firm
and the Seller with respect to underwriting and proof that the Obligor
obtained appropriate insurance on the related Financed Vehicle; provided,
that if such review does not indicate that at least 90% of such Subsequent
Receivables conform to such criteria, such firm shall continue reviewing,
at random, the related files with respect to an additional 15% of
Subsequent Receivables acquired during such portion of the Funding Period
until such additional review or reviews indicates such percentage of such
Subsequent Receivables conform to the specified criteria; and
(d) with respect to the final Funding Date, indicating that such firm
has reviewed 100% of the Subsequent Receivables and identifying each
Subsequent Receivable for which the first Scheduled Payment was not made
prior to the sale of such Subsequent Receivable by the Seller to the
Depositor and the conveyance of such Subsequent Receivable by the Depositor
to the Trustee, in trust, on a Funding Date.
"Accounts" has the meaning specified in Section 5.01 hereof.
"Act" has the meaning specified in Section 12.03 hereof.
"Actual Payment" means, with respect to a Collection Period and a
Receivable, all Scheduled Payments and prepayments received from or on behalf of
an Obligor with respect to such Receivable and deposited into the Collection
Account during such Collection Period. An Actual Payment does not include
Repurchase Prices.
"Administrative Expenses" means the fees and expenses payable to the Rating
Agency and other fees, expenses or administrative costs related to the Trust
Property (other than fees and expenses of the Trustee, the Supervisory Servicer
and the Servicer), payable pursuant to this Agreement or the Servicing
Agreement, as certified by the Servicer.
"Affiliate" of any specified Person means any other Person controlling or
controlled by or under common control with such specified Person. For the
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.
3
"Agent Member" means a member of, or participant in, the Securities
Depository.
"Agreement" or "this Agreement" means this Agreement as of the date hereof,
as supplemented or amended by one or more agreements supplemental hereto entered
into pursuant to the applicable provisions hereof. All references in this
Agreement to designated "Sections," "Subsections" and other subdivisions are to
the designated Sections, Subsections and other subdivisions of this Agreement.
The words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Section, Subsection
or other subdivision.
"Aggregate Current Stated Principal Balance" means, with respect to the
Certificates of any Class, the aggregate of the Current Stated Principal
Balances of all Outstanding Certificates of that Class at the time of
determination.
"Aggregate Receivable Balance" means, with respect to any date of
determination, the sum of the outstanding Receivable Balance of all the
Receivables which are then conveyed from time to time to the Trustee pursuant to
the terms of this Agreement.
"Amount Financed" means, with respect to a Receivable, the contract amount
of the Receivable applied toward the purchase price of the Financed Vehicle and
any related costs, including add-ons, credit life insurance premiums, warranty
costs and taxes.
"Annual Percentage Rate" or "APR" means, with respect to a Receivable, the
annual rate of finance charges stated in the Contract evidencing such
Receivable.
"Authorized Officer" means, with respect to any Person, the Chairman,
Co-Chairman or Vice Chairman of the Board of Directors, the President, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
the Treasurer, any Assistant Treasurer or any other authorized officer of the
Person who is authorized to act for the Person and whose name appears on a list
of such authorized officers furnished by the Person to the Trustee (containing
the specimen signature of such officers), as such list may be amended or
supplemented from time to time.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banking institutions in Denver, Colorado or Houston, Texas, or
in the city in which the principal trust office of the Trustee is located, are
authorized or obligated by law or executive order to be closed.
"Capitalized Interest Account" means the account by that name established
pursuant to Section 5.07A hereof.
"Capitalized Interest Amount" means $150,000.
"Capitalized Interest Property" has the meaning set forth in Section
5.07A(b) hereof.
4
"Certificate" or "Certificates" means the Class A Certificates, the Class B
Certificates, the Class C Certificates and the Class D Certificates, unless the
context otherwise requires. The term "Certificates" specifically does not
include the Residual Interest. Unless the context otherwise requires or a class
designation is specified, a "Certificate" or the "Certificates" refers to all
Classes thereof.
"Certificate Account" means the account by that name established pursuant
to Section 5.01 hereof.
"Certificate Register" and "Certificate Registrar" have the meanings
specified in Section 2.07.
"Certificateholder" means the Person in whose name a Certificate is
registered in the Certificate Register.
"Certificateholder Approval" means, unless expressly provided to the
contrary, the approval or consent by the Certificateholders of not less than
sixty-six and two-thirds percent (66-2/3%) of the Aggregate Current Stated
Principal Balance of the Outstanding Certificates of each Class.
"Class" means all of the Certificates having the same Final Scheduled
Distribution Date, interest rate and priority of distributions, designated as
Class A Certificates, Class B Certificates, Class C Certificates or Class D
Certificates, as the case may be.
"Class A Carryover Interest" means, with respect to any Distribution Date,
the difference, if any, between (a) the aggregate amount of Class A Certificate
Interest due on all prior Distribution Dates and (b) the aggregate amount of
Class A Certificate Interest (from whatever source) actually distributed to
Class A Certificateholders on all prior Distribution Dates, plus interest on any
shortfall in the distribution of interest on a prior Distribution Date at the
Class A Pass-Through Rate from the Distribution Date on which such shortfall
occurred through the Distribution Date of such calculation.
"Class A Certificate Interest" means, (a) with respect to the initial
Distribution Date, the product of (i) 1/360 of the Class A Pass-Through Rate
times (ii) the number of days from the Closing Date through the Determination
Date with respect to the initial Distribution Date times (iii) the Aggregate
Current Stated Principal Balance of the Class A Certificates as of the Closing
Date, and (b) with respect to any subsequent Distribution Date, the product of
(i) one-twelfth of the Class A Pass-Through Rate times (ii) the Aggregate
Current Stated Principal Balance of the Class A Certificates outstanding as of
the Determination Date with respect to such Distribution Date.
"Class A Certificates" means the Class of Pass-through Certificates
designated as Class A Certificates, issued in accordance with the provisions of
this Agreement, and which is substantially in the form of Exhibit A hereto.
5
"Class A Final Scheduled Distribution Date" means March 15, 2002.
"Class A Pass-Through Rate" means 7.50% per annum.
"Class A Percentage" means 80%.
"Class A Principal Carryover Shortfall" means, as of the close of any
Distribution Date, the excess of the Class A Principal Distribution Amount plus
any outstanding Class A Principal Carryover Shortfall from the preceding
Distribution Date over the amount of principal distributed to the holders of the
Class A Certificates on such Distribution Date pursuant to Sections 5.05 and
5.11.
"Class A Principal Distribution Amount" means, with respect to any
Distribution Date, the Class A Percentage of the Principal Distribution Amount.
"Class B Carryover Interest" means, with respect to any Distribution Date,
the difference, if any, between (a) the aggregate amount of Class B Certificate
Interest due on all prior Distribution Dates and (b) the aggregate amount of
Class B Certificate Interest (from whatever source) actually distributed to
Class B Certificateholders on all prior Distribution Dates, plus interest on any
shortfall in the distribution of interest on a prior Distribution Date at the
Class B Pass-Through Rate from the Distribution Date on which such shortfall
occurred through the Distribution Date of such calculation.
"Class B Certificate Interest" means, (a) with respect to the initial
Distribution Date, the product of (i) 1/360 of the Class B Pass-Through Rate
times (ii) the number of days from the Closing Date through the Determination
Date with respect to the initial Distribution Date times (iii) the Aggregate
Current Stated Principal Balance of the Class B Certificates as of the Closing
Date, and (b) with respect to any subsequent Distribution Date, the product of
(i) one-twelfth of the Class B Pass-Through Rate times (ii) the Aggregate
Current Stated Principal Balance of the Class B Certificates outstanding as of
the Determination Date with respect to such Distribution Date.
"Class B Certificates" means the Class of Pass-Through Certificates
designated as Class B Certificates, issued in accordance with the provisions of
this Agreement, and which is substantially in the form of Exhibit B hereto.
"Class B Final Scheduled Distribution Date" means March 15, 2002.
"Class B Pass-Through Rate" means 8.50% per annum.
"Class B Percentage" means 10%.
"Class B Principal Carryover Shortfall" means, as of the close of any
Distribution Date, the excess of the Class B Principal Distribution Amount plus
any outstanding Class B Principal Carryover Shortfall from the preceding
Distribution Date over the amount of principal distributed to the holders of the
Class B Certificates on such Distribution Date pursuant to Sections 5.05 and
5.11.
6
"Class B Principal Distribution Amount" means, as of any Distribution Date,
the Class B Percentage of the Principal Distribution Amount.
"Class C Carryover Interest" means, with respect to any Distribution Date,
the difference, if any, between (a) the aggregate amount of Class C Certificate
Interest due on all prior Distribution Dates and (b) the aggregate amount of
Class C Certificate Interest (from whatever source) actually distributed to
Class C Certificateholders on all prior Distribution Dates, plus interest on any
shortfall in the distribution of interest on a prior Distribution Date at the
Class C Pass-Through Rate from the Distribution Date on which such shortfall
occurred through the Distribution Date of such calculation.
"Class C Certificate Interest" means, (a) with respect to the initial
Distribution Date, the product of (i) 1/360 of the Class C Pass-Through Rate
times (ii) the number of days from the Closing Date through the Determination
Date with respect to the initial Distribution Date times (iii) the Aggregate
Current Stated Principal Balance of the Class C Certificates as of the Closing
Date, and (b) with respect to any subsequent Distribution Date, the product of
(i) one-twelfth of the Class C Pass-Through Rate times (ii) the Aggregate
Current Stated Principal Balance of the Class C Certificates outstanding as of
the Determination Date with respect to such Distribution Date.
"Class C Certificates" means the Class of Pass-Through Certificates
designated as Class C Certificates, issued in accordance with the provisions of
this Agreement, and which is substantially in the form of Exhibit C hereto.
"Class C Final Scheduled Distribution Date" means March 15, 2002.
"Class C Pass-Through Rate" means 12.00% per annum.
"Class C Percentage" means 5%.
"Class C Principal Carryover Shortfall" means, as of the close of any
Distribution Date, the excess of the Class C Principal Distribution Amount plus
any outstanding Class C Principal Carryover Shortfall from the preceding
Distribution Date over the amount of principal distributed to the holders of the
Class C Certificates on such Distribution Date pursuant to Sections 5.05 and
5.11.
"Class C Principal Distribution Amount" means, as of any Distribution Date,
the Class C Percentage of the Principal Distribution Amount.
7
"Class D Carryover Interest" means, with respect to any Distribution Date,
the difference, if any, between (a) the aggregate amount of Class D Certificate
Interest due on all prior Distribution Dates and (b) the aggregate amount of
Class D Certificate Interest (from whatever source) actually distributed to
Class D Certificateholders on all prior Distribution Dates, plus interest on any
shortfall in the distribution of interest on a prior Distribution Date at the
Class D Pass-Through Rate from the Distribution Date on which such shortfall
occurred through the Distribution Date of such calculation.
"Class D Certificate Interest" means, (a) with respect to the initial
Distribution Date, the product of (i) 1/360 of the Class D Pass-Through Rate
times (ii) the number of days from the Closing Date through the Determination
Date with respect to the initial Distribution Date times (iii) the Aggregate
Current Stated Principal Balance of the Class D Certificates as of the Closing
Date, and (b) with respect to any subsequent Distribution Date, the product of
(i) one-twelfth of the Class D Pass-Through Rate times (ii) the Aggregate
Current Stated Principal Balance of the Class D Certificates outstanding as of
the Determination Date with respect to such Distribution Date.
"Class D Certificates" means the Class of Pass-Through Certificates
designated as Class D Certificates, issued in accordance with the provisions of
this Agreement, and which is substantially in the form of Exhibit D hereto.
"Class D Final Scheduled Distribution Date" means March 15, 2002.
"Class D Pass-Through Rate" means 15.00% per annum.
"Class D Percentage" means 5%.
"Class D Principal Carryover Shortfall" means, as of the close of any
Distribution Date, the excess of the Class D Principal Distribution Amount plus
any outstanding Class D Principal Carryover Shortfall from the preceding
Distribution Date over the amount of principal distributed to the holders of the
Class D Certificates on such Distribution Date pursuant to Sections 5.05 and
5.11.
"Class D Principal Distribution Amount" means, as of any Distribution Date,
the Class D Percentage of the Principal Distribution Amount.
"Closing Date" means December 30, 1996.
"Code" means the Internal Revenue Code of 1986, as amended, including any
successor or amendatory statutes and U.S. Department of the Treasury regulations
promulgated thereunder.
"Collection Account" means the account or accounts established pursuant to
Section 5.01 hereof with a Collection Account Depository for the deposit of all
payments received with respect to the Receivables.
8
"Collection Account Depository" means a national bank or banks acting as
the Collection Account Depository under this Agreement, its or their successors
in interest and any successors in interest pursuant to Section 5.04(a) hereof
and which has a combined capital and surplus of at least $25,000,000.
"Collection Period" means, with respect to any particular Distribution
Date, the period beginning on the first day of the calendar month preceding the
month of such Distribution Date and ending on the last day of such preceding
calendar month; provided, that the initial Collection Period shall begin on the
Closing Date and shall end on the last day of the calendar month preceding the
month of initial Distribution Date.
"Contract" means the retail financing agreement, retail installment
contract and security agreement, contract and security agreement, purchase
order, promissory note and security agreement, promissory note, security
agreement, financing statement and disclosures, installment sale agreement or
other agreement which is a form approved for use in each state of origination
and which evidences the purchase of a Financed Vehicle by an Obligor from a
Dealer and the financing of such purchase by such Dealer.
"Corporate Trust Office" means the office of the Trustee at which its
corporate trust business shall be administered, which office at the date of this
Agreement shall be 600 Travis Street, 8th Floor, Houston, Texas 77002,
Attention: Global Trust Services - Western Fidelity 1996-A except that with
respect to the presentation of Certificates for payment or for registration of
transfer and exchange, such term shall also mean the office of the Trustee in
the city of Dallas, Texas, which on the date hereof is 1201 Main Street, 18th
Floor, Dallas, Texas 75202 and except further that with respect to the delivery
of Custodian Documents and certain notices pertaining thereto such term shall
also mean the office of the Custodian in the city of Houston, Texas, which on
the date hereof is 801 W. Greens Rd., Suite 200, Houston, Texas 77067,
Attention: Sandy Berry, Western Fidelity 96-A (the "Custodial Address") in each
case at which at any particular time its corporate agency business shall be
conducted.
"Costs of Issuance" means those costs which are directly or indirectly
payable by or reimbursable by the Depositor from funds deposited into the
Issuance Fund on the Closing Date and related to the authorization, issuance,
sale and delivery of the Certificates, including, but not limited to, printing
costs, costs of preparation and reproduction of documents, filing and recording
fees, initial fees, charges and expenses of the Trustee in its capacity as such
(including Trustee's acceptance fee) and as disbursing agent and registrar, its
legal fees and charges (including outside counsel fees), the initial fees,
charges and expenses of the Supervisory Servicer (including its acceptance fee),
its legal fees and expenses (including outside counsel fees), the underwriting
and private placement agent fee payable to the Placement Agent pursuant to the
Placement Agreement on the Closing Date, fees and disbursements of consultants
and professionals, rating agency fees and expenses, fees and charges for
preparation, execution, transportation and safekeeping of Certificates, and any
other cost, charge or fee in connection with the issuance of the Certificates.
9
"Current Stated Principal Balance" means, with respect to any Certificate
as of any date of determination, the difference between (a) the Original Stated
Principal Balance of such Certificate, and (b) all prior distributions, if any,
made with respect to principal on such Certificate.
"Custodian" means the Trustee in its capacity as custodian of the Custodian
Files pursuant to Section 7.18 hereof.
"Custodian Documents" has the meaning specified in the Servicing Agreement.
"Custodian File" has the meaning set forth in Section 2.14A of the
Servicing Agreement.
"Cutoff Date" means, with respect to the Closing Date, the close of
business on December 27, 1996 and, with respect to a Funding Date, two Business
Days prior to such Funding Date.
"DCR" means Duff & Phelps Credit Rating Co., and its successor and assigns.
"Dealer" means an automobile dealer which (a) sold a Financed Vehicle to an
Obligor and (b) originated the respective Receivable which Receivable was sold
by such Dealer to the Seller and is being absolutely assigned by the Seller to
the Depositor pursuant to the Transfer and Assignment Agreement, and conveyed by
the Depositor to the Trustee hereunder.
"Dealer Agreement" means an agreement between the Seller, as buyer, and a
Dealer, as seller, pursuant to which one or more Receivables were sold by such
Dealer to the Seller.
"Defaulted Receivable" means any Receivable as to which the first of any of
the following has occurred (a) a Scheduled Payment or any portion thereof is
more than 180 days delinquent, (b) the related Obligor thereof is insolvent or
has sought protection under the United States Bankruptcy Code and the related
Contract has been discharged, (c) 90 days have elapsed since the Servicer
repossessed the related Financed Vehicle and any contractual or statutory
Obligor cure period has run, (d) the related Financed Vehicle has been
repossessed and sold, (e) proceeds have been received which, in the Servicer's
good faith judgment, constitute the final amounts recoverable in respect of such
Receivable or (f) consistent with the Servicer's customary collection policy,
has been or should be written off as uncollectible.
"Defaulted Receivable Deposit Amount" means, as of any date of calculation
with respect to a Defaulted Receivable as to which no repurchase pursuant to
Section 7.02 of the Transfer and Assignment Agreement has occurred, 100% of the
outstanding principal balance of the Defaulted Receivable plus accrued interest,
if any, to the date of calculation.
"Defaulted Receivable Recoveries" means those funds collected from the
Obligor or otherwise on a Defaulted Receivable, including Liquidation Proceeds,
but excluding Repurchase Prices and Defaulted Receivable Deposit Amounts.
10
"Definitive Certificates" has the meaning specified in Section 2.13 hereof.
"Delinquent Receivable" means a Receivable (other than a Defaulted
Receivable) as to which any Scheduled Payment remains unpaid for more than 30
days after the date on which it is due and payable.
"Delivery" when used with respect to Reserve Fund 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 by physical delivery to
the Trustee indorsed to, or registered in the name of, the Trustee or
indorsed in blank, and, with respect to a certificated security (as defined
in Section 8-102 (a)(4) of the UCC) when (i) the Trustee acquires
possession of the security certificate (as defined in Section 8-102(a)(16)
of the UCC); (ii) another person, other than a securities intermediary (as
defined in Section 8-102(a)(14) of the UCC), either acquires possession of
the security certificate on behalf of the Trustee or, having previously
acquired possession of the certificate, acknowledges that it holds for the
Trustee; or (iii) a securities intermediary acting on behalf of the Trustee
acquires possession of the security certificate, if the certificate is in
registered form and has been specially indorsed (as defined in Section
8-304(a) of the UCC) to the Trustee by an effective indorsement (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 its
nominee; and such additional or alternative procedures as may hereafter
become appropriate to effect the complete transfer of ownership of any such
Reserve Fund Property to the Trustee (as defined herein), 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 security to an appropriate book-entry account
maintained with a Federal Reserve Bank by a securities intermediary which
is also a "depositary" pursuant to applicable federal regulations and
issuance by such securities intermediary of a deposit advice or other
written confirmation of such book-entry registration to the Trustee of the
purchase by the Trustee of such book-entry securities; the making by such
securities 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 acting in its
capacity under Section 5.07 and indicating that such custodian holds such
Reserve Fund Property solely as agent for the Trustee; and such additional
or alternative procedures as may hereafter become appropriate to effect
complete transfer of ownership of any such Reserve Fund Property to the
Trustee, consistent with changes in applicable law or regulations or the
interpretation thereof; and
11
(c) with respect to any item of Reserve Fund Property which is a
financial asset (as defined in section 8-102(a)(9) of the UCC) that is not
governed by clause (b) above, when the Trustee acquires a security
entitlement (as defined in Section 8-102(a)(17) of the UCC) therein by
reason of a securities intermediary: (i) indicating by book entry that such
financial asset has been credited to the Trustee's security account (as
defined in Section 8-501(a) of the UCC); (ii) receiving such financial
asset for the Trustee and accepting it for credit to the Trustee's
securities account; or (iii) becoming obligated under other law,
regulation, or rule to credit such financial asset to the Trustee's
securities account.
"Depositor Financing Statement" means a Financing Statement naming the
Trustee as the secured party/creditor and the Depositor as the debtor.
"Depositor Order" means a written order or request signed in the name of
the Depositor by an Authorized Officer and delivered to the Trustee.
"Determination Date" means, with respect to a Distribution Date, the last
day of the month immediately preceding the month of such Distribution Date.
"Disbursing Agent" means the Trustee and any other party appointed as
disbursing agent pursuant to Section 3.03 hereof.
"Dissolution" means, with respect to the Depositor, bankruptcy, insolvency
or dissolution thereof.
"Distribution Date" means the 15th day of each month during which any of
the Certificates remain Outstanding (provided, if any such date is not a
Business Day, then the Distribution Date shall be the next succeeding Business
Day), beginning with the Distribution Date occurring in February 1997.
"Eligible Account" means (a) a segregated account or accounts maintained
with (i) a depository institution or trust company whose long-term unsecured
debt obligations are rated at least "A" by DCR at the time of any deposit
therein (or, if such obligations are, at the time of such deposit, not rated by
DCR, rated "A" by Fitch, "A2" by Moody's and "A" by S & P, provided, that if
such obligations are only rated by one of Fitch, Moody's or S & P, such rating
shall suffice) or (ii) Texas Commerce Bank National Association, or any
Affiliate thereof, as long as the long-term unsecured debt obligations of Texas
Commerce Bank National Association, are rated at least "A" by DCR at the time of
any deposit therein (or, if such obligations are, at the time of such deposit,
not rated by DCR, rated "A" by Fitch, "A2" by Moody's and "A" by S & P,
provided, that if such obligations are only rated by one of Fitch, Moody's or S
& P, such rating shall suffice), or (b) a segregated trust account or accounts
maintained with a federal or state chartered depository institution subject to
regulations regarding fiduciary funds on deposit substantially similar to 12
C.F.R. Section 9.10(b).
12
"Eligible Investments" means any one or more of the following obligations
or securities:
(a) (i) direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to payment of principal and interest by, the
United States or any agency or instrumentality of the United States, the
obligations of which are backed by the full faith and credit of the United
States; and (ii) direct interest-bearing obligations of, and
interest-bearing obligations guaranteed as to payment of principal and
interest by, the Federal National Mortgage Association or the Federal Home
Loan Mortgage Corporation, but only if, at the time of investment, such
obligations are assigned the highest credit rating by the Rating Agency;
(b) demand and time deposits in, notes of deposits of, or bankers
acceptances issued by, any depository institution or trust company
(including the Trustee or any affiliate of the Trustee, acting in their
respective commercial capacities) incorporated under the laws of the United
States of America or any State thereof and subject to supervision and
examination by federal or state banking authorities, so long as at the time
of such investment or contractual commitment providing for such investment
the commercial paper or other short-term debt obligations of such
depository institution or trust company (or, in the case of a depository
institution which is the principal subsidiary of a holding company, the
commercial paper or other short-term debt obligations of such holding
company) have a rating, at the time of such investment, of no less than
"P-1" by Moody's or "A-1" by Standard & Poor's or, if not rated by Moody's
or by Standard & Poor's the equivalent from another nationally recognized
statistical rating organization;
(c) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any State thereof which have a rating of no less than "P-1" by Moody's or
"A-1" by Standard & Poor's, or, if not rated by Moody's or by Standard &
Poor's, the equivalent from a nationally recognized statistical rating
organization at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities issued by
any particular corporation will not be Eligible Investments to the extent
that investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the Trust
Property to exceed ten percent (10%) of the sum of the Aggregate Current
Stated Principal Balance of the Certificates and the aggregate principal
amount of all Eligible Investments held as part of the Trust Property;
(d) commercial paper (including both non-interest bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the closing date thereof)
having the highest commercial paper rating from at least two of Moody's,
Fitch or Standard & Poor's at the time of such investment;
13
(e) notes or receipts representing ownership interests in future
interest or principal payments on obligations of the United States of
America or its agencies or instrumentalities (which obligations are backed
by the full faith and credit of the United States of America) held by a
custodian on behalf of the holders of such receipts;
(f) money market mutual funds registered under the 1940 Act, having a
rating, at the time of such investment, of no less than "P-1" by Moody's or
"AA" by Standard & Poor's, or, if not so rated, by the equivalent from
another nationally recognized statistical rating organization; and
(g) a collective investment fund (including a fund of the Trustee)
that is created pursuant to Regulation 9 of the Office of the Comptroller
of the Currency and that is invested solely in one or more obligations of
the types described in clauses (a) and (b) of this definition.
Eligible Investments may be purchased by or through the Trustee or its
Affiliates and may include any Eligible Investment for which the Trustee or its
Affiliates provides services including, but not limited to, such services as
manager, sponsor, depositor or advisor.
"Eligible Receivable" means a Receivable meeting all of the requirements of
Section 3.02(b) of the Transfer and Assignment Agreement as of the Closing Date
or Funding Date, as the case may be.
"Eligible Servicer" means the Servicer, the Supervisory Servicer or an
entity which, at the time of its appointment as Servicer, (a) is legally
qualified and has the capacity to service the Receivables, (b) has demonstrated
(except that, with respect to the Supervisory Servicer, the demonstration
required by this clause shall not apply) the ability to professionally and
competently service a portfolio of motor vehicle retail installment sale
contracts in accordance with high standards of skill and care, (c) is qualified
and entitled to use, and agrees to maintain the confidentiality of, the software
that the Servicer uses in connection with performing its duties and
responsibilities under the Servicing Agreement or obtains rights to use or
develops its own software which is adequate to perform its duties and
responsibilities under the Servicing Agreement and (d) has, or is wholly owned
by a Person that has, a short-term rating from a nationally recognized
statistical rating organization in its highest short-term rating category, such
rating is otherwise implied or such servicer is otherwise acceptable to the
Rating Agency in order for DCR to rate the Class A Certificates, the Class B
Certificates, the Class C Certificates and the Class D Certificates "A," "BBB,"
"BB" and "B," respectively. The determination of the qualifications specified in
subsections (a), (b) and (c) of this definition shall be made by the Depositor
with Certificateholder Approval.
"Event of Insolvency" has the meaning specified in Article VIII of this
Agreement.
"Event of Servicing Default" has the meaning specified in Article V of the
Servicing Agreement.
14
"Excess Receipts" means, with respect to any Distribution Date, any amounts
remaining in the Revenue Fund after all other amounts therein have otherwise
been paid out or disbursed on such Distribution Date pursuant to Section 5.05(c)
clauses First through Fourteenth; provided, that in the event of a termination
of this Agreement under Article XIII hereof, all amounts remaining after
distributions under Sections 5.05(c) First through Eleventh shall be deemed
Excess Receipts.
"Expense Account" means the account by that name established pursuant to
Section 5.01 hereof.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Recovery Determination" means a determination by the Servicer with
respect to a Defaulted Receivable or the Financed Vehicle related thereto (other
than a Receivable repurchased by the Seller pursuant to Section 2.15 hereof)
that there has been a recovery of all payments, recoveries or Insurance Proceeds
that the Servicer, in its reasonable good faith judgment, expects to be finally
recoverable.
"Final Recovery Receivable" means a Delinquent Receivable or a Defaulted
Receivable as to which the Servicer has determined in accordance with its
customary servicing practices, that eventual payment of Scheduled Payments is
unlikely.
"Final Scheduled Distribution Date" means, with respect to any Class, the
Class A Final Scheduled Distribution Date, the Class B Final Scheduled
Distribution Date, the Class C Final Scheduled Distribution Date or the Class D
Final Scheduled Distribution Date, as the case may be.
"Financed Vehicle" means a used automobile, van, minivan or light-duty
truck, together with all accessions thereto, securing an Obligor's indebtedness
under the respective Receivable.
"Financing Statement" has the meaning set forth in Section 2.11(e) hereof.
"Funding Date" means a day occurring not more than once per calendar week
during the Funding Period and on which day Subsequent Receivables are assigned
by the Seller to the Depositor and conveyed by the Depositor to the Trustee.
"Funding Event" means, with respect to a Funding Date, the occurrence of
the events required to occur in accordance with Section 2.16.
"Funding Period" means the period beginning on the Closing Date and ending
upon the earlier to occur of (a) 60 calendar days following the Closing Date,
(b) the date on which the amount on deposit in the Pre-Funding Account is
reduced to $10,000 or less and (c) the date upon which an Event of Insolvency
occurs.
15
"Holder" means a Certificateholder and, as the context requires, the holder
of the Residual Interest.
"Independent Public Accountants" means any of (a) Arthur Andersen LLP, (b)
Deloitte & Touche LLP, (c) Coopers & Lybrand LLP, (d) Ernst & Young LLP, (e)
KMPG Peat Marwick LLP, (f) Price Waterhouse LLP, (g) Ehrhardt, Keefe, Steiner &
Hottman, (h) any successor to any of the foregoing, or (i) any other firm
approved by the Rating Agency and the Certificateholders constituting
Certificateholder Approval; provided, that such firm is independent with respect
to the Servicer within the meaning of the Securities Act.
"Initial Receivables" means the Receivables assigned by the Seller to the
Depositor and conveyed by the Depositor to the Trustee on the Closing Date.
"Initial Reserve Fund Deposit" means an amount equal to 5.0% of the
Aggregate Receivable Balance of the Initial Receivables, which shall be
deposited by or on behalf of the Depositor into the Issuance Fund on the Closing
Date.
"Insurance Proceeds" means, with respect to a Financed Vehicle and the
related Receivable, any amount received during the related Collection Period
pursuant to any insurance policy required to be maintained by the Obligor
pursuant to the related Receivable that covers physical damage to the Financed
Vehicle (including policies procured by the Servicer on behalf of the Obligor),
which shall be allocated first, to interest on and second, to the principal
balance of such Receivable, all of which amounts shall be deposited to the
Collection Account.
"Issuance Fund" means the account by that name established pursuant to
Section 5.01 hereof.
"Lien" means any security interest, lien, charge, pledge, equity or
encumbrance of any kind other than liens for taxes due and payable after the
respective Cutoff Date, mechanics' liens filed after such Cutoff Date and any
liens that attach after such Cutoff Date by operation of law.
"Liquidated Receivable" means any Receivable liquidated by the Servicer
through sale of the Financed Vehicle or otherwise.
"Liquidation Proceeds" means the moneys collected from whatever source,
during the respective Collection Period, on a Liquidated Receivable, including
Insurance Proceeds but excluding Repurchase Prices and Defaulted Receivable
Deposit Amounts, net of the sum of (i) any amounts expended by the Servicer for
the account of the Obligor, and (ii) any amounts required by law to be remitted
to the Obligor; such proceeds shall be applied: first, to outstanding late fees
and prepayment charges allowed by applicable law; second, to interest due on the
Receivable; and third, to principal due on the Receivable.
16
"Majority Consent" means, with respect to the Certificates Outstanding on
the date of determination, the written consent of the Holders evidencing a
majority in interest of the Certificates of each Class.
"Monthly Available Revenues" means (a) collections and payments received
with respect to the Receivables and other items of Trust Property, including,
without limitation, Actual Payments, Repurchase Prices, Principal Distribution
Amounts and Liquidation Proceeds, representing cleared funds transferred from
the Collection Account to the Revenue Fund and (b) earnings on Eligible
Investments with respect to the immediately preceding Collection Period.
"Monthly Servicer Report" means a report substantially in the form of
Exhibit A-1 to the Servicing Agreement, delivered to the Trustee and others
specified therein by the Servicer pursuant to the Servicing Agreement.
"Monthly Supervisory Servicer Report" means a report substantially in the
form of Exhibit B to the Servicing Agreement, delivered to the Trustee and
others specified therein by the Supervisory Servicer pursuant to the Servicing
Agreement.
"Moody's" means Moody's Investors Service, Inc. and its successors and
assigns.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Nonconforming Receivable" means a Receivable with respect to which it is
determined, at any time, (a) that the Seller breached one or more of the
applicable representations or warranties contained in Section 3.02(b) of the
Transfer and Assignment Agreement at the time of transfer by the Seller to the
Depositor under the Transfer and Assignment Agreement which breach materially
adversely affects such Receivable, the related Financed Vehicle, the related
Custodian File or the interest of the Certificateholders in any of the
foregoing, in each case as determined by the Depositor, the Trustee or the
Certificateholders constituting Certificateholder Approval, or (b) that one or
more of the requirements set forth in Section 2.16 hereof with respect to the
acquisition of Subsequent Receivables has not been met.
"Obligor" means, with respect to a Receivable, the purchaser or
co-purchasers of the Financed Vehicle and/or any other Person who owes payments
under such Receivable whether as maker, co-maker, guarantor or otherwise.
"Officer's or Officers' Certificate" means a certificate signed by an
Authorized Officer or two Authorized Officers, respectively.
"Opinion of Counsel" means a written opinion of counsel who may, except as
otherwise expressly provided in this Agreement, be outside counsel for the
Depositor or the Trustee and who shall be satisfactory to the Trustee.
"Optional Purchase Percentage" means 10% of the Original Receivable
Balance.
17
"Original Receivable Balance" means the Aggregate Receivable Balance as of
the respective Cutoff Date of the Initial Receivables plus the Receivable
Balance of all Subsequent Receivables acquired on Funding Dates.
"Original Stated Principal Balance" means the stated principal balance of
any Certificate as of the Closing Date.
"Outstanding" means, as of the date of determination, all Certificates
theretofore authenticated and delivered under this Agreement except:
(a) Certificates theretofore cancelled by the Certificate Registrar or
delivered to the Certificate Registrar for cancellation;
(b) Certificates or portions thereof for whose payment money in the
necessary amount has been theretofore deposited with the Trustee in trust
for the Holders of such Certificates;
(c) Certificates in exchange for or in lieu of which other
Certificates of the same Class have been authenticated and delivered
pursuant to this Agreement; and
(d) Certificates alleged to have been destroyed, lost or stolen for
which replacement Certificates of the same Class have been issued as
provided for in Section 2.08 unless proof satisfactory to the Trustee is
presented that any such Certificates are held by a bona fide purchaser;
provided, however, that in determining whether the Certificateholders of the
requisite percentage of the Current Stated Principal Balance of the Outstanding
Certificates of any Class have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Certificates of such Class owned
by the Seller, the Depositor or any Affiliate thereof shall be disregarded and
deemed not to be Outstanding; except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent, or waiver, only Certificates which the Trustee
actually knows to be so owned shall be so disregarded. Certificates so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee certifies to the Trustee the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Seller, the Depositor or any
Affiliate thereof.
"Ownership Interest" means, with respect to any Certificate, any ownership
interest in such Certificate, including any interest in such Certificate as the
Certificateholder thereof and any other interest therein, whether direct or
indirect, legal or beneficial.
"Percentage Interest" means, with respect to any Certificate, the
percentage ownership interest of such Certificate in the aggregate of amounts
distributable hereunder to the related Class of Certificates. With respect to
any Certificate, the Percentage Interest evidenced thereby shall equal the
Original Stated Principal Balance thereof divided by the aggregate Original
Stated Principal Balance of the related Class.
18
"Perfection UCCs" means, with respect to each Receivable and the related
Trust Property, (a) the date stamped original of the filed Seller Financing
Statement covering such Receivable and the related Trust Property and (b) date
stamped original of filed Depositor Financing Statement covering such Receivable
and the related Trust Property and (c) date stamped original of filed
Termination Statements releasing the liens held by creditors of the Seller
covering such Receivable and the related Trust Property, or, in the case of (c)
herein, one of (i) copy of search results performed by Search Company
International, Information America or the successor or assign of either or
another national search company, or (ii) copy of search results obtained through
Information American Network - UCCs, Liens and Judgments or another national
data base system, indicating that such Termination Statements have been filed in
the UCC filing offices of the States in which the Financing Statements being
terminated were originally filed.
"Person" means any individual, corporation, partnership, joint venture,
association, limited liability company, limited liability partnership, joint
stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"Placement Agent" means Structured Capital Management, a division of First
Southwest Company, and its successors and assigns.
"Placement Agreement" means the Placement Agreement dated December 30, 1996
among the Depositor, the Seller and the Placement Agent.
"Predecessor Certificates" means, with respect to any particular
Certificate, every previous Certificate evidencing all or a portion of the same
debt as that evidenced by such particular Certificate; and, for the purpose of
this definition, any Certificate authenticated and delivered under Section 2.08
in lieu of a lost, destroyed or stolen Certificate shall be deemed to evidence
the same debt as the lost, destroyed or stolen Certificate.
"Pre-Funding Account" means the account by that name established pursuant
to Section 5.01 hereof and maintained pursuant to Section 5.10 hereof.
"Principal Distribution Amount" means, with respect to any Distribution
Date, the sum, without duplication, of: (a) the principal portion of all
Scheduled Payments collected during the preceding Collection Period with respect
to each Receivable that has not become a Defaulted Receivable, (b) for each
Receivable that became a Defaulted Receivable during the related Collection
Period, the principal portion of the Defaulted Receivable Deposit Amount (other
than a Defaulted Receivable which has become a Repurchased Receivable during
such period), (c) the principal portion of all prepayments received during the
preceding Collection Period (including partial prepayments on the Receivables
relating to rebates of extended warranty contract costs, insurance premiums and
19
partial prepayments received for the purpose of paying down the principal amount
of the Receivables); (d) the Receivable Balance of each Receivable that became a
Repurchased Receivable under an obligation that arose during the preceding
Collection Period; (e) the Receivable Balance of each Receivable liquidated by
the Servicer during the preceding Collection Period; (f) the principal portion
of Insurance Proceeds collected during the preceding Collection Period; (g) on
the Distribution Date immediately following the termination of the Funding
Period, the principal balance of Eligible Investments and cash remaining on
deposit in the Pre-Funding Account; and (h) the Receivable Balance of all
Receivables purchased by the Depositor during the preceding Collection Period in
accordance with Article VI; provided, however, that in calculating the Principal
Distribution Amount the following will be excluded: (i) all payments and
proceeds of any Repurchased Receivables the Repurchase Amount of which has been
included in the Principal Distribution Amount in a prior Collection Period and
(ii) Liquidation Proceeds attributable to principal on Liquidation Receivables
included in the Principal Distribution Amount in a prior Collection Period.
"Rating Agency" means DCR.
"Realized Losses" means, with respect to each Receivable as to which a
Final Recovery Determination has been made, an amount equal to the Receivable
Balance as of the date the Receivable became a Final Recovery Receivable minus
any payments, recoveries or related Insurance Proceeds allocable to the
Receivable Balance after such date net of all amounts payable or reimbursable
therefrom with respect to the Receivable for unpaid Servicing Fees or expenses.
"Receivable" means the obligation of an Obligor, as evidenced by a
Contract.
"Receivable Balance" means, with respect to a Simple Interest Receivable,
as of the close of business on (a) the applicable Cutoff Date, or (b) the last
day of a Collection Period, the Amount Financed minus the sum of (i) the 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 and (ii) any
payment of the Repurchase Price with respect to the Simple Interest Receivable
allocable to principal.
"Receivables Purchase Price" means, with respect to any Receivable, 100% of
the aggregate outstanding Receivable Balance of such Receivable as of the
related Cutoff Date plus accrued interest thereon to such Cutoff Date.
"Record Date" means, with respect to a Distribution Date, the last day of
the month immediately preceding the month of such Distribution Date.
"Refunding Event" has the meaning specified in Section 5.10(c).
"Repurchase Price" means 100% of the outstanding Receivable Balance of the
Receivable plus accrued interest, if any, to the date of repurchase.
20
"Repurchased Receivable" means a Receivable released from the lien of this
Agreement pursuant to Section 2.15 hereof and, if applicable, repurchased by the
Seller pursuant to Section 7.02 of the Transfer and Assignment Agreement.
"Reserve Fund" means the account by that name established pursuant to
Section 5.07 hereof and maintained pursuant to Section 5.12 hereof.
"Reserve Fund Minimum" means an amount which shall be equal to $491,000 (2%
of the Original stated Principal Balance of the Certificates of all Classes).
"Reserve Fund Property" has the meaning set forth in Section 5.07(b)
hereof.
"Reserve Fund Requirement" means, with respect to the Closing Date, an
amount equal to the Initial Reserve Fund Deposit. Following the Closing Date,
funds specified in Section 5.05(c) clause Fourteenth shall be deposited into the
Reserve Fund on each Distribution Date until the amount on deposit in the
Reserve Fund shall equal 7.0% of the Aggregate Current Stated Principal Balance
of the Certificates of all Classes. On and after any Distribution Date on which
the amount on deposit in the Reserve Fund first equals or exceeds 7.0% of the
Aggregate Current Stated Principal Balance of the Certificates of all Classes,
the "Reserve Fund Requirement" shall thereafter, with respect to any
Distribution Date, be an amount equal to 7.0% of the Aggregate Current Stated
Principal Balance of the Certificates of all Classes; provided, however, that,
all amounts otherwise available for deposit into the Residual Interest Account
pursuant to Section 5.05(c) clause Fifteenth shall be deposited into the Reserve
Fund on each Distribution Date related to a Collection Period during which an
Accelerated Reserve Fund Event has occurred or is continuing, and thereafter,
except with respect to the occurrence of an event described in clause (b) of the
definition of Accelerated Reserve Fund Event, the Reserve Fund Requirement, on
each Distribution Date, shall be 10% of the Aggregate Current Stated Principal
Balance of the Certificates of all Classes after giving effect to the Principal
Distribution Amount distributed on such Distribution Date; provided, that the
Reserve Fund Requirement shall not be less than the Reserve Fund Minimum; and
further, provided, however, that, except with respect to the occurrence of an
event described in clause (b) of the definition of Accelerated Reserve Fund
Event, in the event an Accelerated Reserve Fund Event shall be cured, the
Reserve Fund Requirement shall be 7.0% of the Aggregate Current Stated Principal
Balance of the Certificates of all Classes. Upon the occurrence of an event
described in clause (b) of the definition of Accelerated Reserve Fund Event, the
Reserve Fund Requirement shall not be subject to any maximum limitation.
"Residual Interest" means the uncertificated interest of that name issued
in connection with the issuance of the Certificates hereunder, evidencing rights
to receive certain amounts, subject to prior claims, in accordance with Section
5.09 hereof to be derived from the Trust Property as more fully described
herein. The Depositor shall be the owner of the Residual Interest.
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"Residual Interest Account" means the account by that name established
pursuant to Section 5.01 hereof.
"Responsible Officer" means, when used with respect to the Trustee or
Supervisory Servicer, as the case may be, any officer assigned to the Corporate
Trust Office (or any successor thereto), including any Vice President, Senior
Trust Officer, Trust Officer, Authorized Signer, Assistant Trust Officer any
Assistant Secretary, any trust officer or any other officer of the Trustee or
Supervisory Servicer, as the case may be, customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Agreement and the Servicing
Agreement, as the case may be, 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.
"Revenue Fund" means the fund by that name established pursuant to Section
5.01 hereof.
"S&P" or "Standard & Poor's" means Standard & Poor's Ratings Group, a
division of McGraw-Hill Inc., a corporation organized and existing under the
laws of the State of Delaware, and its successors and assigns.
"Schedule of Receivables" means, as the context may require, (a) the
schedule of Initial Receivables or Subsequent Receivables, as the case may be,
assigned to the Depositor by the Seller and conveyed to the Trustee by the
Depositor on the Closing Date or a Funding Date, respectively, which schedule is
attached to an assignment substantially in the form of Exhibit A to the Transfer
and Assignment Agreement, or (b) collectively, the schedules of all Receivables
assigned to the Depositor by the Seller and conveyed to the Trustee by the
Depositor as of the date of determination.
"Scheduled Payment" means, with respect to a Simple Interest Receivable,
the fixed payment required to be made by the Obligor during the respective
Collection Period sufficient to amortize the Receivable Balance under the Simple
Interest Method over the term of the Receivable and to provide interest at a
fixed rate; provided, however, that "Scheduled Payment" does not include late
fees, prepayment charges allowed by applicable law, finance charges or payments
for physical damage, credit life, credit disability or mechanical repair
insurance premiums whether such insurance was purchased by the Obligor or by a
creditor on behalf of the Obligor; provided, further, that "Scheduled Payment"
may, for purposes only of determining the existence or classification of
Defaulted Receivables and Delinquent Receivables, in accordance with normal
servicing procedures in the applicable jurisdiction, as determined in the sole
discretion of the Servicer, mean an amount equal to no less than 90% of the
fixed payment; further, provided, however, that in no event shall any such
shortfalls in the fixed payment received from or on behalf of the Obligor be
forgiven.
"Securities Act" means the Securities Act of 1933, as amended.
22
"Securities Depository" means The Depository Trust Company and its
successors and assigns or if, (a) the then Securities Depository resigns from
its functions as depository of the Class A Certificates and the Class B
Certificates or (b) the Depositor discontinues use of the Securities Depository
pursuant to Section 2.12 of this Agreement, any other securities depository
which agrees to follow the procedures required to be followed by a securities
depository in connection with the Class A Certificates and the Class B
Certificates and which is selected by the Depositor.
"Seller" means Western Fidelity.
"Seller Financing Statement" means a Financing Statement naming the Seller
as the debtor/seller and the Depositor as the secured party/purchaser.
"Servicer" means Western Fidelity as the Servicer of the Receivables or any
other Eligible Servicer acting as servicer pursuant to the Servicing Agreement.
Unless the context otherwise requires "Servicer" also refers to any successor
Servicer appointed hereunder or pursuant to the Servicing Agreement.
"Servicer Files" has the meaning set forth in Section 2.16 of the Servicing
Agreement.
"Servicer Receipt" means any custodial receipt, pursuant to which the
Servicer acknowledges that the Servicer is holding the Custodian Files relating
to the Receivables listed therein on behalf of the Trustee and the
Certificateholders, as their interests may appear.
"Servicing Agreement" means that certain Servicing Agreement dated as of
the date hereof among the Depositor, the Supervisory Servicer, the Trustee and
the Servicer, relating to the servicing of the Receivables.
"Servicing Fee" means the fee by that name payable to the Servicer for
services rendered determined pursuant to Section 2.08 of the Servicing
Agreement.
"Servicing Officer" means those officers of the Servicer involved in, or
responsible for, the administration and servicing of the Receivables, as
identified on the list of Servicing Officers furnished by the Servicer to the
Trustee, and the Certificateholders from time to time.
"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 fixed rate of
interest multiplied by the unpaid principal balance multiplied by the period of
time elapsed since the preceding payment of interest was made.
"Simple Interest Receivable" means any Receivable under which the portion
of a payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.
23
"State" means any one or more of the United States and the District of
Columbia.
"Subsequent Receivables" means the Eligible Receivables assigned by the
Seller to the Depositor and conveyed by the Depositor to the Trustee on a
Funding Date.
"Successor Servicer" means that person succeeding the Servicer under and
pursuant to the Servicing Agreement.
"Successor Supervisory Servicer" means that party succeeding to the
Supervisory Servicer under and pursuant to the Servicing Agreement.
"Supervisory Servicer" means Texas Commerce Bank National Association, a
national banking association, its successor or assigns, acting in the capacity
of back-up servicer pursuant to the Servicing Agreement.
"Supervisory Servicing Fee" means the fee by that name payable to the
Supervisory Servicer for services rendered, determined pursuant to Section 2.08
of the Servicing Agreement.
"Termination Statement" has the meaning set forth in Section 2.11(e)
hereof.
"Transfer" means any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
"Transfer and Assignment Agreement" means the Transfer and Assignment
Agreement dated as of the date hereof by and between the Seller and the
Depositor relating to the absolute assignment of Receivables by the Seller to
the Depositor.
"Transferee" means any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transition Costs" means an amount necessary (i) to reimburse the successor
to the Servicer or the Supervisory Servicer, as the case may be, for reasonable
and accountable costs and expenses not to exceed the total amount of $100,000 on
a cumulative basis incurred in connection with the transition of certain duties
from the Servicer or the Supervisory Servicer, as the case may be, to a
successor, and (ii) upon removal of Texas Commerce Bank National Association as
Supervisory Servicer or Servicer without cause under Section 2.01(h) of the
Servicing Agreement, $25,000 to Texas Commerce Bank National Association in
connection with the transition of certain duties from such Supervisory Servicer
or Servicer, as the case may be, to a successor.
"Trust" means the Western Fidelity Receivables Trust 1996-A created by this
Agreement, the estate of which shall consist of the Trust Property.
"Trust Property" shall have the meaning set forth in Section 2.01(d).
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"Trustee" means Texas Commerce Bank National Association, a national
banking association, until a successor Person shall have become the Trustee
pursuant to the applicable provisions of this Agreement, and thereafter
"Trustee" means such successor Person.
"Trustee Fee" means the fee payable to the Trustee for services rendered in
the amount of the greater of (a) 17 basis points per annum on the Aggregate
Current Stated Principal Balance of the Certificates of all Classes on the first
day of the applicable Collection Period, calculated and payable monthly or (b)
$400 per month.
"Trustee Receipt" means, with respect to each Custodian File, a receipt
executed on behalf of the Trustee as Custodian, (a) acknowledging delivery to
the Trustee, in its capacity as Custodian, of (i) the executed original
counterpart of the Receivable or, in the case of no more than five percent of
the initial aggregate Receivable Balance of the Receivables for which the
original Receivable has been lost, a certified copy of the original Receivable;
(ii) the certificate of title with respect to the related Financed Vehicle; and
(iii) the Perfection UCCs; or (b) stating that one or more of the foregoing
documents has not been delivered to the Trustee, in its capacity as Custodian,
or is defective on its face without independent investigation (that is,
mutilated, damaged, defaced, incomplete, improperly dated, clearly forged or
otherwise physically altered) in any material respect.
"UCC" means the Uniform Commercial Code as adopted in the State of
Colorado, and in any other state having jurisdiction over the transfer or pledge
of the Receivables from the Seller to the Depositor or from the Depositor to the
Trustee.
"Vice President" means, with respect to the Seller, the Depositor, the
Supervisory Servicer, the Servicer or the Trustee, any vice president, whether
or not designated by a number or a word or words added before or after the title
"vice president."
"Western Fidelity" means Western Fidelity Funding, Inc., a Colorado
corporation, its successors and assigns.
Section 1.02. Calculations. Calculations required to be made pursuant to
this Agreement shall be made on the basis of information or accountings as to
distributions on each Certificate furnished by the Supervisory Servicer or the
Servicer. Except to the extent they are incorrect on their face, such
information or accountings may be conclusively relied upon in making such
calculations, but to the extent that it is later determined that any such
information or accountings are incorrect, appropriate corrections or adjustments
will be made.
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ARTICLE II
CONVEYANCE; THE CERTIFICATES; RECONVEYANCE
Section 2.01. Conveyance and Acceptance by Trustee.
(a) Upon the execution by the parties hereto, there is hereby created
the Western Fidelity Receivables Trust 1996-A. The situs and administration
of the Trust shall be in Houston, Texas or in such other city in which the
Corporate Trust Office is located from time to time.
(b) In consideration of the Trustee's delivery of the Certificates to
or upon the order of the Depositor in an aggregate principal amount equal
to $24,550,000, the Depositor does hereby irrevocably sell, assign, and
otherwise convey to the Trustee, in trust for the benefit of the
Certificateholders, without recourse (subject to the obligations herein):
(i) all right, title and interest of the Depositor in and to the
Initial Receivables identified on Exhibit B to the Transfer and
Assignment Agreement, all moneys received thereon on and after the
Cutoff Date allocable to principal, and all moneys received thereon
allocable to interest accrued from and including the Cutoff Date;
(ii) the interest of the Depositor in the security interests in
the Financed Vehicles granted by the Obligors pursuant to the Initial
Receivables;
(iii) all right, title and interest of the Depositor in and to
the Pre-Funding Account and the Capitalized Interest Account and all
moneys and investments from time to time on deposit therein;
(iv) the right of the Depositor to realize upon any property
(including the right to receive future Liquidation Proceeds) that
shall have secured an Initial Receivable and have been repossessed by
or on behalf of the Trustee;
(v) the interest of the Depositor in any recourse relating to
Dealer Agreements concerning the Initial Receivables;
(vi) all right, title and interest of the Depositor in and to the
Transfer and Assignment Agreement; and
(vii) the proceeds of any and all of the foregoing.
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(c) Subject to the conditions set forth in Section 2.16 hereof, in
consideration of the Trustee's delivery on the related Funding Dates to or
upon the order of the Depositor of all or a portion of the balance in the
Pre-Funding Account in an amount equal to the aggregate Receivables
Purchase Price of the Subsequent Receivables to be acquired on any Funding
Date (a portion of which shall be deposited into the Reserve Fund in
accordance with Section 2.16(b)(v)(A) hereof), the Depositor shall on such
Funding Date sell, transfer, assign, set over and otherwise convey to the
Trustee, without recourse (subject to the obligations herein):
(i) all right, title and interest of the Depositor in and to
Subsequent Receivables and all moneys received thereon, on and after
the related Cutoff Date, allocable to principal, and all moneys
received thereon allocable to interest accrued from and including the
related Cutoff Date;
(ii) the interest of the Depositor in the security interests in
the Financed Vehicles granted by Obligors pursuant to the Subsequent
Receivables;
(iii) the right of the Depositor to realize upon any property
(including the right to receive future Liquidation Proceeds) that
shall have secured a Subsequent Receivable and have been repossessed
by or on behalf of the Trustee;
(iv) the interest of the Depositor in any recourse relating to
Dealer Agreements concerning the Subsequent Receivables;
(v) all right, title and interest of the Depositor in and to the
Transfer and Assignment Agreement; and
(vi) the proceeds of any and all of the foregoing.
(d) It is the intention of the Depositor and the Trustee that the
transfer and assignment of the Depositor's right, title and interest in and
to the assets identified in clauses (i) through (vii) of Section 2.01(b)
and clauses (i) through (vi) of Section 2.01(c) (collectively, the "Trust
Property") shall constitute an absolute sale by the Depositor to the
Trustee on behalf of the Trust for the benefit of the Certificateholders,
and each such sale shall be evidenced by an assignment substantially in the
form of Exhibit I hereto. In the event a court of competent jurisdiction
were to recharacterize the transfer of the Trust Property as a secured
borrowing rather than a sale, contrary to the intent of the Depositor and
the Trustee, the Depositor does hereby grant, assign and convey to the
Trustee and the Trust, as security for all amounts distributable to the
Certificateholders, a security in and lien upon all of its right, title and
interest in and to the Trust Property, including all amounts deposited to
the Collection Account, the Revenue Fund, the Certificate Account and the
Pre-Funding Account, said security interest to be effective from the date
of execution of this Agreement.
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(e) The Trustee does hereby accept all consideration conveyed by the
Depositor pursuant to Section 2.01(b) and 2.01(c), and declares that the
Trustee shall hold such consideration upon the trusts herein set forth for
the benefit of all present and future Certificateholders, subject to the
terms and provisions of this Agreement.
The Trustee and the Certificateholders acknowledge and agree that the
Depositor is the holder of the Residual Interest and, subject to the terms
and provisions of this Agreement, shall be entitled to receive all
distributions of Excess Receipts.
Section 2.02. General.
(a) The Certificates shall be designated as Class A Certificates,
Class B Certificates, Class C Certificates and Class D Certificates.
(b) All distributions of principal of, premium, if any, and interest
with respect to the Certificates shall be made only from the Trust
Property, on the terms and conditions specified herein. Each
Certificateholder, by its acceptance of the Certificates, agrees that,
subject to the repurchase obligations of the Seller and the Depositor and
the indemnification obligations provided for herein, in the Servicing
Agreement and in the Transfer and Assignment Agreement, it will have
recourse solely against such Trust Property and such repurchase and
indemnification obligations.
(c) All Certificates of each Class shall be substantially identical in
all respects except that the Certificates of each Class may have a
different pass-through rate. Except as specifically provided herein, all
Certificates issued, authenticated and delivered under this Agreement shall
be in all respects equally and ratably entitled to the benefits hereof
without preference, priority or distinction on account of the actual time
or times of authentication and delivery, all in accordance with the terms
and provisions of this Agreement.
(d) The aggregate Original Stated Principal Balance of the Class A
Certificates, the Class B Certificates, the Class C Certificates and the
Class D Certificates that may be executed by the Depositor and
authenticated and delivered by the Trustee under this Agreement is limited
to $19,640,000, $2,455,000, $1,227,500 and $1,227,500, respectively.
The Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D Certificates shall be entitled to
distributions of interest as provided herein at the Class A Pass-Through
Rate, the Class B Pass-Through Rate, the Class C Pass-Through Rate and the
Class D Pass-Through Rate, respectively. The Class A Certificates shall
receive a final distribution on the Class A Final Scheduled Distribution
Date, the Class B Certificates shall receive a final distribution on the
Class B Final Scheduled Distribution Date, the Class C Certificates shall
receive a final distribution on the Class C Final Scheduled Distribution
Date, and the Class D Certificates shall receive a final distribution
28
on the Class D Final Scheduled Distribution Date assuming that (i)
scheduled interest and principal payments on each Receivable are timely
received, (ii) no prepayments of principal are received with respect to any
Receivable and (iii) there is no Refunding Event, Event of Insolvency or
optional repurchase of the Receivables. All Certificates of the same Class
shall be issued on a parity with one another, with no Certificate of any
Class having any priority over any other Certificate of that same Class.
(e) Each Certificate is issuable in the initial denomination of
$100,000, and integral multiples of $5,000 in excess thereof, except that
one Certificate of each Class may be issued in an additional amount equal
to the remainder of the initial Aggregate Current Principal Balance of such
Class on the Closing Date (expressed in terms of the principal amount
thereof at the Closing Date).
(f) The Residual Interest is hereby issued to, and shall be owned by,
the Depositor. The Residual Interest shall not be entitled to any stated
rate of interest, but shall represent the rights of the Depositor to
receive certain residual amounts derived from the assets of the Trust
Property on the terms and conditions specified herein; provided, however,
that any such rights shall be wholly and completely subordinate and
inferior to the rights of the Certificateholders to receive distributions
of principal and interest with respect to such Class A Certificates, Class
B Certificates, Class C Certificates and Class D Certificates as provided
herein.
Section 2.03. Forms of Certificates.
(a) The Certificates of each Class shall be issuable only as
registered Certificates. The initial Class A Certificates, Class B
Certificates, Class C Certificates and Class D Certificates and the
Trustee's certificate of authentication shall be in substantially the form
set forth in Exhibit A, Exhibit B, Exhibit C and Exhibit D, respectively,
to this Agreement, with such appropriate restrictive legends, insertions,
omissions, substitutions and other variations as are required or permitted
by this Agreement or as may in the Depositor's judgment be necessary,
appropriate or convenient to establish entitlement to an exemption from
United States withholding tax or reporting requirements with respect to
distributions on the Certificates, or to comply, or facilitate compliance,
with other applicable laws, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as
may be required by any applicable regulation (whether proposed, temporary
or final) promulgated pursuant to the Code, including, without limitation,
any legend required in respect of original issue discount on any
Certificate, or as may, consistently herewith, be determined by the
officers of the Depositor executing such Certificates, as evidenced by
their execution thereof. Any portion of the text of any Certificate may be
set forth on the reverse thereof with an appropriate reference on the face
of the Certificate.
29
(b) The Certificates shall be printed, typewritten, lithographed,
engraved or produced by any combination of these methods on notes with or
without steel engraved borders or may be produced in any other manner
determined by the Depositor, all as determined by the officers of the
Depositor executing such Certificates, as evidenced by their execution
thereof.
Section 2.04. Distributions to Certificateholders.
(a) Certificateholders of each Class shall be entitled to receive
distributions of interest on each Distribution Date (including any Class A
Carryover Interest, Class B Carryover Interest, Class C Carryover Interest
and Class D Carryover Interest, as the case may be, from prior Distribution
Dates). Certificateholders of each Class shall be entitled to receive
distributions of principal on Distribution Dates; provided that, to the
extent provided in Sections 5.05 and 5.11, the rights of the Class B
Certificateholders to receive distributions in respect of the Class B
Certificates shall be and hereby are subordinated to the rights of the
Class A Certificateholders to receive distributions in respect of the Class
A Certificates; and the rights of the Class C Certificateholders to receive
distributions in respect of the Class C Certificates shall be and hereby
are subordinated to the rights of the Class A Certificateholders and the
Class B Certificateholders to receive distributions in respect of the Class
A Certificates and the Class B Certificates, respectively; and the rights
of the Class D Certificates to receive distributions in respect of the
Class D Certificates shall be and hereby are subordinated to the rights of
the Class A Certificateholders, the Class B Certificateholders and the
Class C Certificateholders to receive distributions in respect of the Class
A Certificates, the Class B Certificates and the Class C Certificates,
respectively. Any distribution of interest and principal distributable with
respect to the Certificates on the applicable Distribution Date shall be
made to the Person in whose name such Certificate is registered at the
close of business on the Record Date for such Distribution Date in the
manner provided in Section 5.11(b) hereof.
(b) All reductions in the principal balance of a Certificate (or one
or more Predecessor Certificates) effected by distributions of principal
made on any Distribution Date shall be binding upon all Holders of such
Certificate and of any Certificate issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, whether or not such
distribution is noted on such Certificate.
Section 2.05. Execution, Authentication, Delivery and Dating. Unless
Certificates of any Class are maintained in book-entry form pursuant to Section
2.12:
(a) The Certificates shall be executed by the Trustee behalf of the
Trust by one of its Authorized Officers. The signature of such Authorized
Officers on the Certificates may be manual or facsimile. Certificates
bearing the manual or facsimile signatures of any individual who was at any
time an Authorized Officer of the Trustee shall bind the Trust,
notwithstanding the fact that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of issuance of such
Certificates.
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(b) At any time and from time to time after the execution and delivery
of this Agreement, the Trustee, upon receipt of a Depositor Order, shall
authenticate and deliver such Certificates; provided, however, that the
Trustee shall not authenticate any Certificate which on its face and based
upon the last information received by the Trustee from the Servicer does
not comply with the provisions of this Agreement; provided, further, that
the Trustee shall not authenticate the initial Certificates unless and
until it shall have received the documents listed in Section 2.11 hereof.
(c) Each Certificate authenticated and delivered by the Trustee to or
upon Depositor Order on or prior to the Closing Date shall be dated the
Closing Date. All other Certificates that are authenticated after the
Closing Date for any other purposes under this Agreement shall be dated the
date of their authentication.
(d) Certificates issued upon transfer, exchange or replacement of
other Certificates shall be issued in authorized denominations reflecting
the original aggregate principal amount of the Certificates so transferred,
exchanged or replaced, but shall represent only the Current Stated
Principal Balance of the Certificates so transferred, exchanged or
replaced. In the event that any Certificate is divided into more than one
Certificate in accordance with this Article II, the Current Stated
Principal Balance of such Certificate shall be proportionately divided
among the Certificates delivered in exchange therefore.
(e) No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Certificate a certificate of authentication, substantially in the form
provided for herein, executed by the Trustee by the manual signature of at
least one of its authorized signatories, and such executed certificate upon
any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered.
Section 2.06. Temporary Certificates. Temporary Certificates shall be
issuable in any authorized denomination, and substantially in the form of the
Certificates but with such omissions, insertions and variations as may be
appropriate for temporary Certificates, all as may be determined by the
Depositor. Every such temporary Certificate shall be executed by the Depositor
and authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with the same effect, as the definitive Certificates.
Without unreasonable delay the Depositor shall execute and deliver to the
Trustee definitive Certificates (other than in the case of Certificates in
global form) and thereupon any or all temporary Certificates (other than any
such Certificate in global form) may be surrendered in exchange therefor, at the
Corporate Trust Office and the Trustee shall authenticate and deliver in
exchange for such temporary Certificates an equal aggregate principal amount of
definitive Certificates. Such exchange shall be made by the Depositor at its own
expense and without any charge therefor. Until so exchanged, the temporary
Certificates shall in all respects be entitled to the same benefits and subject
to the same limitations under this Agreement as definitive Certificates
authenticated and delivered hereunder.
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Section 2.07. Registration, Registration of Transfer and Exchange.
(a) Unless Certificates of any Class are maintained in book-entry form
pursuant to Section 2.12, the Depositor shall cause to be kept a register
(the "Certificate Register") in which the Depositor shall provide for the
registration of Certificates and the registration of transfers of
Certificates. The Trustee is hereby initially appointed "Certificate
Registrar," and hereby accepts such appointment, for the purpose of
registering Certificates and transfers of Certificates as herein provided
subject to such reasonable regulations as the Trustee may prescribe. Upon
any resignation of any Certificate Registrar appointed by the Depositor,
the Depositor shall promptly appoint a successor or, in the absence of such
appointment, shall assume the duties of Certificate Registrar.
(b) (i) Each Person who has or who acquires any Ownership
Interest in a Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by
the provisions of this Section 2.07. No Ownership Interest in a
Certificate may be transferred, and the Trustee and the Depositor
shall not register the transfer of any Certificate, unless the
proposed transferee shall have delivered to each of the Trustee and
the Depositor either (i) evidence satisfactory to them that such
Certificate has been registered under the Securities Act and has been
registered or qualified under all applicable state securities laws to
the reasonable satisfaction of the Trustee or (ii) an express
agreement substantially in the form as set forth in Exhibit E (a
"Transferee Agreement") by the proposed transferee to be bound by and
to abide by the provisions of this Section 2.07 and the restrictions
noted in the Transferee Agreement; provided, that compliance with the
provisions of subparagraphs (i) and (ii) hereof shall not be required
if the proposed transferee is listed in the latest available Standard
& Poor's Corporation Rule 144A list of Qualified Institutional Buyers;
or (iii) in the case of the original issuance and delivery of a
Certificate from the Depositor to an initial purchaser, the investment
letter substantially in the form of Exhibit C to the Placement
Agreement shall be deemed to be a Transferee Agreement for purposes of
this Agreement and the Certificates.
(ii) The Depositor will, upon the request of the Holder of any
Outstanding Certificate, provide to such Holder, and any qualified
institutional buyer designated by such Holder, such financial and
other information as such Holder may reasonably determine to be
necessary in order to permit compliance with the information
requirements of Rule 144A under the Securities Act in connection with
the resale of Certificates, except at such times as the Depositor
32
is subject to the reporting requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended. For the purpose of this
paragraph, the term "qualified institutional buyer" shall have the
meaning specified in Rule 144A under the Securities Act.
(iii) The Residual Interest may not be resold or transferred to
any transferee except, to the reasonable satisfaction of the Trustee,
to qualified institutional buyers within the meaning of Rule 144A
under the Securities Act or to persons involved in the organization or
operation of the Depositor or an Affiliate of such persons; provided
that, no such sale or transfer shall be effective unless the Trustee
shall have received an opinion of counsel in form and substance
acceptable to the Trustee to the effect that such transfer, if
consummated, would not cause the entity created under this Agreement
to be treated as an association taxable as a corporation for federal
income tax purposes.
(iv) No transfer of a Certificate shall be made to an employee
benefit plan, trust or account subject to the Employee Retirement
Income Security Act of 1974, as amended, or a plan as described in
Section 4975(e) of the Internal Revenue Code of 1986, as amended.
(c) Subject to the other restrictions contained in this Section and
Section 2.12, upon surrender for registration of transfer of a Certificate
of any Class at the Corporate Trust Office of the Trustee, the Trustee
shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of such Class of
any authorized denominations, and of a like Original Stated Principal
Balance.
(d) Unless Certificates of any Class are maintained in book-entry form
pursuant to Section 2.12, at the option of the Certificateholder,
Certificates of any Class may be exchanged for other Certificates of such
Class of any authorized denominations and of a like Original Stated
Principal Balance upon surrender of the Certificates to be exchanged at the
Corporate Trust Office of the Trustee. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute, authenticate and
deliver the Certificates which the Certificateholder making the exchange is
entitled to receive.
(e) Unless Certificates of any Class are maintained in book-entry form
pursuant to Section 2.12, every Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed. All Certificates issued upon any registration of
transfer or exchange of Certificates shall be the valid obligations of the
Depositor, evidencing the same debt, and entitled to the same benefits
under this Agreement, as the Certificates surrendered upon such
registration of transfer or exchange. No service charge shall be made for
any registration of transfer or exchange of Certificates, but the Depositor
or the Trustee may require payment of a sum sufficient to cover any tax or
other governmental charge as may be imposed in connection with any
registration of transfer or exchange of Certificates, other than exchanges
pursuant to Section 2.08 not involving any transfer.
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(f) All Certificates of each Class shall bear the legend set forth at
the top of the forms of such Certificates attached hereto as Exhibit A,
Exhibit B, Exhibit C and Exhibit D.
Section 2.08. Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If (i) any mutilated Certificate is surrendered to the Trustee or
the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Certificate, and (ii) there is delivered to the Trustee
such security or indemnity as may be required by it to hold each of the
Depositor and the Trustee harmless, then, in the absence of actual notice
to the Depositor or the Trustee that such Certificate has been acquired by
a bona fide purchaser, the Depositor shall execute, and the Trustee shall
authenticate and deliver upon Depositor Order, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate or Certificates of the same tenor and Class, and Original
Stated Principal Balance bearing a number not contemporaneously
Outstanding; provided, however, that if any such mutilated, destroyed, lost
or stolen Certificate shall have become subject to receipt of distributions
in full, instead of issuing a new Certificate, the Trustee may make a
distribution with respect to such Certificate without surrender thereof,
except that any mutilated Certificate shall be surrendered. If, after the
delivery of such new Certificate or distribution with respect to a
destroyed, lost or stolen Certificate pursuant to the proviso to the
preceding sentence, a bona fide purchaser of the original Certificate in
lieu of which such new Certificate was issued presents for receipt of
distributions such original Certificate, the Depositor and the Trustee
shall be entitled to recover such new Certificate (or such distribution)
from the Person to whom it was delivered or any Person taking such new
Certificate from such Person, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided therefor to the
extent of any loss, damage, cost or expenses incurred by the Depositor or
the Trustee in connection therewith.
(b) Upon the issuance of any new Certificate under this Section, the
Depositor or the Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto.
(c) Every new Certificate issued pursuant to this Section 2.08 in lieu
of any destroyed, lost or stolen Certificate shall constitute an original
additional contractual obligation of the Depositor, whether or not the
destroyed, lost or stolen Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Agreement equally
and proportionately with any and all other Certificates duly issued
hereunder.
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(d) The provisions of this Section 2.08 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment with respect to mutilated, destroyed, lost or
stolen Certificates.
Section 2.09. Persons Deemed Certificateholders. Before due presentment for
registration of transfer of any Certificate, the Depositor, the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate (a) on the applicable
Record Date for the purpose of receiving distributions with respect to principal
and interest on such Certificate and (b) on any date for all other purposes
whatsoever, whether or not such Certificate be overdue, and neither the
Depositor, the Trustee nor any agent of the Depositor or the Trustee shall be
affected by any notice to the contrary.
Section 2.10. Cancellation of Certificates. All certificated Certificates
surrendered for payment, registration of transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Depositor may at any time deliver to
the Trustee for cancellation any Certificate previously authenticated and
delivered hereunder which the Depositor may have acquired in any manner
whatsoever, and all Certificates so delivered shall be promptly cancelled by the
Trustee. No Certificates shall be authenticated in lieu of or in exchange for
any Certificates cancelled as provided in this Section 2.10 except as expressly
permitted by this Agreement. All cancelled Certificates shall be held and
disposed by the Trustee in accordance with its standard retention and disposal
policy.
Section 2.11. Conditions to Closing. The Certificates shall be executed,
authenticated and delivered on the Closing Date in accordance with the terms of
this Agreement, upon delivery by or on behalf of the Depository to the Trustee
of the following:
(a) a Depositor Order authorizing the execution, authentication and
delivery of such Certificates by the Trustee on behalf of the Trust;
(b) an Opinion or Opinions of Counsel addressed to the Trustee, in
form and substance required by the Placement Agreement;
(c) an Officers' Certificate of an officer of the Depositor stating
that:
(i) All representations and warranties of the Depositor contained
in this Agreement, the Transfer and Assignment Agreement and the
Servicing Agreement are true and correct and no defaults exist under
the Transfer and Assignment Agreement or the Servicing Agreement;
(ii) The Depositor is not in default under this Transfer and
Assignment Agreement, the issuance of the Certificates and the
Residual Interest will not result in any breach of any of the terms,
conditions or provisions of, or constitute a material default under,
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a material default under, this Agreement, the organizational documents
or any other constituting documents of the Depositor or any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Depositor is a party or by which it is bound, or any order of any
court or administrative agency entered in any proceeding to which the
Depositor is a party or by which it or they may be bound or to which
it or they may be subject, and that all conditions precedent provided
in this Agreement relating to the authentication and delivery of the
Certificates have been fully satisfied;
(iii) The Depositor is the owner of all Trust Property purchased
and assigned pursuant to the Transfer and Assignment Agreement and
conveyed to the Trustee for the benefit of the Certificateholders as
of the Closing Date free and clear of any Lien other than the Lien of
this Agreement, has not assigned any interest or participation in any
such Trust Property (or, if any such interest or participation has
been assigned, it has been fully released), and has the right to
convey all such Trust Property to the Trustee for the benefit of the
Certificateholders pursuant to this Agreement; and
(iv) the Depositor has conveyed to the Trustee for the benefit of
the Certificateholders, all of its right, title, and interest in all
Trust Property to be conveyed on the Closing Date free and clear of
any Lien.
(d) an Officer's Certificate dated as of the Closing Date, of an
officer of the Seller stating that:
(i) the Trust Property and files and computer records pertaining
thereto have been marked to reflect the sale thereof from the Seller
to the Depositor and the conveyance thereof by the Depositor to the
Trustee for the benefit of the Certificateholders; and
(ii) the originals of all documents required to be delivered to
the Custodian pursuant to Section 7.18 hereof have been or will be
delivered pursuant to such Section.
(e) evidence of execution of UCC-1 Financing Statements ("Financing
Statements") with respect to the Trust Property and, to the extent
available, all applicable UCC termination statements ("Termination
Statements") terminating the liens of creditors of the Seller and
presentment of such Financing Statements and Termination Statements (which
shall constitute all of the Perfection UCCs) to the proper Person for
recording to perfect the Trustee's first priority security interest in such
Trust Property conveyed on the Closing Date registered in the name of the
Trustee or its nominee and agent (a copy of the file stamped Financing
Statements and Termination Statements shall be delivered to the Custodian
in accordance with Section 7.18 hereof).
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(f) an Officer's Certificate of the Depositor to the effect that
attached thereto are true and correct copies of (i) a letter signed by DCR
confirming that the Class A Certificates have been rated at least "A," that
the Class B Certificates have been rated at least "BBB," that the Class C
Certificates have been rated at least "BB" and that the Class D
Certificates have been rated at least "B."
(g) a true and correct listing of all Receivables being conveyed to
the Trustee on the Closing Date certified by the Depositor and a
certificate of the Depositor to the effect that the information provided on
such list of Receivables is true, correct, and complete as of the Cutoff
Date and otherwise in form and substance acceptable to the Trustee.
(h) evidence that cash in the amount of the Initial Reserve Fund
Deposit has been deposited into the Reserve Fund held by the Trustee;
(i) an Officer's Certificate of an officer of the Depositor certifying
to the Trustee that each of the closing conditions set forth in the
Placement Agreement have been satisfied;
(j) evidence that the Collection Account has been established;
(k) fully executed originals of this Agreement, the Placement
Agreement, the Transfer and Assignment Agreement and the Servicing
Agreement;
(l) a description of the Receivable characteristics of all Receivables
being conveyed to the Trustee on the Closing Date substantially in the form
of Exhibit H-1 hereto, with a certification of the Depositor to the effect
that the information provided in such description is true, correct and
complete in all material respects as of the Cutoff Date;
(m) a satisfactory Accountant's Report; and
(n) evidence that cash in the amount of the Capitalized Interest
Amount has been deposited into the Capitalized Interest Account.
Section 2.12. Book-Entry Certificates. Except as otherwise provided in this
Section, each Class of Certificates in the form of one global Class A
Certificate, Class B Certificate, Class C Certificate and Class D Certificate
shall be registered in the name of the Securities Depository or its nominee and
ownership thereof shall be maintained in book-entry form by the Securities
Depository for the account of the Agent Members. Initially, each Class of
Certificates shall be registered in the name of Cede & Co., as the nominee of
The Depository Trust Company. Except as provided in this Section, the
Certificates may be transferred, in whole but not in part, only to the
Securities Depository or a nominee of the Securities Depository or to a
successor Securities Depository selected or approved by the Depositor or to a
nominee of such successor Securities Depository. Each Global certifidate shall
37
bear a legend substantially to the following effect: "Except as otherwise
provided herein, this global certificate may be transferred, in whole but not in
part, only to another nominee of the Securities Depository (as defined in this
Agreement) or to a successor Securities Depository or to a nominee or successor
Securities Depository."
Except as otherwise provided herein, the Depositor and the Trustee shall
have no responsibility or obligation with respect to (i) the accuracy of the
records of the Securities Depository or any Agent Member with respect to any
beneficial ownership interest in the Certificates, (ii) the delivery to any
Agent Member, beneficial owner of the Certificates or other Person, other than
the Securities Depository, of any notice with respect to the Certificates or
(iii) the distribution to any Agent Member, beneficial owner of the Certificates
or other Person, other than the Securities Depository, of any amount with
respect to the distribution of principal of or interest on the Certificates. So
long as Definitive Certificates for any Class of Certificates issued under this
Agreement are not issued pursuant to this Section, the Depositor and the Trustee
may treat the Securities Depository as, and deem the Securities Depository to
be, the absolute owner of the Certificates for all purposes whatsoever,
including, without limitation, (i) the distribution of principal of and interest
on such Certificates, (ii) giving notices of prepayment and other matters with
respect to such Certificates and (iii) registering transfers with respect to
such Certificates. In connection with any notice or other communication to be
provided to any Class of Certificateholders pursuant to this Agreement by the
Depositor or the Trustee with respect to any consent or other action to be taken
by such Certificateholders, the Depositor or the Trustee, as the case may be,
shall establish a record date for such consent or other action and, if the
Securities Depository shall hold all of such Certificates, give the Securities
Depository notice of such record date not less than 15 calendar days in advance
of such record date to the extent possible. Such notice to the Securities
Depository shall be given only when the Securities Depository is the sole
Certificateholder with respect to any such Class of Certificates.
If at any time the Securities Depository notifies the Depositor and the
Trustee that it is unwilling or unable to continue as Securities Depository with
respect to any or all of the Certificates of any Class or if at any time the
Securities Depository shall no longer be registered or in good standing under
the Securities Exchange Act of 1934, as amended, or any other applicable statute
or regulation and a successor Securities Depository is not appointed by the
Depositor within 90 days after the Depositor receives notice or becomes aware of
such condition, as the case may be, then the two preceding paragraphs shall no
longer be applicable and the Depositor shall execute and the Trustee shall
authenticate and deliver notes representing such Certificates as provided
otherwise in this Article II and the Trustee shall thereafter recognize the
respective Certificateholders as the record Holders of such Certificates under
this Agreement. In addition, the Depositor may determine at any time that any
Class of Certificates shall no longer be represented by global certificates and
that the provisions of the two preceding paragraphs of this Section shall no
longer apply to such Class of Certificates. In such event, the Depositor shall
execute and the Trustee shall authenticate and deliver certificates representing
such Class of Certificates as provided otherwise in this Article II.
Certificates for any Class of Certificates issued in exchange for a global
38
certificate pursuant to this Section 2.12 shall be registered in such names and
authorized denominations as the Securities Depository, pursuant to the
instructions from the Agent Members or otherwise, shall instruct the Depositor
and the Trustee. The Trustee shall promptly deliver such Certificates
representing the respective Class of Certificates to the Persons in whose names
such Certificates are so registered.
Section 2.13. Definitive Certificates. Unless any Class of Certificates is
maintained in book-entry form pursuant to Section 2.12, the Certificate
Registrar shall issue definitive certificates registered in the name or names of
the Certificateholders of such Class (the "Definitive Certificates"). Upon the
issuance of Definitive Certificates, the Trustee shall recognize the Holders of
the Definitive Certificates as Class A Certificateholders, Class B
Certificateholders, Class C Certificateholders and Class D Certificateholders,
as the case may be, hereunder.
Section 2.14. Reconveyance. In the case of any Receivable which has been
prepaid in full after the Cutoff Date and prior to the Closing Date, the
Depositor shall, on the Closing Date, deposit the Repurchase Price therefor and
for the related Financed Vehicle in the Collection Account in lieu of delivering
the Custodian File with respect to such Receivable to the Custodian or executing
any Financing Statements or Termination Statements with respect thereto.
Section 2.15. Reconveyance of Nonconforming Trust Property.
(a) Upon discovery by the Seller, the Depositor, the Trustee, the
Servicer or the Supervisory Servicer of (i) a Nonconforming Receivable or
(ii) failure to deliver (A) any document required to be in the Custodian
File or (B) the Perfection UCCs pursuant to Section 7.18 hereof, the party
discovering such breach or failure to deliver shall give prompt written
notice to the other foregoing parties. Except as specifically provided
herein or in the Servicing Agreement, neither the Supervisory Servicer nor
the Trustee has any obligation to review or monitor the Trust Property for
compliance with representations and warranties or delivery requirements. If
(i) the breach of representations or warranties causing such Receivable to
be a Nonconforming Receivable shall not have been (A) cured within thirty
days following notice thereof or (B) waived by the Trustee with
Certificateholder Approval within thirty days following notice thereof or
(ii) the failure to deliver to the Trustee the Custodian File documents or
the Perfection UCCs shall not have been cured within seven calendar days
following notice thereof, the Trustee without representation or recourse
shall, upon receipt of the Repurchase Price therefor, reconvey to the
Depositor the Receivable and other items of the related Trust Property and
the Depositor shall, upon receipt of the Repurchase Price therefor,
reconvey to the Seller the Receivable and the other items of the related
Trust Property affected by such breach or failure to deliver within five
Business Days following the earlier of (A) the end of the cure period, if
any, and (B) the receipt and deposit into the Collection Account by the
Servicer of the Repurchase Price with respect to a Nonconforming Receivable
or failure to deliver the documents described above. Any such Receivable
39
so removed shall not be deemed to be a Defaulted Receivable for purposes of
this Section 2.15. The Depositor shall be entitled to enforce the
obligations of the Seller and the applicable Dealer to repurchase such
Receivables under the Transfer and Assignment Agreement and the respective
Dealer Agreement and the Trustee is authorized to take action on behalf of
the Depositor to enforce the obligations of the Seller and the applicable
Dealer to repurchase such Receivables under the Transfer and Assignment
Agreement and the respective Dealer Agreement.
(b) The obligations of the Seller and the Depositor to (i) remove any
Receivable and the other related items of Trust Property as described in
this Section 2.15 and (ii) remit or cause the applicable Dealer to remit
the Repurchase Price with respect to a Nonconforming Receivable or as to
which a failure to deliver has occurred and is continuing shall constitute
the sole remedy, except for the indemnification provisions expressly set
forth herein, in the Servicing Agreement and in the Transfer and Assignment
Agreement, against the Seller and the Depositor for such breach or failure
to deliver available to the Trustee or the Certificateholders.
Section 2.16. Funding Events.
(a) A funding event (each a "Funding Event") shall occur upon a
Funding Date and in accordance with the requirements of this Section 2.16.
(b) During the Funding Period, the Depositor shall, on Funding Dates,
(i) acquire Subsequent Receivables and related items of the Trust Property
from the Seller pursuant to the Transfer and Assignment Agreement and (ii)
convey all of the Depositor's right, title and interest in and to such
Subsequent Receivables and related items of the Trust Property to the
Trustee on behalf of the Trust for the benefit of the Holders of the
Certificates. Such Subsequent Receivables shall be acquired at the option
of the Depositor; provided that (x) Subsequent Receivables may not be
acquired through the Pre-Funding Account if the effect of such acquisition
would be to (A) reduce the weighted average annual percentage rate of the
overall Receivables pool to less than 20.00% or (B) increase the weighted
average remaining term to maturity of the overall Receivables pool to
greater than 60 months and (y) (A) each Subsequent Receivable must have
been funded by the Seller prior to or during the month of December 1996 and
(B) the first Scheduled Payment with respect to each Subsequent Receivable
must have been received by the Seller on or after December 28, 1996 and
prior to acquisition thereof by the Depositor from the Seller and
conveyance hereunder from the Depositor to the Trustee on behalf of the
Trust.
The following procedures shall be followed to effect a Funding Event:
(i) On or before 12:00 p.m. (local Houston, Texas time) one
Business Day prior to the Funding Date, the Depositor shall deliver,
or cause to be delivered, to the Trustee, fully executed documents as
follows:
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(A) Assignment of the Seller (in the form of Exhibit A to
the Transfer and Assignment Agreement) and Assignment of
Depositor (in the form of Exhibit I hereto) with the Schedule of
Receivables to be conveyed on such Funding Date attached to such
assignment;
(B) Certificate of Delivery (in the form of Exhibit E to the
Transfer and Assignment Agreement);
(C) Notice of Funding (in the form of Exhibit F hereto);
(D) Officer's Certificate (in the form of Exhibit G hereto);
and
(E) Executed Termination Statements.
(ii) The Depositor shall package and forward or cause to be
packaged and forwarded to the Trustee for receipt on or before the
date which is no later than ten (10) Business Days following the
Funding Date, the following documents with respect to each Subsequent
Receivable assigned and conveyed on such Funding Date:
(A) the sole original Contract evidencing each such
Subsequent Receivable; and
(B) an original certificate of title or other evidence of
lien issued by the applicable Department of Motor Vehicles
("DMV") for each Financed Vehicle, indicating the Seller's
position as lienholder or, in the case of a recently originated
loan for which the Seller has not yet received a definitive
certificate of title or other evidence of lien from the
applicable DMV, a copy of a properly completed and signed
application to such DMV requesting the issuance of a certificate
of title or other evidence of lien noting the Seller's position
as lienholder.
(iii) The Trustee shall, on the day of its receipt, (A) confirm
receipt of the documents listed in Section 2.16(b)(i) and (B)
acknowledge receipt but have no duty to confirm the contents of the
documents listed in Section 2.16(b)(ii). The Trustee will also stamp
the Contracts evidencing the Subsequent Receivables to indicate the
assignment and pledge of such Subsequent Receivables with language
substantially in the form set forth in Section 7.18(b).
(iv) The Depositor shall forward to the Rating Agency, the
Servicer and the Placement Agent and its counsel via facsimile on or
before the Funding Date, followed by overnight courier to be received
by the Rating Agency, the Servicer and the Placement Agent and its
counsel no later than one Business Day after the Funding Date, copies
of the documents specified in Section 2.16(b)(i).
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(v) Upon satisfaction of the above requirements with respect to
events to occur on or before 12:00 p.m. EST or EDT, as applicable, of
the Funding Date, the Trustee shall, on the Funding Date:
(A) withdraw funds from the Pre-Funding Account in an amount
equal to 5% of the Aggregate Receivables Balance for the
Subsequent Receivables acquired on such Funding Date and on
behalf of the Depositor shall transfer such funds to the Reserve
Fund; and
(B) withdraw funds from the Pre-Funding Account in an amount
equal to the Receivables Purchase Price (reduced by amounts
transferred to the Reserve Fund under Section 2.16(b)(v)(A)) for
the Subsequent Receivables acquired on such Funding Date and
forward such funds to the Depositor or its designee, by federal
wire transfer funds, pursuant to the written directions provided
to the Trustee in the Notice of Funding.
(vi) On or before each Funding Date, the Depositor shall deliver
or cause to be delivered to the Placement Agent, its counsel, the
Trustee and the Rating Agency a receivables characteristics report
substantially in the form of Exhibit H-2 hereto with respect to all
Receivables acquired on and prior to such Funding Date.
(vii) With respect to each Funding Date, the Depositor shall
cause to be delivered to the Trustee and the Rating Agency within two
days following the Funding Date, an Accountant's Report as described
in paragraph (b) of the definition thereof.
(viii) With respect to each calendar month or portion thereof
during the Funding Period, the Depositor shall cause to be delivered
to the Trustee and the Rating Agency within three days of the end of
said month, an Accountant's Report as described in paragraph (c) of
the definition thereof.
(ix) Within five days after the date of the final Funding Event,
the Depositor shall cause to be delivered to the Trustee and the
Rating Agency, an Accountant's Report as described in paragraph (d) of
the definition thereof with respect to all Funding Events.
(c) Funds on deposit in the Pre-Funding Account after the termination
of the Funding Period in an amount representing the amount deposited
therein on the Closing Date less the aggregate principal balance of
Subsequent Receivables conveyed to the Trust shall be used for the purpose
of reducing the Aggregate Current Stated Principal Balance of the
Certificates in accordance with Sections 5.05(c), 5.10 and 5.11(a) hereof.
Any amounts distributable to the Holders of the Certificates from the
remaining balance in the Pre-Funding Account shall be distributed on the
Distribution Date immediately following the termination of the Funding
Period. Any remaining balance in the Pre-Funding Account shall be
transferred to the Revenue Fund.
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Section 2.17. Grantor Trust Provisions. The Depositor and the
Certificateholders, by acceptance of the Certificates, each agree and the
Trustee acknowledges that the Trust is intended to be treated as a grantor trust
for federal income tax purposes. In furtherance of the foregoing, the Trustee
(at the direction of the Depositor) and the Depositor shall take, or refrain
from taking, all such action as is necessary to maintain the status of the Trust
as a grantor trust. After the Closing Date, neither the Trustee, nor the
Depositor shall (a) acquire any assets other than pursuant to Section 2.16, and
transfers from the Reserve Fund or the Capitalized Interest Account pursuant to
Section 5.07 and 5.07A, respectively, (b) dispose of any portion of the Trust
other than as provided in Sections 2.15 and Article VI, or (c) engage in any
activity which would, directly or indirectly, adversely affect the status of the
Trust as a grantor trust. Notwithstanding anything herein to the contrary, the
Trustee shall have no authority to perform any act which, if consummated, would
cause the Trust to fail to be characterized as a trust for federal income tax
purposes.
ARTICLE III
COVENANTS; TRUST PROPERTY; REPRESENTATIONS; WARRANTIES
Section 3.01. Performance of Obligations.
(a) The Depositor will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any instrument included in the Trust
Property, or which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such instrument, except as expressly provided in this
Agreement.
(b) The Depositor may contract with other Persons to assist it in
performing its duties hereunder, and any performance of such duties (other
than the execution of Officers' Certificates of the Depositor and Depositor
Orders by a Person identified to the Trustee in an Officers' Certificate of
the Depositor) shall be deemed to be action taken by the Depositor. To the
extent that the Depositor contracts with other Persons which include or may
include the furnishing of reports, notices or correspondence to the
Trustee, the Depositor shall identify such Persons in a written notice to
the Trustee and the Supervisory Servicer.
(c) The Depositor will characterize (i) the sale of the Receivables by
the Seller to the Depositor pursuant to the Transfer and Assignment
Agreement as an absolute assignment for financial accounting purposes and
for federal income tax purposes, (ii) the conveyance of the Trust Property
by the Depositor to the Trustee under this Agreement as an absolute
assignment for financial accounting purposes and as a sale for federal
income tax purposes, and (iii) the Certificates as an undivided interest in
the Trust Property for federal income tax purposes. The Depositor will file
all required returns, reports, schedules and supplements thereto in a
manner consistent with such characterizations.
43
(d) The Depositor covenants to use its best efforts to pay all taxes
or other similar charges levied by any governmental authority with regard
to the Trust Property, except to the extent that the validity or amount of
such taxes is contested in good faith, via appropriate proceedings and with
adequate reserves established and maintained therefor in accordance with
generally accepted accounting principles.
(e) The Depositor hereby assumes liability for all liabilities
associated with the Trust Property or created under this Agreement,
including but not limited to any obligation arising from the breach or
inaccuracy of any representation, warranty or covenant set forth herein.
Notwithstanding the foregoing, the Depositor has, and shall have, no
liability with respect to the distribution of principal and interest on the
Certificates, except as otherwise provided in this Agreement.
Notwithstanding anything to the contrary herein, the liability of the
Depositor under this Section 3.01(e) is intended to be the same direct and
primary liability as would apply to the general partner of a limited
partnership organized under the laws of the State of Delaware. Creditors of
the Depositor are intended beneficiaries of the assumption of liability
hereunder.
Section 3.02. Negative Covenants. The Depositor will not:
(a) sell, transfer, exchange or otherwise dispose of any portion of
its interest in the Trust Property except as expressly permitted by this
Agreement;
(b) claim any credit on, or make any deduction from, the principal of
or interest on any of the Certificates by reason of the payment of any
taxes levied or assessed upon any portion of the Trust Property;
(c) dissolve or liquidate in whole or in part, except (i) as permitted
in paragraph (ii) of Section 3.10(b) or (ii) with the prior written consent
of the Trustee, Certificateholder Approval and prior written confirmation
from the Rating Agency that the ratings on the Class A Certificates, the
Class B Certificates, the Class C Certificates and the Class D Certificates
will not be reduced or withdrawn;
(d) permit the validity or effectiveness of this Agreement or any
conveyance hereunder to be impaired, or permit the Lien of this Agreement
to be amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations under
this Agreement, except as may be expressly permitted hereby;
44
(e) permit any Lien (other than the Lien of this Agreement) to be
created on or extend to or otherwise arise upon or burden the Trust
Property or any part thereof or any interest therein or the proceeds
thereof;
(f) permit the Lien of this Agreement not to constitute a valid first
priority, perfected security interest in the Trust Property;
(g) incur, assume or guarantee any indebtedness of any Person secured
by any Receivables conveyed under this Agreement, except (i) for such
obligations as may be incurred by the Depositor in connection with the
issuance of the Certificates pursuant to this Agreement and (ii) as
permitted herein; or
(h) amend or otherwise modify the Transfer and Assignment Agreement or
the Servicing Agreement in any manner that materially adversely affects the
rights of the Certificateholders hereunder unless (i) with respect to any
amendment that materially and adversely affects the rights of the
Certificateholders, such amendment is consented to by the
Certificateholders constituting Certificateholder Approval, and (ii), as a
result of the amendment, there is no adverse effect on the ratings of the
Class A Certificates, the Class B Certificates, the Class C Certificates
and the Class D Certificates by the Rating Agency.
Section 3.03. Money for Certificate Distributions.
(a) All distributions with respect to any Certificates which are to be
made from amounts withdrawn from the Revenue Fund pursuant to Section 5.05
hereof shall be punctually made on behalf of the Depositor by the Trustee
or by a Disbursing Agent, and no amounts so withdrawn from an Account for
distributions with respect to Certificates shall be paid over to the
Depositor under any circumstances except as provided in this Section 3.03
and Article V hereof.
(b) When there shall be a Disbursing Agent that is not also the
Certificate Registrar, the Depositor shall furnish, or cause the
Certificate Registrar to furnish, no later than the fifth calendar day
after each Record Date, a list, in such form as such Disbursing Agent may
reasonably require, of the names and addresses of the Certificateholders
and of the number of individual Certificates held by each such
Certificateholder.
(c) Whenever there shall be a Disbursing Agent other than the Trustee,
the Depositor will, on or before the Business Day next preceding each
Distribution Date, direct the Trustee to deposit with such Disbursing Agent
an aggregate sum sufficient to distribute the amounts then becoming due (to
the extent funds are then available for such purpose in the Revenue Fund),
such sums to be held in trust for the benefit of the Persons entitled
thereto pursuant to this Agreement. Any moneys deposited with a Disbursing
Agent in excess of an amount sufficient to distribute the amounts then
becoming due on the Certificates with respect to which such deposit was
made shall, upon Depositor Order, be paid over by such Disbursing Agent to
the Trustee for application in accordance with Article V hereof.
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(d) The initial Disbursing Agent shall be the Trustee. Any additional
or successor Disbursing Agent shall be appointed by Depositor Order. The
Depositor shall not appoint any Disbursing Agent that is not, at the time
of such appointment, a depository institution or trust company incorporated
under the laws of the United States of America or any State thereof and
subject to supervision and examination by federal or state banking
authorities.
(e) The Depositor will cause each Disbursing Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Disbursing Agent shall agree with the Trustee, and if the Trustee acts as
Disbursing Agent, it hereby so agrees, subject to the provisions of this
Section 3.03, that such Disbursing Agent will:
(i) allocate all sums received for distribution to the Holders
for which it is acting as Disbursing Agent on each Distribution Date
among such Holders in the proportion specified in the applicable
statement to Certificateholders in the form of Exhibit B to the
Servicing Agreement to the extent permitted by applicable law;
(ii) hold all sums held by it for the distribution of amounts due
with respect to the Certificates in trust for the benefit of the
Persons entitled thereto until such sums shall be distributed to such
Persons or otherwise disposed of as herein provided and distribute
such sums to such Persons as herein provided;
(iii) if such Disbursing Agent is not the Trustee, immediately
resign as a Disbursing Agent and forthwith distribute to the Trustee
all sums held by it in trust for distribution with respect to the
Certificates if at any time it ceases to meet the standards set forth
in clause (d) above required to be met by a Disbursing Agent at the
time of its appointment;
(iv) if such Disbursing Agent is not the Trustee, give the
Trustee notice of any Event of Servicing Default coming to its
attention in the making of any distributions required to be made with
respect to the Certificates for which it is acting as Disbursing
Agent;
(v) if such Disbursing Agent is not the Trustee, at any time
during the continuance of any such Event of Servicing Default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Disbursing Agent; and
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(vi) comply with all requirements of the Code and all regulations
thereunder, with respect to the withholding from any distribution made
by it on any Certificates of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in
connection therewith; provided, however, that with respect to
withholding and reporting requirements applicable to original issue
discount (if any) on the Certificates, the Disbursing Agent shall have
first provided the calculations pertaining thereto to the Trustee.
(f) The Depositor may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, by
Depositor Order direct any Disbursing Agent, if other than the Trustee, to
pay to the Trustee all sums held in trust by such Disbursing Agent, such
sums to be held by the Trustee upon the same terms as those upon which such
sums were held by such Disbursing Agent; and upon such payment by any
Disbursing Agent to the Trustee, such Disbursing Agent shall be released
from all further liability with respect to such money.
(g) Any money held by the Trustee or any Disbursing Agent in trust for
the distribution of any amount distributable with respect to any
Certificate shall be held in a non-interest bearing trust account, and if
the same remains unclaimed for two years after such amount has become due
to the Certificateholder, it shall be discharged from such trust and paid
to the Depositor without any further action by any Person; and the
Certificateholder of such Certificate shall thereafter, as an unsecured
general creditor, look only to the Depositor for payment thereof (but only
to the extent of the amounts so paid to the Depositor), and all liability
of the Trustee or such Disbursing Agent with respect to such trust money
shall thereupon cease. The Trustee may adopt and employ, at the expense of
the Depositor, any reasonable means of notification of such distribution
(including, but not limited to, mailing notice of such distribution to
Certificateholders whose Certificates have been called but have not been
surrendered for prepayment or whose right to or interest in moneys due and
distributable but not claimed is determinable from the records of the
Trustee or any Disbursing Agent, at the last address of record for each
such Certificateholder).
Section 3.04. Restriction of Depositor Activities. Until the date that is
91 days after the distribution of all moneys on the Certificates, the Depositor
will not, except as permitted in its Certificate of Incorporation, on or after
the date of execution of this Agreement, (i) engage in any business or
investment activities other than those necessary for, incident to, connected
with or arising out of, owning and conveying the Trust Property to the Trustee
on behalf of the Trust for the benefit of the Certificateholders, or
contemplated hereby, in the Transfer and Assignment Agreement and the Servicing
Agreement, (ii) incur any indebtedness secured in any manner by, or having any
claim against, the Trust Property, the Residual Interest or arising under the
Servicing Agreement, the Trustee fee letter or the Supervisory Servicer fee
letter, (iii) incur any other indebtedness, (iv) amend, or propose to the
shareholders of the Depositor for their consent any amendment of, the
Depositor's Certificate of Incorporation at the date of this Agreement (or, if
the Depositor shall be a successor to the Person named as the Depositor in the
47
first paragraph of this Agreement, amend, consent to amendment or propose any
amendment of, the governing instruments of such successor), without giving
notice thereof in writing, not less than 30 nor more than 90 days prior to the
date on which such amendment is to become effective, to the Trustee by delivery
of an Officer's Certificate and obtaining the written consent thereto of the
Rating Agency (or any successor to the business thereof) and the
Certificateholders constituting Certificateholder Approval.
Section 3.05. Protection of Trust Property.
(a) The Depositor will from time to time execute and deliver, all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or
advisable to:
(i) convey more effectively all or any portion of the Trust
Property,
(ii) maintain, preserve or enforce the terms and provisions of
this Agreement or carry out more effectively the purposes hereof,
(iii) perfect, publish notice of, or protect the validity of, any
conveyance made or to be made by this Agreement,
(iv) enforce any of the Receivables; or
(v) preserve and defend title to any Receivable or other
instrument included in the Trust Property and the rights of the
Trustee and of the Certificateholders in such Receivable or other
instrument against the claims of all persons and parties.
The Depositor shall deliver or cause to be delivered to the Trustee
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Depositor shall cooperate fully with
the Trustee in connection with the obligations set forth above and will
execute any and all documents reasonably required to fulfill the intent of
this Section 3.05.
(b) The Depositor hereby irrevocably appoints the Trustee as its agent
and attorney-in-fact (such appointment being coupled with an interest) to
execute, upon the Depositor's failure to do so, any financing statement,
continuation statement or other instrument, document, certificate or
agreement required pursuant to this Section 3.05 in the time and manner
specified in the Opinion of Counsel delivered to the Trustee pursuant to
Section 3.06 hereof; provided, however, that such designation shall not be
deemed to create any duty in the Trustee to monitor the compliance of the
Depositor with the foregoing covenants; and provided further, however, that
48
the duty of the Trustee to execute any instrument required pursuant to this
Section 3.05 shall arise only if the Trustee has actual knowledge of any
default by the Depositor in complying with the provisions of Section
3.05(a) and the Trustee shall have previously received a file stamped copy
of the related original document or financing statement. The Depositor
shall cooperate with the Trustee and provide to the Trustee any
information, documents or instruments with respect to such financing
statement, continuation statement or other instrument that the Trustee may
reasonably require. For purposes of this Section 3.05(b), the Trustee will
not be deemed to have actual knowledge of any such default if the Trustee
has not, but should have, received an Opinion of Counsel pursuant to
Section 3.06 addressing the facts surrounding such default.
(c) The Trustee shall not remove any portion of the Trust Property
that consists of money or is evidenced by an instrument, note or other
writing from the jurisdiction in which it was held at the date the most
recent Opinion of Counsel was delivered pursuant to Section 3.06 (or from
the jurisdiction in which it was held as described in the Opinion of
Counsel delivered at the Closing Date pursuant to Section 2.11(b), if no
Opinion of Counsel has yet been delivered pursuant to Section 3.06) unless
the Trustee shall have first received an Opinion of Counsel to the effect
that the lien created by this Agreement with respect to such property will
continue to be maintained after giving effect to such action or actions.
(d) Within thirty (30) days after the Seller or the Depositor makes
any change in its or their name, identity or corporate structure which
would make any financing statement or continuation statement filed in
accordance with paragraph (a) above seriously misleading within the meaning
of Section 9-402(7) of the UCC as in effect in Colorado or wherever else
necessary or appropriate under applicable law, or otherwise impair the
perfection of the security interest referred to in Article II hereof, the
Depositor shall give or cause to be given to the Trustee written notice of
any such change and shall file such financing statements or amendments as
may be necessary to continue the perfection of the Trustee's security
interest in the Receivables, the related Trust Property and the proceeds
thereof.
(e) The Depositor shall give the Trustee (and the Depositor shall
require the Servicer to give the Trustee) prompt written notice of any
relocation of any office from which it services Receivables or keeps
records concerning Receivables or of its principal executive office and
whether, as a result of such relocation, the applicable provisions of
relevant law or 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 file such financing statements or amendments
as may be necessary to continue the perfection of the Trustee's security
interest in the Receivables and the proceeds thereof. The Servicer shall at
all times maintain each office from which it services Receivables and its
principal executive office within the United States of America.
49
Section 3.06. Opinions as to Trust Property. If the Opinion of Counsel
delivered at the Closing Date pursuant to Section 2.11(b) specifies any future
action that the Depositor must take to maintain the conveyance lien and security
interest of the Agreement, no later than the time so specified in such Opinion
(or any subsequent Opinion of Counsel delivered pursuant to this Section 3.06),
and in any event within three months prior to the fifth anniversary of the
Closing Date, the Depositor shall furnish to the Trustee an Opinion of Counsel
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and re-filing of this Agreement,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and continuation
statements as is necessary to maintain the lien and security interest created by
this Agreement with respect to the Trust Property and reciting the details of
such action. The Depositor shall also provide the Trustee with a file stamped
copy of any document or instrument filed as described in such Opinion of Counsel
contemporaneously with the delivery of such Opinion of Counsel. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and re-filing of
this Agreement, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Agreement with respect to the
Trust Property. If the Opinion of Counsel delivered to the Trustee hereunder
specifies future action to be taken by the Depositor, the Depositor shall
furnish a further Opinion of Counsel no later than the time so specified in such
former Opinion to the effect required hereby.
Section 3.07. Statement as to Compliance. The Depositor will deliver to the
Trustee, the Supervisory Servicer and the Rating Agency, within 90 days after
the end of each fiscal year, an Officer's Certificate stating, as to the signer
thereof, that, (a) a diligent review of the activities of the Depositor during
the preceding calendar year and of its performance under this Agreement has been
made under such officer's supervision, (b) to the best of such officer's
knowledge, based on such review, the Depositor 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 officer and the nature and status thereof and remedies therefor being
pursued, and (c) no event has occurred and is continuing which is, or after
notice or lapse of time or both would become, an Event of Servicing Default or,
if such an event has occurred and is continuing, specifying each such event
known to him or her and the nature and status thereof and remedies therefor
being pursued.
Section 3.08. Limitations on Liens. Except as provided in Section 3.04
hereof, the Depositor will not create, incur or suffer, or permit to be created
or incurred or to exist, any Lien on any of the Trust Property.
Section 3.09. Recording. The Depositor will, upon the Closing Date and
thereafter from time to time, cause financing statements and such other
instruments as may be required with respect thereto (collectively called the
"Recordable Documents") to be filed, registered and recorded as may be required
by present or future law (with file stamped copies thereof delivered to the
Trustee), publish notice thereof and create, perfect and protect the lien hereof
50
upon the Receivables and the Trust Property and publish notice of and protect
the validity of this Agreement. The Depositor will, from time to time, perform
or cause to be performed any other act as required by law and will execute or
cause to be executed any and all further instruments (including financing
statements, continuation statements and similar statements with respect to any
of said documents with file stamped copies thereof delivered to the Trustee)
that are necessary for such creation, perfection, publication and protection.
The Depositor shall pay, or shall cause to be paid, all filing, registration and
recording taxes and fees incident thereto, and all expenses, taxes and other
governmental charges incident to or in connection with the preparation,
execution, delivery or acknowledgment of the Recordable Documents, any
instruments of further assurance, and the Certificates.
Section 3.10. Agreements Not to Institute Bankruptcy Proceedings;
Additional Covenants.
(a) The Depositor shall not, without the unanimous vote of its entire
board of directors, voluntarily institute any proceedings to adjudicate the
Depositor a bankrupt or insolvent, consent to the institution of bankruptcy
or insolvency proceedings against the Depositor, file a petition seeking or
consenting to reorganization or relief under any applicable federal or
state law relating to bankruptcy, consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Depositor or a substantial part of its property or admit its inability
to pay its debts generally as they become due or authorize any of the
foregoing to be done or taken on behalf of the Depositor.
(b) So long as any of the Certificates are Outstanding:
(i) The Depositor will keep in full effect its existence, rights
and franchises as a corporation under the laws of the State of
Delaware.
(ii) The Depositor shall not consolidate or merge with or into
any other entity or convey or transfer its properties and assets
substantially as an entirety to any entity unless (A) the entity (if
other than the Depositor) formed or surviving such consolidation or
merger, or that acquires by conveyance or transfer the properties and
assets of the Depositor substantially as an entirety, shall be
organized and existing under the laws of the United States of America
or any State thereof or the District of Columbia as a special purpose
bankruptcy remote entity, and shall expressly assume in form
satisfactory to the Rating Agency, the Trustee and the
Certificateholders constituting Certificateholder Approval the
obligation to make due and punctual distributions of principal and
interest on the Certificates then outstanding and the performance of
every covenant on the part of the Depositor to be performed or
observed pursuant to the Agreement, (B) the Depositor shall have
delivered to the Rating Agency and the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer complies with this
Agreement and (C) the Depositor shall have obtained prior written
confirmation from the Rating Agency that the ratings on the Class A
Certificates, the Class B Certificates, the Class C Certificates and
the Class D Certificates will not be reduced or withdrawn.
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(iii) The funds and other assets of the Depositor shall not be
commingled with those of any other Person.
(iv) The Depositor shall not be, become or hold itself out as
being liable for the debts of any other Person.
(v) The Depositor shall not form, or cause to be formed, any
subsidiaries, and the Depositor currently has no subsidiaries.
(vi) The Depositor shall act solely in its own name and through
its duly authorized officers or agents in the conduct of its business,
and shall conduct its business so as not to mislead others as to the
identity of the entity with which they are concerned. The Depositor
shall not have any employees.
(vii) The Depositor shall maintain its records and books of
account and shall not commingle its records and books of account with
the records and books of account of any other Person. The books of the
Depositor may be kept (subject to any provision contained in the
applicable statutes) inside or outside the State of Delaware at such
place or places as may be designated from time to time by the board of
directors or in the bylaws of the Depositor.
(viii) All actions of the Depositor shall be taken by a duly
authorized officer of the Depositor.
(ix) The Depositor shall not amend, alter, change or repeal any
provision contained in this Section 3.10(b) without (A) the prior
written consent of the Trustee and Certificateholder Approval and (B)
prior written confirmation from the Rating Agency (copies of which
shall be provided to the Trustee) that such amendment, alteration,
change or repeal will have no adverse effect on the ratings assigned
to the Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D Certificates.
(x) The Depositor shall not amend its Certificate of
Incorporation or bylaws without first obtaining Certificateholder
Approval.
(xi) The Depositor shall not dissolve or liquidate, in whole or
in part, except with Certificateholder Approval, with the unanimous
vote of its entire Board of Directors, including the Independent
Director (as defined in the Certificate of Incorporation of the
Depositor) and with prior written confirmation from the Rating Agency
that the ratings on the Class A Certificates, the Class B
Certificates, the Class C Certificates and the Class D Certificates
will not be reduced or withdrawn.
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(xii) So long as the Certificates are outstanding, the Depositor
shall have at least two Independent Directors. An Independent Director
shall be any person who (A) is not and for the prior five years has
not been (1) a stockholder, officer, director, partner or employee or
a significant customer, creditor, supplier or independent contractor
of the Depositor, its ultimate parent or any subsidiaries or
affiliates thereof, or (2) a member of the immediate family of any
person described above, and (B) does not directly or indirectly own
any class of voting stock of the Depositor or any of its affiliates.
As used herein, the term "affiliate" means any person controlling,
under common control with, or controlled by the person in question,
and the term "control" means the possession, directly or indirectly,
of the power to direct or the cause the direction of the management
and policies of a person, whether through ownership of voting
securities, by contract or otherwise. As used herein, the term
"significant" means any person described above (A) who, in the
preceding fiscal year, received compensation from the Depositor, its
ultimate parent or any subsidiaries or affiliates thereof, in excess
of 5% of such person's consolidated gross revenues and who reasonably
expects to receive revenues from the Depositor, its ultimate parent or
any subsidiaries or affiliates thereof, in the current fiscal year in
excess of such amount, or (B) from whom, in the preceding fiscal year,
the Depositor, its ultimate parent or any subsidiaries or affiliates
thereof, received revenues in excess of 5% of such person's
consolidated gross revenues and from whom the Depositor, its ultimate
parent or any subsidiaries or affiliates thereof, reasonably expects
to receive revenues in excess of such amount in the current fiscal
year.
If any Independent Director resigns, dies or becomes
incapacitated, or such position is otherwise vacant, no action
requiring the unanimous affirmative vote of the Board of Directors of
the Depositor shall be taken until a successor Independent Director is
elected and qualified and approves such action. In the event of the
death, incapacity, or resignation of either Independent Director, or a
vacancy for any other reason, a successor Independent Director shall
be appointed by the remaining directors. Pursuant to the terms of the
Depositor's Certificate of Incorporation, the Independent Director, in
voting on matters subject to the approval of the Board of Directors,
shall at all times take into account the interests of creditors of the
Depositor. Neither Independent Director may be removed unless his or
her successor is appointed.
(xiii) The Depositor shall undertake the transaction contemplated
under this Agreement as principal rather than as agent of the Seller
or any other Person.
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(xiv) The Depositor maintains and will maintain separate records
and books of account from the Seller and the formalities of the form
of its organization.
(xv) The annual financial statements of the Seller and the
Depositor, if any, will disclose the effects of these transactions in
accordance with generally accepted accounting principles. Any
consolidated financial statements which consolidate the assets and
earnings of the Seller with those of the Depositor will contain a
footnote stating that the assets of the Depositor will not be
available to creditors of the Seller.
(xvi) Other than certain Costs of Issuance, certain other costs
and expenses related to the issuance of the Certificates and amounts
set forth in Section 7.07(a), the Seller shall not pay the Depositor's
expenses, guarantee the Depositor's obligations or advance funds to
the Depositor for payment of expenses.
(xvii) All business correspondences of the Depositor are and will
be conducted in the Depositor's own name.
(xviii) The Seller does not act nor will act as agent of the
Depositor and the Depositor does not and will not act as agent of the
Seller.
Section 3.11. Providing of Notice. The Depositor, upon learning of any
failure on its part to observe or perform in any material respect any covenant,
representation or warranty of the Depositor set forth in this Agreement or the
Transfer and Assignment Agreement, or of any failure on the part of the Seller
to observe or perform in any material respect any covenant, representation or
warranty of the Seller set forth in the Transfer and Assignment Agreement, shall
promptly notify the Trustee, the Supervisory Servicer and the Seller of such
failure.
Section 3.12. Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the
Certificateholders and the Rating Agency that as of the Closing Date and each
Funding Date:
(a) The Depositor is a corporation duly organized under the laws of
the State of Delaware and is validly existing and in good standing under
the laws of the State of Delaware, has full power and authority to execute
and deliver this Agreement and to perform the terms and provisions hereof
and thereof, has full power and authority to own and convey 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 Trust Property;
(b) All necessary corporate, regulatory or other action has been taken
by the Depositor to authorize and empower the Depositor, and the Depositor
has full corporate power and authority, to execute, deliver and perform
this Agreement, the Transfer and Assignment Agreement and the Servicing
Agreement, and the Depositor has full corporate power and is duly
authorized to execute, deliver and perform its obligations under this
Agreement, the Transfer and Assignment Agreement and the Servicing
Agreement;
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(c) This Agreement, the Transfer and Assignment Agreement and the
Servicing Agreement have been duly executed and delivered and the execution
and delivery of this Agreement, the Transfer and Assignment Agreement and
the Servicing Agreement by the Depositor and its performance and compliance
with the terms hereof and thereof will not violate the Depositor's
Certificate of Incorporation or bylaws or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any contract, indenture, loan, credit
agreement or any other agreement or instrument to which the Depositor is a
party or which may be applicable to the Depositor or any of its assets;
(d) This Agreement, the Transfer and Assignment Agreement and the
Servicing Agreement constitute valid, legal and binding obligations of the
Depositor, enforceable in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the enforcement of creditors' rights generally and
to general principles of equity;
(e) The Depositor is not in violation of, and the execution, delivery
and performance of this Agreement, the Transfer and Assignment Agreement
and the Servicing Agreement by the Depositor will not constitute a
violation with respect to, any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or governmental
agency, which violation might have consequences that would materially and
adversely affect the condition (financial or other) or operations of the
Depositor or its properties or might have consequences that would
materially affect the performance of its duties hereunder or thereunder;
(f) No proceeding of any kind, including, but not limited to,
litigation, arbitration, judicial or administrative, is pending or, to the
Depositor's knowledge, threatened against or contemplated by the Depositor
which would under any circumstance have an adverse effect on the execution,
delivery, performance or enforceability of this Agreement, the Transfer and
Assignment Agreement and the Servicing Agreement;
(g) Each of the representations and warranties of the Depositor set
forth in the Transfer and Assignment Agreement, the Placement Agreement and
the Servicing Agreement is true and correct as of the Closing Date and each
such representation and warranty is hereby incorporated in this Agreement
as if set forth herein in full.
(h) The Transfer and Assignment Agreement and all related documents
describe the transfer of the Receivables from the Seller on the Closing
Date and the Funding Dates as an absolute assignment by the Seller to the
Depositor and evidence the clear intention by the Seller and the Depositor
to effectuate an absolute assignment of such Receivables.
55
(i) The consideration received by the Seller for the Receivables is or
will be paid in full to the Seller immediately upon their transfer, and no
provision exists whereby the consideration will be modified after the date
of transfer. The consideration paid or to be paid for the Receivables is
equivalent to the fair market value of the Receivables transferred to the
Depositor.
(j) The Depositor has not incurred debt or engaged in activities not
related to the transactions contemplated hereunder except as permitted by
its Certificate of Incorporation or Section 3.04 hereof.
(k) The Depositor is not insolvent or did not become insolvent as a
result of the conveyance pursuant to this Agreement; the Depositor is not
engaged and is not about to engage in any business or transaction for which
any property remaining with the Depositor is unreasonably small capital or
for which the remaining assets of the Depositor are unreasonably small in
relation to the business of the Depositor or the transaction; the Depositor
does not intend to incur, and does not believe or reasonably should not
have believed that it would incur, debts beyond its ability to pay as they
become due; and the Depositor has not made a transfer or incurred an
obligation and does not intend to make such a transfer or incur such an
obligation with actual intent to hinder, delay or defraud any entity to
which the Depositor was or became, on or after the date that such transfer
was made or such obligation was incurred, indebted. The consideration
received by the Depositor for the Trust Property is being paid in full to
the Depositor immediately upon transfer, and no provision exists whereby
the consideration will be modified after the date of transfer. The
consideration paid for the Trust Property is equivalent to the fair market
value thereof.
(l) The sale of the Trust Property by the Seller to the Depositor
pursuant to the Transfer and Assignment Agreement is an absolute assignment
for financial accounting purposes and for federal income tax purposes, (ii)
the conveyance of the Receivables by the Depositor pursuant to the terms of
this Agreement is an absolute assignment for financial accounting and
federal income tax purposes, and (iii) the Certificates represent an
undivided interest in the Trust Property for federal income tax purposes.
(m) As of the Closing Date, the Aggregate Receivable Balance is
$17,999,999.18.
(n) The legal name of the Depositor is as set forth in this Agreement;
the Depositor has no trade-names, fictitious names, assumed names or "doing
business as" names.
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(o) The principal place of business of the Depositor and the chief
executive office of the Depositor are located at the address set forth in
this Agreement and there are no other such locations.
(p) There are no injunctions, writs, restraining orders or any other
orders of any nature to which the Depositor is subject which would
adversely affect the Depositor's performance of this Agreement, the
Servicing Agreement or the transactions contemplated thereby.
(q) The Depositor has filed, on a timely basis, all required federal
and state tax returns.
Section 3.13. Representations and Warranties of the Trustee. The Trustee
hereby represents and warrants to the Rating Agency and the Certificateholders
that as of the Closing Date and each Funding Date:
(a) The Trustee has been duly organized and is validly existing as a
national banking association under the laws of the United States;
(b) The Trustee has full power and authority and legal right to
execute, deliver and perform its obligations under this Agreement and has
taken all necessary action to authorize the execution, delivery and
performance by it of this Agreement;
(c) This Agreement has been duly executed and delivered by the Trustee
and constitutes the 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,
reorganization, insolvency, liquidation, moratorium, fraudulent conveyance,
or similar laws affecting creditors' or creditors of banks' rights and/or
remedies generally, by public policy, or by general principles of equity,
(regardless of whether such enforcement is sought in a proceeding in equity
or at law);
(d) The execution, delivery and performance of this Agreement by the
Trustee will not constitute a violation with respect to, any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency binding on the Trustee, which
violation might have consequences that would materially and adversely
affect the performance of its duties under this Agreement; and
(e) No proceeding of any kind, including, but not limited to,
litigation, arbitration, judicial or administrative, is pending or, to the
knowledge of the Trustee's executing officer, threatened against or
contemplated by the Trustee which would have a reasonable likelihood of
having an adverse effect on the execution, delivery, performance or
enforceability of this Agreement by or against the Trustee.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 4.01. Servicing Agreement.
(a) The Servicing Agreement, duly executed counterparts of which have
been filed with the Trustee, sets forth the covenants and obligations of
the Servicer and the Supervisory Servicer with respect to the Trust
Property and other matters addressed in the Servicing Agreement, and
reference is hereby made to the Servicing Agreement for a detailed
statement of said covenants and obligations of the Servicer and the
Supervisory Servicer thereunder. The Depositor agrees that the Trustee, in
its capacity as Trustee hereunder or (to the extent required by law) in the
name of the Depositor, may (but is not required to) enforce all rights of
the Depositor and all obligations of the Servicer and the Supervisory
Servicer under and pursuant to the Servicing Agreement for and on behalf of
the Certificateholders whether or not the Depositor is in default
hereunder.
(b) The Depositor shall, at its own expense, duly and punctually
perform and observe each of its obligations to the Servicer and Supervisory
Servicer under the Servicing Agreement in accordance with the terms
thereof. In addition, promptly following a request from the Trustee to do
so and at the Depositor's own expense, the Depositor shall take all such
lawful action as the Trustee may request to compel or secure the
performance and observance by the Servicer or Supervisory Servicer of each
of its obligations to the Depositor under or in connection with the
Servicing Agreement, in accordance with the terms thereof, and in effecting
such request shall exercise any and all rights, remedies, powers and
privileges lawfully available to the Depositor under or in connection with
the Servicing Agreement to the extent and in the manner directed by the
Trustee, including, without limitation, the transmission of notices of
default on the part of the Servicer or Supervisory Servicer thereunder and
the institution of legal or administrative actions or proceedings to compel
or secure performance by the Servicer or Supervisory Servicer of each of
its obligations under the Servicing Agreement.
(c) The Depositor agrees to give the Trustee prompt written notice of
each default or Event of Servicing Default on the part of the Servicer or
Supervisory Servicer of its respective obligations under the Servicing
Agreement and any material adverse information regarding the Servicer's or
the Supervisory Servicer's servicing activities of which the Depositor
becomes aware. In the event of termination of the Servicer due to an Event
of Servicing Default under the Servicing Agreement, (i) the Supervisory
Servicer shall assume the duties and responsibilities of the Servicer as
specified in the Servicing Agreement unless it is legally prohibited from
so performing as a matter of law as evidenced by an Opinion of Counsel
addressed and delivered to the Rating Agency and acceptable to the Rating
Agency, or (ii) in the event the Supervisory Servicer is so prohibited, a
Successor Servicer which is an Eligible Servicer reasonably acceptable to
the Rating Agency and the Depositor, shall assume the duties and
responsibilities of the Servicer under the procedures specified in
Servicing Agreement.
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(d) The Depositor shall not waive any default by the Servicer or
Supervisory Servicer under the Servicing Agreement without the written
consent of the Trustee acting with Certificateholder Approval.
(e) The Trustee does not assume any duty or obligation of the
Depositor under the Servicing Agreement and the rights given to the Trustee
thereunder are subject to the provisions of Article VII hereof.
(f) The Servicing Agreement shall provide that the Servicer shall have
no authority to amend any material term of any Receivable unless such
Receivable shall be a defaulted Receivable or unless the Servicer
reasonably believes that a default with respect to such Receivable is
reasonably foreseeable, and the Trustee shall have no authority to amend
any such provision relating thereto.
ARTICLE V
ACCOUNTS, COLLECTIONS, DISTRIBUTIONS OF INTEREST
AND PRINCIPAL, RELEASES, RESERVE FUND,
AND STATEMENTS TO CERTIFICATEHOLDERS
Section 5.01. Accounts. The Trustee shall establish (a) the Issuance Fund,
the Revenue Fund, the Pre-Funding Account, the Collection Account and the
Certificate Account in the name of the Trustee for the benefit of the
Certificateholders, and (b) the Expense Account, the Reserve Fund, the
Capitalized Interest Account and the Residual Interest Account in the name of
the Trustee on behalf of the Persons identified in this Article V. The
Collection Account shall be a segregated account established with the Collection
Account Depository and the remaining foregoing accounts (collectively, the
"Accounts") shall be segregated accounts established with the Corporate Trust
Office of the Trustee. Each Account shall be an Eligible Account.
Amounts held in the Accounts (other than the Collection Account) shall be
invested by the Trustee, upon the written direction of the Depositor, in
Eligible Investments. In the absence of written investment direction from the
Depositor, the Trustee shall invest solely in Eligible Investments specified in
clause (f) of the definition thereof. Eligible Investments shall not be sold or
otherwise transferred prior to their respective maturity dates. Each investment
in accordance with the immediately preceding sentence shall mature no later than
one Business Day before the date on which funds in the Account are intended to
be used. The Trustee shall not be responsible for any losses incurred on any
such investments. Any written investment direction from the Depositor shall
certify that any such investment is authorized by this Section 5.01 and is an
Eligible Investment. All amounts received as earnings on or income from any
investments or reinvestments of funds in any Account shall be credited to such
Account; provided, however, that on each Distribution Date, the Trustee shall
transfer all amounts received as earnings on or income from any investments or
reinvestments of funds in the Expense Account, the Reserve Fund (in excess of
the Reserve Fund Requirement) and the Certificate Account to the Revenue Fund
prior to making any of the transfers referred to in Section 5.05(c) hereof.
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Section 5.02. Collections. Pursuant to the Servicing Agreement, the
Depositor shall cause the Servicer to remit to the Collection Account
established pursuant to Sections 5.01 and 5.04 hereof, and to no other account,
as soon as practicable, but in no event later than the Collection Account
Depository's close of business on the Business Day following the date of receipt
thereof by the Servicer, any payments received by the Servicer from or on behalf
of Obligors including Actual Payments, Insurance Proceeds, Defaulted Receivable
Recoveries, Repurchase Prices and all proceeds relating to the repossession or
disposition of the Financed Vehicles.
Section 5.03. Application of Collections. All amounts transferred to the
Revenue Fund with respect to any Collection Period shall be allocated by the
Trustee based upon the calculations and other written information provided to
the Trustee by the Servicer as set forth in the relevant Monthly Servicer
Report. The Trustee shall have the right but not the obligation to determine,
confirm or recalculate such information provided by the Servicer.
Section 5.04. Collection Account.
(a) The Depositor hereby appoints Wells Fargo Bank (Colorado) National
Association as the initial Collection Account Depository under this
Agreement. Upon thirty (30) days' prior written notice to the Trustee, the
Servicer and the Supervisory Servicer, the Depositor may, at any time and
from time to time, appoint a successor Collection Account Depository for
the Collection Account and, with the consent of the Trustee and upon prior
written notice to the Trustee certifying that the transfer complies with
the provisions of this Section 5.04, transfer the Collection Account from a
depository institution then serving as the Collection Account Depository to
another Collection Account Depository. If at any time the institution then
serving as the Collection Account Depository ceases to qualify as an
eligible Collection Account Depository, then the Depositor shall give
written direction to the Trustee to transfer the Collection Account to an
eligible Collection Account Depository chosen by the Depositor. Upon any
such transfer, such successor institution shall be deemed to be the
Collection Account Depository with respect to the Collection Account so
transferred.
(b) The Depositor shall establish the Collection Account in the name
of the Trustee for the benefit of the Certificateholders and the Trustee
shall maintain the Collection Account with the Collection Account
Depository as an account into which all amounts (including late payments)
remitted directly by Obligors and all amounts received by the Servicer from
or on behalf of Obligors under the terms of the Receivables will be
deposited within one (1) Business Day of receipt thereof. The Collection
Account Depository shall be deemed to hold all funds on deposit for the
account of the Trustee and shall permit withdrawals from the Collection
Account only as provided in this Agreement and shall transmit monthly
statements on all amounts received in the Collection Account to the
Servicer, the Trustee, the Placement Agent and the Supervisory Servicer on
a monthly basis.
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(c) The Trustee shall provide written instruction to the Collection
Account Depository (an "Acknowledgement Letter"), to the effect that (i)
the Collection Account Depository shall transfer cleared funds from the
Collection Account as instructed by the Trustee unless revised instructions
are given by the Trustee and (ii) the Collection Account Depository shall
follow any written instructions provided by the Trustee with respect to the
Collection Account. Such Acknowledgement Letter shall be acknowledged in
writing by the Collection Account Depository as of the date hereof. The
Depositor shall obtain an Acknowledgement Letter from each successor
Collection Account Depository on or prior to the effectiveness of the
transfer of the Collection Account to such successor Collection Account
Depository.
Section 5.05. Deposit of Funds in and Transfer of Funds from the Revenue
Fund.
(a) There shall be deposited into the Revenue Fund, from time to time,
the amounts specified in this Article V. All amounts on deposit in the
Collection Account representing collected funds at 11:00 a.m., New York
time, on each Business Day on which any of the Certificates are Outstanding
shall be transferred by the Collection Account Depository that day to the
Trustee for deposit into the Revenue Fund upon receipt in accordance with
written instructions from the Servicer pursuant to Section 2.02(g) of the
Servicing Agreement, upon which the Trustee may conclusively rely.
(b) On each Distribution Date, commencing with the Distribution Date
in February 1997, the Trustee, in its capacity as Disbursing Agent, shall,
based on the information set forth in the Monthly Supervisory Servicer
Report, deposit funds to the Accounts in the order and in the amounts
specified in Section 5.05(c).
(c) The rights of the Holders with respect to any Class (except Class
A) shall be subordinated to the rights of the Holders of another Class as
specified in Section 2.04. On each Distribution Date, the Trustee shall,
based on the information set forth in the Monthly Supervisory Servicer
Report, pay or transfer amounts on deposit in the Accounts in the following
manner and order of priority:
First, from the Revenue Fund in an amount not to exceed the
Monthly Available Revenues and thereafter from the Reserve Fund, for
deposit into the Expense Account, (A) an amount equal to (i) the
monthly Trustee Fee (including any prior unpaid fees) and (ii) the
monthly Supervisory Servicing Fee (including any prior unpaid fees),
and (B) an amount equal to Transition Costs, if any, of the Trustee or
the Supervisory Servicer, as the case may be, other than Transition
Costs as a result of the termination, without cause, of Texas Commerce
Bank National Association, as Supervisory Servicer;
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Second, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues and thereafter from the Reserve
Fund, for deposit into the Expense Account, (A) an amount equal to the
monthly Servicing Fees under the Servicing Agreement (including any
prior unpaid Servicing Fees) of the Servicer and (B) an amount equal
to Transition Costs, if any, of the Servicer;
Third, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues and thereafter first from the
Capitalized Interest Account and then from the Reserve Fund, for
deposit into the Certificate Account for distribution to the Holders
of the Class A Certificates, an amount equal to the Class A
Certificate Interest and Class A Carryover Interest, if any;
Fourth, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues and thereafter first from the
Capitalized Interest Account and then from the Reserve Fund, for
deposit into the Certificate Account for distribution to the Holders
of the Class B Certificates, an amount equal to the Class B
Certificate Interest and Class B Carryover Interest, if any;
Fifth, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues and thereafter first from the
Capitalized Interest Account and then from the Reserve Fund, for
deposit into the Certificate Account for distribution to the Holders
of the Class C Certificates, an amount equal to the Class C
Certificate Interest and Class C Carryover Interest, if any;
Sixth, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues and thereafter first from the
Capitalized Interest Account and then from the Reserve Fund, for
deposit into the Certificate Account for distribution to the Holders
of the Class D Certificates, an amount equal to the Class D
Certificate Interest and Class D Carryover Interest, if any;
Seventh, from the Reserve Fund to the Certificate Account, an
amount equal to the Defaulted Receivable Deposit Amount for each
Defaulted Receivable included in the Trust Property on such date and
for which (i) no such deposit was made with respect to a prior
Collection Period, and (ii) no repurchase of such Defaulted Receivable
has been made;
Eighth, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues and thereafter from the Reserve
Fund, for deposit into the Certificate Account for distribution to the
Holders of the Class A Certificates, an amount equal to the Class A
Principal Distribution Amount (other than the Defaulted Receivable
Deposit Amount distributed in clause Seventh above) and any Class A
Principal Carryover Shortfall;
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Ninth, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues and thereafter from the Reserve
Fund, for deposit into the Certificate Account for distribution to the
Holders of the Class B Certificates, an amount equal to the Class B
Principal Distribution Amount (other than the Defaulted Receivable
Deposit Amount distributed in clause Seventh above) and any Class B
Principal Carryover Shortfall;
Tenth, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues and thereafter from the Reserve
Fund, for deposit into the Certificate Account for distribution to the
Holders of the Class C Certificates, an amount equal to the Class C
Principal Distribution Amount (other than the Defaulted Receivable
Deposit Amount distributed in clause Seventh above) and any Class C
Principal Carryover Shortfall;
Eleventh, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues and thereafter from the Reserve
Fund, for deposit into the Certificate Account for distribution to the
Holders of the Class D Certificates, an amount equal to the Class D
Principal Distribution Amount (other than the Defaulted Receivable
Deposit Amount distributed in clause Seventh above) and any Class D
Principal Carryover Shortfall;
Twelfth, in connection with an optional purchase of all of the
Receivables, if any, occurring on such Distribution Date pursuant to
Article VI from the Revenue Fund and thereafter from the Reserve Fund,
for deposit into the Certificate Account, an amount equal to any
shortfall of funds therein available to distribute any accrued Class A
Certificate Interest, accrued Class B Certificate Interest, accrued
Class C Certificate Interest and accrued Class D Certificate Interest;
Thirteenth, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues and thereafter from the Reserve
Fund, for deposit into the Expense Account, an amount equal to the sum
of (i) the monthly expenses of the Trustee permitted hereunder and
amounts payable to the Trustee, if any, pursuant to the
indemnification provisions hereof (including any prior unpaid expenses
and indemnities) of the Trustee, (ii) the monthly expenses of the
Supervisory Servicer permitted under the Servicing Agreement, amounts
payable to the Supervisory Servicer, if any, pursuant to the
indemnification provisions of the Servicing Agreement (including any
prior unpaid expenses and indemnities) of the Supervisory Servicer and
amounts payable to the Supervisory Servicer, if any, as Transition
Costs resulting from the termination, without cause, of Texas Commerce
Bank National Association, as Successor Servicer, (iii) the monthly
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expenses of the Servicer permitted under the Servicing Agreement,
amounts payable to the Servicer, if any, pursuant to the
indemnification provisions of the Servicing Agreement (including any
prior unpaid expenses and indemnities) of the Servicer and amounts
payable to the Successor Servicer, if any, as Transition Costs
resulting from the termination, without cause, of Texas Commerce Bank
National Association, and (iv) the pro rata portion on a monthly basis
of the Administrative Expenses not otherwise provided for above, which
amount shall be calculated by the Servicer and provided to the
Supervisory Servicer for inclusion in the Monthly Supervisory Servicer
Report;
Fourteenth, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Funds, for deposit into the Reserve Fund,
an amount equal to any deficiency between the amount then on deposit
in the Reserve Fund (after giving effect to any withdrawals made or to
be made from the Reserve Fund for payments or distributions on such
Distribution Date) and the Reserve Fund Requirement, calculated as of
the close of business on the related Distribution Date; and
Fifteenth, from the Revenue Fund in an amount not to exceed the
remaining Monthly Available Revenues, as appropriate, for deposit into
the Residual Interest Account, an amount equal to the sum of the
remaining balance of funds in the Revenue Fund plus all cash amounts
held in the Reserve Fund in excess of the Reserve Fund Requirement
(after giving effect to any withdrawals from or deposits to the
Reserve Fund on such Distribution Date).
Notwithstanding the order of priority described above, (i) on the initial
Distribution Date only, an amount equal to the interest accrued and
actually received on the Receivables from the initial Cutoff Date to the
Closing Date shall be withdrawn from the Revenue Fund, to the extent
contained therein, and paid to the Seller and (ii) on the Distribution Date
following each Funding Date, an amount equal to the interest accrued on the
Subsequent Receivables from the applicable Cutoff Date to the Funding Date
and actually received, shall be withdrawn from the Revenue Fund, to the
extent contained therein, and paid to the Seller.
Section 5.06. Issuance Fund. On the Closing Date there shall be deposited
into the Issuance Fund an amount equal to the gross proceeds from the sale of
the Certificates, the Costs of Issuance of the offering of the Certificates and
the Initial Reserve Fund Deposit to be supplied by the Depositor. The amounts on
deposit in the Issuance Fund shall be paid or transferred on the Closing Date
(a) to the Reserve Fund, an amount equal to the Initial Reserve Fund Deposit,
(b) to the Pre-Funding Account, the amount of $7,300,000.00, (c) to the Persons
and in the amounts set forth in an Officers' Certificate stating the Costs of
Issuance of the Certificates, (d) at the direction of the Depositor, to the
lienholders, the amounts required to pay off existing lienholders with respect
to the Receivables Granted to the Trustee on the Closing Date pursuant to the
terms hereof and (e) at the direction of the Depositor, to the Seller, the
difference between the Receivables Purchase Price with respect to the
Receivables Granted to the Trustee on the Closing Date pursuant to the terms
hereof and the amounts paid to lienholders pursuant to clause (d) of this
Section. Subsequent to the disbursement of all funds initially deposited into
the Issuance Fund, the Issuance Fund shall be terminated and closed.
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Section 5.07. Reserve Fund.
(a) The Trustee shall establish the Reserve Fund which shall not be a
part of the Trust, but instead shall be held for the benefit of the
Trustee, the Supervisory Servicer, the Servicer, the Certificateholders and
the other Persons specified in Section 5.05(c) hereof, which Reserve Fund
shall be a separate trust account, which shall be an Eligible Account,
established in the name of the Trustee and in the Trust Department of the
Trustee and maintained with the Trustee; provided, that in the event that
the Reserve Fund ceases to be an Eligible Account, the Trustee shall
immediately transfer all funds held therein to a new Eligible Account. The
Depositor and the Trustee acknowledge that any amounts on deposit in the
Reserve Fund (and any reinvestment earnings thereon) shall be owned
directly by the Depositor, and such parties hereby agree to treat the same
as assets (and investment earnings) of the Depositor for federal income tax
purposes. The Reserve Fund shall be initially funded in the amount of the
Initial Reserve Fund Deposit and shall be maintained pursuant to Section
5.12 hereof.
(b) In order to provide for the prompt payment to the Trustee, the
Supervisory Servicer, the Servicer, the Certificateholders and the other
Persons specified in Section 5.05(c) hereof, in accordance with Section
5.05(c), to give effect to the subordination provided for herein, and to
assure availability of the amounts maintained in the Reserve Fund, the
Depositor, on behalf of itself and its successors and assigns, subject to
the terms and conditions hereof, hereby pledges, conveys and grants a
security interest to the Trustee, as collateral agent, and its successors
and assigns, for and on behalf of the Certificateholders, in and to all of
its right, title and interest in and to the Reserve Fund including the
Initial Reserve Fund Deposit and all additional deposits therein and all
proceeds of the foregoing, including, without limitation, all other amounts
and investments held from time to time in the Reserve Fund (whether in the
form of deposit accounts, Physical Property, book-entry securities,
security entitlements (as defined in Section 8-102(a)(12) of the UCC)
uncertificated securities, financial assets (as defined in Section
8-102(a)(9) of the UCC), any other investment property (as defined in
Section 9-115 of the UCC) or otherwise) and solely for the purpose of
providing for distributions and payments pursuant to Section 5.11 to the
foregoing Persons provided for in Section 5.05(c), this Section 5.07 and
Section 5.12; (all of the foregoing, subject to the limitations set forth
below, the "Reserve Fund Property"), to have and to hold all the aforesaid
property, rights and privileges unto the Trustee, its successors and
assigns, in trust for the uses and purposes, and subject to the terms and
provisions, set forth in this Section 5.07. The Trustee hereby acknowledges
such pledge and accepts the trust hereunder and shall hold and distribute
the Reserve Fund Property in accordance with the terms and provisions of
this Section 5.07 and Section 5.12.
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(c) (i) Amounts held in the Reserve Fund shall be invested in
Eligible Investments, in accordance with written instructions from the
Depositor, and such investments shall not be sold or disposed of prior
to their maturity but shall mature as provided therein; provided, that
each such investment shall mature no later than one Business Day prior
to the applicable Distribution Date. All such investments shall be
made in the name of the Trustee or its nominee, and all income and
gain realized thereon shall be deposited by the Trustee into the
Reserve Fund when received by the Trustee and shall be held as part of
the Reserve Fund Property. Notwithstanding the foregoing, the Reserve
Fund may contain at any time uninvested cash in an amount not to
exceed the maximum amount insured by the FDIC without giving rise to
any obligation to withdraw such cash from the Reserve Fund. Realized
losses, if any, on investment of the Reserve Fund Property shall be
charged first against undistributed investment earnings attributable
to the Reserve Fund Property and then against the Reserve Fund
Property.
(ii) With respect to the Reserve Fund Property, the Depositor and
the Trustee agree that:
(A) Subject to the provisions of Section 5.07(a), any
Reserve Fund Property that is held in deposit accounts shall be
held solely in the name of the Trustee, as collateral agent, at
one or more depository institutions in an Eligible Account. Each
such deposit account shall be subject to the exclusive custody
and control of the Trustee, and the Trustee shall have sole
signature authority with respect thereto.
(B) Any Reserve Fund Property that constitutes Physical
Property shall be delivered to the Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the Trustee or a
securities intermediary (as such term is defined in Section
8-102(a)(14) of the UCC) acting solely for the Trustee so as to
continuously establish control (as defined in Section 8-106 of
the UCC) thereof by the Trustee.
(C) Any Reserve Fund 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 Trustee, pending maturity or disposition,
through continued book-entry registration of such Reserve Fund
Property as described in such paragraph so as to continuously
establish control (as defined in Section 8-106 of the UCC)
thereof by the Trustee.
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(D) Any Reserve Fund Property which is an investment
property (as defined in Section 9-115 of the UCC) and that is not
governed by clause (C) above shall be delivered to the Trustee in
accordance with paragraph (c) of the definition of "Delivery" and
shall be maintained by the Trustee, pending maturity or
disposition, through continued registration of the Trustee's (or
its nominee's) ownership of such security so as to continuously
establish control (as defined in Section 8-106 of the UCC)
thereof by the Trustee.
(E) Subject to the provisions of Section 5.12, the
Depositor, as the owner of the Reserve Fund, shall, after payment
of amounts due the Trustee and the Supervisory Servicer, be
entitled to the distribution of any funds remaining therein upon
the termination of this Agreement.
Section 5.07A. Capitalized Interest Account.
(a) The Trustee shall establish the Capitalized Interest Account which
shall not be a part of the Trust, but instead shall be held for the benefit
of the Trustee and the Certificateholders, which Capitalized Interest
Account shall be a separate trust account, which shall be an Eligible
Account, established in the name of the Trustee and in the Trust Department
of the Trustee and maintained with the Trustee; provided, that in the event
that the Capitalized Interest Account ceases to be an Eligible Account, the
Trustee shall immediately transfer all funds held therein to a new Eligible
Account. The Depositor and the Trustee acknowledge that any amounts on
deposit in the Capitalized Interest Account (and any reinvestment earnings
thereon) shall be owned directly by the Depositor, and such parties hereby
agree to treat the same as assets (and investment earnings) of the
Depositor for federal income tax purposes. The Capitalized Interest Account
shall be funded in the amount of the Capitalized Interest Amount and shall
be maintained pursuant to this Section 5.07A.
(b) In order to provide for the prompt payment to the Trustee and the
Certificateholders in accordance with Section 5.05(c), to give effect to
the subordination provided for herein, and to assure availability of the
amounts on deposit in the Capitalized Interest Account, the Depositor, on
behalf of itself and its successors and assigns, subject to the terms and
conditions hereof, hereby pledges, conveys and grants a security interest
to the Trustee, as collateral agent, and its successors and assigns, for
and on behalf of the Certificateholders, in and to all of its right, title
and interest in and to the Capitalized Interest Account including the
Capitalized Interest Amount and all proceeds of the foregoing, including,
without limitation, all other amounts and investments held from time to
time in the Capitalized Interest Account (whether in the form of deposit
accounts, Physical Property, book-entry securities, security entitlements
(as defined in Section 8-102(a)(12) of the UCC) uncertificated securities,
financial assets (as defined in Section 8-102(a)(9) of the UCC), any other
investment property (as defined in Section 9-115 of the UCC) or otherwise)
and solely for the purpose of providing for distributions and payments
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pursuant to Section 5.11 to the foregoing Persons provided for in Section
5.05(c) and this Section 5.07A; (all of the foregoing, subject to the
limitations set forth below, the "Capitalized Interest Property"), to have
and to hold all the aforesaid property, rights and privileges unto the
Trustee, its successors and assigns, in trust for the uses and purposes,
and subject to the terms and provisions, set forth in this Section 5.07A.
The Trustee hereby acknowledges such pledge and accepts the trust hereunder
and shall hold and distribute the Reserve Fund Property in accordance with
the terms and provisions of this Section 5.07A.
(c) (i) Amounts held in the Capitalized Interest Account shall be
invested in Eligible Investments, in accordance with written
instructions from the Depositor, and such investments shall not be
sold or disposed of prior to their maturity but shall mature as
provided therein; provided, that each such investment shall mature no
later than one Business Day prior to the applicable Distribution Date.
All such investments shall be made in the name of the Trustee or its
nominee, and all income and gain realized thereon shall be deposited
by the Trustee into the Capitalized Interest Account when received by
the Trustee and shall be held as part of the Capitalized Interest
Property. Notwithstanding the foregoing, the Capitalized Interest
Account may contain at any time uninvested cash in an amount not to
exceed the maximum amount insured by the FDIC without giving rise to
any obligation to withdraw such cash from the Capitalized Interest
Account. Realized losses, if any, on investment of the Capitalized
Interest Property shall be charged first against undistributed
investment earnings attributable to the Capitalized Interest Property
and then against the Capitalized Interest Property.
(ii) With respect to the Capitalized Interest Property, the
Depositor and the Trustee agree that:
(A) Subject to the provisions of Section 5.07A(a), any
Capitalized Interest Property that is held in deposit accounts
shall be held solely in the name of the Trustee, as collateral
agent, at one or more depository institutions in an Eligible
Account. Each such deposit account shall be subject to the
exclusive custody and control of the Trustee, and the Trustee
shall have sole signature authority with respect thereto.
(B) Any Capitalized Interest Property that constitutes
Physical Property shall be delivered to the Trustee in accordance
with paragraph (a) of the definition of "Delivery" and shall be
held, pending maturity or disposition, solely by the Trustee or a
securities intermediary (as such term is defined in Section
8-102(a)(14) of the UCC) acting solely for the Trustee so as to
continuously establish control (as defined in Section 8-106 of
the UCC) thereof by the Trustee.
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(C) Any Capitalized Interest 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 Trustee, pending maturity or disposition,
through continued book-entry registration of such Capitalized
Interest Property as described in such paragraph so as to
continuously establish control (as defined in Section 8-106 of
the UCC) thereof by the Trustee.
(D) Any Capitalized Interest Property which is an investment
property (as defined in Section 9-115 of the UCC) and that is not
governed by clause (C) above shall be delivered to the Trustee in
accordance with paragraph (c) of the definition of "Delivery" and
shall be maintained by the Trustee, pending maturity or
disposition, through continued registration of the Trustee's (or
its nominee's) ownership of such security so as to continuously
establish control (as defined in Section 8-106 of the UCC)
thereof by the Trustee.
(E) The Depositor, as the owner of the Capitalized Interest
Account, shall be entitled to the distribution of any funds
remaining therein upon the termination of this Agreement.
(d) The Trustee shall use funds on deposit in the Capitalized Interest
Account on a Distribution Date to fund any deficiency in amounts on deposit
in the Revenue Fund available for the distribution of interest with respect
to the Certificates during the Funding Period. The amount of funds
withdrawn from the Capitalized Interest Account to fund such deficiency
shall be transferred by the Trustee to the Certificate Account pursuant to
Section 5.05(c).
(e) To the extent that any funds remain in the Capitalized Interest
Account after termination of the Funding Period, such funds shall be
transferred on the following Determination Date to the Residual Interest
Account and the Capitalized Interest Account shall thereafter be terminated
and closed.
Section 5.08. Use of Moneys in the Expense Account. The Trustee shall use
funds in the Expense Account to (a) first, pay when due the fees, expenses and
indemnities of the Persons specified and in the order of priority set forth in
Section 5.05(c) clauses First, Second and Fourteenth and (b) second, pay when
due the other Administrative Expenses in accordance with an Officer's
Certificate delivered by the Depositor to the Trustee.
Section 5.09. Use of Moneys in the Residual Interest Account. On each
Distribution Date and subsequent to all transfers and deposits by the Trustee
pursuant to Section 5.05(c), the Trustee shall release the balance of the funds
in the Residual Interest Account to the Depositor.
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Section 5.10. Pre-Funding Account.
(a) The Trustee shall credit to the Pre-Funding Account, pursuant to
an Officer's Certificate, an amount equal to $7,300,000.00 transferred
thereto from the Issuance Fund representing a portion of the proceeds from
the sale of the Certificates.
(b) The Trustee shall use funds on deposit in the Pre-Funding Account
on a Funding Date to acquire Subsequent Receivables. The amount of funds
withdrawn from the Pre-Funding Account for the acquisition of Subsequent
Receivables will be equal to the sum of (i) the additional Reserve Fund
deposit as specified in Section 2.16 and (ii) the Receivables Purchase
Price of the Subsequent Receivables, as of the applicable Cutoff Date
reduced by the amount transferred to the Reserve Fund pursuant to preceding
clause (i).
(c) To the extent that any funds remain in the Pre-Funding Account
after termination of the Funding Period, such funds in an amount
representing the amount deposited therein on the Closing Date less the
aggregate principal balance of Subsequent Receivables conveyed to the Trust
shall be transferred to the Certificate Account and distributed to the
Certificateholders on the Distribution Date occurring after termination of
the Funding Period (a "Refunding Event") thus resulting in a reduction in
the Aggregate Current Stated Principal Balance of the Certificates. Any
remaining balance in the Pre-Funding Account shall be transferred to the
Revenue Fund. Upon transfer of the remaining funds, the Pre-Funding Account
shall be terminated and closed.
Section 5.11. Certificate Distributions.
(a) On each Distribution Date, the Trustee shall make the following
distributions in the following order of priority from amounts then on
deposit in the Certificate Account, based on the written report provided by
the Supervisory Servicer:
(i) from the Certificate Account, an amount equal to the Class A
Certificate Interest and any Class A Carryover Interest, shall be
distributed to the Class A Certificateholders;
(ii) from the Certificate Account, an amount equal to the Class B
Certificate Interest and any Class B Carryover Interest, shall be
distributed to the Class B Certificateholders;
(iii) from the Certificate Account, an amount equal to the Class
C Certificate Interest and any Class C Carryover Interest, shall be
distributed to the Class C Certificateholders;
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(iv) from the Certificate Account, an amount equal to the Class D
Certificate Interest and any Class D Carryover Interest, shall be
distributed to the Class D Certificateholders;
(v) from the Certificate Account, an amount equal to the Class A
Principal Distribution Amount and any Class A Principal Carryover
Shortfall shall be distributed to the Class A Certificateholders;
(vi) from the Certificate Account, an amount equal to the Class B
Principal Distribution Amount and any Class B Principal Carryover
Shortfall shall be distributed to the Class B Certificateholders;
(vii) from the Certificate Account, an amount equal to the Class
C Principal Distribution Amount and any Class C Principal Carryover
Shortfall shall be distributed to the Class C Certificateholders;
(viii) from the Certificate Account, an amount equal to the Class
D Principal Distribution Amount and any Class D Principal Carryover
Shortfall shall be distributed to the Class D Certificateholders;
(b) All distributions with respect to each Class of Certificates on
each Distribution Date shall be made pro rata among the Outstanding
Certificates of such Class in proportion to the Percentage Interests
evidenced thereby. The Trustee shall distribute to each Certificateholder
of record on the preceding Record Date either (i) by wire transfer, in
immediately available funds to the account of such Certificateholder at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Trustee appropriate written
instructions three (3) Business Days prior to the Record Date and such
Certificateholder's Certificates in the aggregate evidence an initial
denomination of not less than $1,000,000 (which instructions may remain in
effect for subsequent Distribution Dates, or, (ii) if not, by check mailed
to such Certificateholder at the address of such Certificateholder
appearing in the Certificate Register, the amounts to be distributed to
such Certificateholder pursuant to such Certificateholder's Certificates.
So long as any Class of Certificates is held in book-entry form, the
Trustee shall make all distributions with respect thereto by wire transfer
to the Securities Depository holding such Certificates.
Section 5.12. Use of Moneys in the Reserve Fund. The Trustee shall deposit
into the Reserve Fund funds as described herein and any other funds received
from or on behalf of the Depositor for deposit therein. In addition to the uses
and purposes set forth in Section 5.05(c) hereof, the Trustee shall use funds in
the Reserve Fund for any one or more of the following purposes and in the
following order of priority of payment: (i) on the Business Day immediately
prior to optional repurchase of all Receivables pursuant to Article VI, to
transfer (A) to the Certificate Account to pay accrued Class A Certificate
Interest, Class B Certificate Interest, Class C Certificate Interest and Class D
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Certificate Interest, and (ii) on each Distribution Date to the Residual
Interest Account, an amount equal to all cash amounts held in the Reserve Fund,
if any, in excess of the Reserve Fund Requirement (after giving effect to any
withdrawals from or deposits to the Reserve Fund on such Distribution Date) but
only after amounts then payable for the First through Fourteenth priority of
distribution set forth in Section 5.05(c) hereof have been paid. Upon
termination of this Agreement, any amounts on deposit in the Reserve Fund, after
payment of all amounts due to the Trustee, the Supervisory Servicer, the
Servicer and the Certificateholders, shall be paid to the Depositor.
Section 5.13. Statements to Certificateholders; Tax Returns. Within
forty-five (45) days after the end of each calendar year, the Depositor shall
cause the Servicer to furnish (or if the Supervisory Servicer shall become the
Servicer, the Depositor shall furnish) to each Person who at any time during
such calendar year was a Certificateholder of record and received any
distribution thereon (a) a report as to the aggregate of amounts distributed
during such calendar year to each such Certificateholder allocable to principal
and allocable to interest for such calendar year or applicable portion thereof
during which such Person was a Certificateholder and (b) such information
required by the Code and regulations thereunder, to enable such
Certificateholders to prepare their federal and state income tax returns. Within
thirty days after the end of each calendar year, the Depositor shall cause the
Servicer to furnish to the Depositor a statement containing such of the
information provided pursuant to this Section 5.13 as relates to payments to the
Depositor, aggregated for such calendar year. The Certificateholders and the
Depositor acknowledge that the Certificates represent undivided interests in the
Receivables subject to the retention by the Depositor of a series of stripped
coupons as described in Section 1286 of the Code.
The Depositor shall cause a firm of Independent Public Accountants to
prepare all tax returns required to be filed by the Depositor. The Trustee, upon
reasonable written request, shall furnish the Depositor with all such
information known to the Trustee as may be reasonably required in connection
with the preparation of all tax returns of the Depositor.
Section 5.14. Reports by Trustee. The Trustee shall deliver to the
Depositor and the Servicer, within five (5) Business Days after the end of each
Collection Period, a written statement setting forth the amount of the Reserve
Fund and the identity of the investments included in such fund. Without limiting
the generality of the foregoing, the Trustee shall, upon the written reasonable
request of the Depositor, promptly transmit to the Depositor copies of all
accountings of, and information with respect to, the Reserve Fund, investments
thereof, and payments thereto and therefrom.
Section 5.15. Final Balances. Upon final distribution of all principal and
interest with regard to the Certificates, all reasonable fees, charges and other
expenses, such as fees and expenses of the Trustee, or upon the making of
adequate provisions for the payment of such amounts as permitted hereby,
including payment of all obligations, all moneys remaining in the Reserve Fund,
except moneys necessary to make distributions equal to such amounts and
principal and interest with respect to the Certificates, which moneys shall be
held and disbursed by the Trustee pursuant to this Article V, shall be remitted
to the Depositor.
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Section 5.16. Financial Statements. The Depositor will deliver or cause to
be delivered, in duplicate, to the Rating Agency, the Certificateholders, the
Supervisory Servicer, the Seller, the Placement Agent and the Trustee:
(a) as soon as available, but in no event later than 50 days after the
end of each fiscal quarter of the Servicer (commencing with the quarter
ending March 31, 1997), (i) an unaudited balance sheet and income statement
(prepared in accordance with generally accepted accounting principles
applied on a consistent basis, other than the absence of notes, and subject
to year end adjustments) for the Servicer and its consolidated subsidiaries
covering the preceding quarter, in each case certified by an Authorized
Officer of each of such Person to be true, accurate and complete copies of
such financial statements and (ii) an Officer's Certificate of the Servicer
certifying as to (A) the existence or nonexistence of an Event of Servicing
Default and (B) the compliance with financial covenants contained herein;
and
(b) on or before ninety-five (95) days after the end of each fiscal
year of the Servicer (commencing with the fiscal year ending December 30,
1996) (i) the financial statements of the Servicer and its consolidated
subsidiaries containing a report of a firm of Independent Public
Accountants selected by the Servicer, to the effect that such firm has
audited the financial statements of the Servicer and its consolidated
subsidiaries and that, on the basis of such audit conducted in accordance
with generally accepted audit standards, such financial statements present
fairly, in all material respects, the financial position, results of
operations and cash flows of the Servicer and its consolidated subsidiaries
and (ii) an Officer's Certificate of the Servicer certifying as to (A) the
existence or nonexistence of an Event of Servicing Default and (B) the
compliance with financial covenants contained herein; and
(c) as soon as practicable, but in any event within 120 days after the
end of each fiscal year, an annual review of the Servicer's management
personnel, procedures and operations in form and substance reasonably
satisfactory to the Supervisory Servicer, prepared by the same firm of
Independent Public Accountants which prepared the balance sheet and
financial statements required under the preceding clause (b), dated as of
December 30 of each year beginning December 30, 1996 and substantially
stating to the effect that (A) such accountants have examined the accounts
and records of the Servicer relating to the Trust Property (which records
shall be described in one or more schedules to such statement), (B) such
firm has compared the information contained in the Servicer reports
delivered in the relevant period with information contained in the accounts
and records for such period, and (C) on the basis of the procedures
performed, whether (1) the information contained in the Servicer's reports
delivered on the relevant period reconciles with the information contained
in the accounts and records or (2) the accounts and records of the Servicer
related to the Trust Property agree to the respective source documents
except for such exceptions as the accountants shall believe to be
immaterial and such other exceptions as shall be set forth in such
statement; and
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(d) to the extent not covered in subsections (a), (b) and (c) above,
as soon as practicable and in any event within five (5) days after such
filing, any financial reports filed by the Servicer with the Securities and
Exchange Commission; and
(e) prompt notice of any change in the Servicer's fiscal year; and
(f) except to the extent specifically provided in this Agreement or
the Servicing Agreement, neither the Supervisory Servicer nor the Trustee
shall have any responsibility to review or any liability whatsoever for the
review of and/or reporting to the Certificateholders or otherwise of the
results of any financial statements received by the Supervisory Servicer or
the Trustee under this Section 5.16.
Notwithstanding paragraphs (a) and (b) above, if Texas Commerce Bank
National Association is acting as the Successor Servicer, the financial
statements of the Servicer specified therein need not be delivered.
ARTICLE VI
OPTIONAL PURCHASE OF RECEIVABLES
The Depositor shall have the option to purchase the corpus of the Trust on
the Distribution Date following the last day of any Collection Period as of
which the Aggregate Receivable Balance as a percentage of the Original
Receivable Balance shall be less than or equal to the Optional Purchase
Percentage. To exercise such option, the Depositor shall (a) give notice to the
Trustee and the Certificateholders not less than 30 days prior to the
Distribution Date on which such purchase is to be effected and (b) on or before
such Distribution Date, deposit in the Revenue Fund an amount equal to the
Repurchase Price for the Receivables and the appraisal value of any other
property held by the Trust. After payment of such amounts, the Depositor shall
succeed to all interests in and to the Trust Property.
ARTICLE VII
THE TRUSTEE
Section 7.01. Duties of Trustee.
(a) If the Trustee has received written notice pursuant to Section
7.02 or a Responsible Officer shall otherwise have actual knowledge that an
Event of Servicing Default or an Event of Insolvency has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Agreement, and use the same degree of care and skill in its
exercise, as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs.
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(b) Except during the occurrence and continuance of such an Event of
Servicing Default or an Event of Insolvency:
(i) The Trustee need perform only those duties that are
specifically set forth in this Agreement and no others and no implied
covenants or obligations of the Trustee shall be read into this
Agreement.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Agreement. The Trustee shall, however, examine such
certificates and opinions to determine whether they conform on their
face to the requirements of this Agreement but the Trustee shall not
be required to determine, confirm or recalculate information contained
in such certificates or opinions.
(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, or its own misconduct, except that:
(i) This paragraph does not limit the effect of subsection (b) of
this Section 7.01.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it from the Certificateholders in accordance with this
Agreement or for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement.
(iv) Except in connection with the performance of its obligations
under Section 3.05(b) hereof, the Trustee shall have no responsibility
for filing any financing or continuation statement in any public
office at any time or otherwise to perfect or to maintain the
perfection of any security interest in any Receivable.
(d) No provision of this Agreement shall require the Trustee to expend
or risk its own funds or otherwise incur any financial or other 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
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believing that repayment of such funds or adequate indemnity against such
risk or liability is not assured to it; provided, however, that nothing in
this Section 7.01(d) shall be construed to limit the exercise by the
Trustee of any right or remedy permitted under this Agreement or otherwise
in the event of the Depositor's failure to pay the Trustee's fees and
expenses pursuant to Section 7.07. In having reasonable grounds for
believing that such repayment or indemnity is not assured to it, the
Trustee must consider not only the likelihood of repayment or indemnity by
or on behalf of the Depositor but also the likelihood of repayment or
indemnity from amounts payable to it from the Trust Property pursuant to
Sections 7.07 and 5.08 hereof.
(e) Every provision of this Agreement that in any way relates to the
Trustee is subject to the provisions of this Section 7.01.
(f) The provisions of subsections (a), (b), (c) and (d) of this
Section 7.01 shall apply to any co-trustee or separate trustee appointed by
the Depositor and the Trustee pursuant to Section 7.13 hereof.
(g) Money held in trust by the Trustee need not be segregated from
other trust funds held by the Trustee except to the extent required by law.
(h) The Trustee shall provide on a timely basis all information
reasonably requested by the Supervisory Servicer to enable the Supervisory
Servicer to conduct such tests and complete such reports as are specified
in the Servicing Agreement.
(i) The permissive right of the Trustee to take actions enumerated in
this Agreement shall not be construed as a duty and the Trustee shall not
be answerable for other than its gross negligence or willful misconduct.
(j) The Trustee shall not in any way be held liable by reason of any
insufficiency in any account held by the Trustee resulting from any loss
experienced on any Receivables.
(k) In no event shall the Trustee be required to take any action that
conflicts with any of the provisions of this Agreement or with the
Trustee's fiduciary duties or that adversely affect its rights and
immunities hereunder.
(l) The Trustee shall send to the Rating Agency, the Placement Agent
and the Depositor on each Distribution Date a certificate from a
Responsible Officer stating that except as described in such certificate,
he or she has not received any notice of, and to the best of his or her
actual knowledge, no Event of Servicing Default or Event of Insolvency has
occurred and is continuing. Upon discovery by the Trustee of the occurrence
of an Event of Servicing Default or an Event of Insolvency or receipt of
notice thereof, the Trustee shall provide notice thereof to the Rating
Agency and the Depositor. In the event the Servicer or Supervisory
Servicer, as applicable, does not provide to the Rating Agency all reports
of the Servicer or the Supervisory Servicer, as the case may be, and all
reports to the Certificateholders, upon request of the Rating Agency, the
Trustee shall deliver promptly after request, copies of such Servicer
reports as are in Trustee's possession to Certificateholders.
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(m) In no event shall the Trustee have any obligations or duties under
or have any liabilities whatsoever to Certificateholders under the Employee
Retirement Income Security Act of 1974, as amended.
Section 7.02. Notice of Event of Insolvency or Event of Servicing Default.
The Trustee shall not be required to take notice of or be deemed to have notice
or knowledge of any Event of Servicing Default or an Event of Insolvency, unless
specifically notified in writing at the address set forth in Section 12.04 or
until a Responsible Officer shall have acquired actual knowledge of any Event of
Servicing Default or an Event of Insolvency; provided, that the Trustee shall,
on a monthly basis, deliver written notice to the Rating Agency that, to its
actual knowledge, no Event of Servicing Default has occurred.
Section 7.03. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in any document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on such Officer's Certificate or Opinion of Counsel.
(c) The Trustee shall not be liable for any action it takes or omits
to take or any action or inaction it believes in good faith to be
authorized or within its rights or powers.
(d) Except as provided in Sections 7.01(b) and 10.07 hereof, the
Trustee shall not be bound to make any investigation into the facts of
matters stated in any reports, certificates, payment instructions, opinion,
notice, order or other paper or document unless the Trustee has actual
knowledge to the contrary and has been furnished satisfactory
indemnification.
(e) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed
with due care by it hereunder. The Trustee may consult with counsel, and
the advice or opinion of counsel with respect to legal matters relating to
this Agreement and the Certificates shall be full and complete
authorization and protection from liability in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
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(f) To the extent that both the Servicer and Supervisory Servicer have
the right to instruct the Trustee to act or refrain from acting, the
Trustee shall be entitled to rely on the instructions of the Supervisory
Servicer in the event of any conflicts or inconsistencies between the
instructions of the Supervisory Servicer and those of the Servicer.
Section 7.04. Not Responsible for Recitals, Issuance of Certificates or
Application of Moneys as Directed. The recitals contained herein and in the
Certificates, except the certificates of authentication on the Certificates,
shall be taken as the statements of the Depositor, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations with
respect to the Trust Property or as to the validity or sufficiency of the Trust
Property or this Agreement or of the Certificates. The Trustee shall not be
accountable for the use or application by the Depositor of the proceeds of the
Certificates. The Trustee shall not be liable to any Person for any money paid
to the Depositor upon Depositor instruction or order, Servicer instruction or
order or direction provided in a Servicer report contemplated by this Agreement.
Section 7.05. May Hold Certificates. The Trustee or any agent of the
Depositor, in its individual or any other capacity, may become the owner or
pledgee of Certificates and may otherwise deal with the Depositor or any
Affiliate of the Depositor with the same rights it would have if it were not
Trustee or other agent.
Section 7.06. Money Held in Trust. The Trustee shall be under no liability
for interest on any money received by it hereunder except as otherwise agreed
with the Depositor and except to the extent of income or other gain on
investments which are obligations of the Trustee, and income or other gain
actually received by the Trustee on investments which are obligations of others.
Section 7.07. Compensation and Reimbursement.
(a) The Depositor agrees:
(i) jointly and severally with the Seller, to pay the Trustee
from time to time compensation for all services rendered by it
hereunder as Trustee, Certificate Registrar, Custodian and Disbursing
Agent with respect to the Certificates in accordance with the fee
schedule contained in a fee letter from the Trustee to the Depositor.
The Trustee's compensation shall not be limited by any law or
compensation of a trustee of an express trust and the payment to the
Trustee provided by Article V hereto shall constitute payment due with
respect to such letter;
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(ii) jointly and severally with the Seller, except as otherwise
expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Agreement
(including, but not limited to, the reasonable compensation, expenses
and disbursements of its agents and counsel and allocable costs of its
in-house counsel); provided, however, in no event shall the Depositor
or any Seller pay or reimburse the Trustee or its agents or counsel,
including in-house counsel, for any expenses and disbursements
incurred or made by the Trustee in connection with any action or
inaction on the part of the Trustee for which a court of competent
jurisdiction has found the Trustee to be negligent;
(iii) jointly and severally with the Seller, to indemnify the
Trustee and its officers, directors, employees and agents for, and to
hold them harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of, or in
connection with, the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim
in connection with the exercise or performance of any of its powers or
duties hereunder; provided, however, that:
(A) with respect to any such claim the Trustee shall have
given the Depositor and the Seller written notice thereof
promptly after the Trustee shall have actual knowledge thereof,
provided, that failure to notify shall not relieve the parties of
their obligations hereunder;
(B) while maintaining absolute control over its own defense,
the Trustee shall cooperate and consult fully with the Depositor
and the Seller in preparing such defense;
(C) notwithstanding anything to the contrary in this Section
7.07(a)(iii), neither the Depositor nor the Seller shall be
liable for settlement of any such claim by the Trustee entered
into without the prior consent of the Depositor and the Seller,
which consent shall not be unreasonably withheld or delayed; and
(D) the Trustee, its officers, directors, employees and
agents, as a group, shall be entitled to counsel separate from
the Depositor and the Seller; to the extent the Depositor's or
the Seller' interests are not adverse to the interests of the
Trustee, its officers, directors, employees or agents, the
Trustee may agree to be represented by the same counsel as the
Seller or the Depositor.
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Such payment obligations and indemnification shall survive
discharge of the Agreement. The Trustee's expenses are intended
as expenses of administration.
(b) The Trustee shall on each Distribution Date deduct payment of its
fees and expenses hereunder from moneys in the Expense Account pursuant to
Sections 5.05 and 5.08; provided, however, that in no event shall the
Trustee's expenses paid from the Trust Property exceed 4.0% of the annual
Trustee Fee.
(c) The Depositor agrees to assume and to pay, and to indemnify,
defend and hold harmless the Trustee and the Certificateholders from any
liabilities associated with the Trust Property including, but not limited
to, taxes which may at anytime be asserted with respect to, and as of the
date of, the conveyance of the Trust Property to the Trustee, including,
without limitation, any sales, gross receipts, general corporation,
personal property, privilege or license taxes (but with respect to the
Certificateholders only, not including any federal, state or other taxes
arising out of the creation of the issuance of the Certificates or
distributions with respect thereto) and costs, expenses and reasonable
counsel fees in defending against the same. The assumption of liabilities
hereunder is intended to confer on the Depositor the same direct and
primary liability as would apply to a general partner of a limited
partnership organized under the laws of the State of Delaware. Nothing
herein is intended to create any obligation by the Depositor to make any
payment with respect to the Certificates, except as expressly provided
herein.
Section 7.08. Eligibility; Disqualification. The Trustee shall always have
a combined capital and surplus as stated in Section 7.09, and shall always be a
bank or trust company organized under the laws of the United States or any state
thereof which is a member of the Federal Reserve System.
Section 7.09. Trustee's Capital and Surplus. The Trustee and/or its parent
shall at all times have a combined capital and surplus of at least $50,000,000.
If the Trustee publishes annual reports of condition of the type described in
Section 310(a)(2) of the Trust Indenture Act of 1939, as amended, its combined
capital and surplus for purposes of this Section 7.09 shall be as set forth in
the latest such report.
Section 7.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Section 7.10 shall become effective
until the acceptance of appointment by the successor Trustee under Section
7.11.
(b) The Trustee may resign at any time by giving written notice
thereof to the Depositor. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee 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.
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(c) The Trustee may be removed at any time by Act of the
Certificateholders representing more than fifty percent (50%) of the
Aggregate Current Stated Principal Balance of the Outstanding Certificates,
delivered to the Trustee and to the Depositor.
(d) If at any time the Trustee shall cease to be eligible under
Section 7.08 or 7.09 or shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, (i)
the Depositor by an Depositor Order may remove the Trustee, or (ii) any
Certificateholder who has been a bona fide Certificateholder for at least
six months may, on behalf of itself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
If the Trustee shall be removed pursuant to Section 7.10(c) or (d) and
no successor Trustee shall have been appointed and accepted appointment
within 30 days of the date of removal, the removed Trustee may petition any
court of competent jurisdiction for appointment of a successor Trustee
acceptable to the Rating Agency and Certificateholders representing 50% of
Current Stated Principal Balance.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any
cause, the Depositor by a Depositor Order shall promptly appoint a
successor Trustee. If within one year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Trustee
acceptable to the Rating Agency shall be appointed by Act of the
Certificateholders representing more than fifty percent (50%) of the
Aggregate Current Stated Principal Balance of the Outstanding Certificates
delivered to the Depositor and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee and supersede the successor Trustee appointed
by the Depositor. If no successor Trustee shall have been so appointed by
the Depositor or the Certificateholders and shall have accepted appointment
in the manner hereinafter provided, any Certificateholder who has been a
bona fide Certificateholder for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Depositor shall give to the Certificateholders notice of each
resignation and each removal of the Trustee and each appointment of a
successor Trustee. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.
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(g) The provisions of this Section 7.10 shall apply to any co-trustee
or separate trustee appointed by the Depositor and the Trustee pursuant to
Section 7.13 hereof.
Section 7.11. Acceptance of Appointment by Successor.
(a) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Depositor and the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee.
Notwithstanding the foregoing, on request of the Depositor or the successor
Trustee, such retiring Trustee shall, upon payment of its fees, expenses
and other charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder subject
nevertheless to its lien, if any, provided for in Section 7.07. Upon
request of any such successor Trustee, the Depositor shall execute and
deliver any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
(b) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under Sections 7.08 and 7.09.
(c) Notwithstanding the replacement of the Trustee, the obligations of
the Depositor pursuant to Section 7.07 shall continue for the benefit of
the retiring Trustee.
Section 7.12. Merger, Conversion, Consolidation or Succession to Business
of Trustee. Any corporation or national banking association into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation, bank, trust company or national banking association resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation, bank, trust company or national banking association
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder if such corporation,
bank, trust company or national banking association shall be otherwise qualified
and eligible under Section 7.08 hereof, without the execution or filing of any
paper or any further act on the part of any of the parties hereto. In case any
Certificates have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Certificates so authenticated with the same effect as if such successor Trustee
had authenticated such Certificates.
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Section 7.13. Co-trustees and Separate Trustees.
(a) At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction in which any of the Trust Property may at
the time be located, the Depositor and the Trustee shall have power to
appoint, and, upon the written request of the Trustee or of the
Certificateholders representing more than fifty percent (50%) of the
Aggregate Current Stated Principal Balance of the Outstanding Certificates,
the Depositor shall for such purpose join with the Trustee in the
execution, delivery and performance of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the Trustee
either to act as co-trustee, jointly with the Trustee, of all or any part
of the Trust Property, or to act as separate trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section 7.13. If the
Depositor does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case an Event of Insolvency has
occurred and is continuing, the Trustee alone shall have power to make such
appointment.
(b) Should any written instrument from the Depositor be required by
any co-trustee or separate trustee so appointed for more fully confirming
to such co-trustee or separate trustee such property, title, right or
power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Depositor.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms:
(i) The Certificates shall be authenticated and delivered and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder, shall
be exercised solely by the Trustee.
(ii) The rights, powers, duties and obligations hereby conferred
or imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or
performed by the Trustee or by the Trustee and such co-trustee or
separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent
that under any law of any jurisdiction in which any particular act is
to be performed, the Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed solely by such co-trustee
or separate trustee.
(iii) The Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Depositor evidenced by an
Depositor Order, may accept the resignation of, or remove, any
co-trustee or separate trustee appointed under this Section 7.13, and,
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in case an Event of Insolvency has occurred and is continuing, the
Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the
Depositor. Upon the written request of the Trustee, the Depositor
shall join with the Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate
such resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section 7.13.
(iv) No co-trustee or separate trustee hereunder shall be
financially or otherwise liable by reason of any act or omission of
the Trustee, or any other such trustee hereunder, and the Trustee
shall not be financially or otherwise liable by reason of any act or
omission of any co-trustee or other such separate trustee hereunder.
(v) Any Act of Certificateholders delivered to the Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
Section 7.14. Books and Records. The Trustee agrees to provide to the
Certificateholders the right during normal business hours upon prior reasonable
notice in writing to inspect its books and records insofar as the books and
records relate to the functions and duties of the Trustee pursuant to this
Agreement.
Section 7.15. Control by Certificateholders. With Certificateholder
Approval and upon the Trustee being adequately indemnified in writing to its
satisfaction, the Certificateholders shall have the right to direct the Trustee
with respect to any action or inaction by the Trustee hereunder, the exercise of
any trust or power conferred on the Trustee, or the conduct of any proceeding
for any remedy available to the Trustee with respect to the Certificates or the
Trust Property provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Agreement or expose the Trustee to financial or other liability
or be unduly prejudicial to the Certificateholders not joining therein;
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(c) except as expressly provided otherwise herein, the Trustee shall
have the authority to take any enforcement action which it reasonably deems
to be necessary to enforce the provisions of this Agreement.
Section 7.16. Suits for Enforcement. If an Event of Insolvency or Event of
Servicing Default shall occur and be continuing, the Trustee, in its discretion,
may proceed to protect and enforce its rights and the rights of any
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
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any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee or any
Certificateholders, but in no event shall the Trustee be liable for any failure
to act in the absence of direction from the Certificateholders as contemplated
by Section 7.15 hereof.
Section 7.17. Certificateholder Characterization. The Certificateholders
acknowledge and agree to treat the Certificates as undivided interests in the
Trust Property, subject to the retention by the Depositor of a series of
stripped coupons, as described in Section 1286 of the Code. The Depositor, the
Seller, the Trustee and each Certificateholder hereby agrees to file all tax
returns and associated forms and reports in a manner consistent with the
foregoing characterization of the Certificates as representing an undivided
interest in the Receivables.
Section 7.18. Documents Held by the Trustee as Custodian; Indication of
Depositor Ownership; Inspection and Release of Custodian Files.
(a) The Trustee, upon the execution and delivery of this Agreement, is
hereby irrevocably appointed as custodian, and hereby accepts such
appointment, to hold and maintain physical possession of the Custodian
Files (in such capacity together with its successors in such capacity, the
"Custodian"). The Custodian Files are to be delivered to the Custodian by
or on behalf of the Seller within ten (10) Business Days following the
Closing Date or Funding Date, as the case may be, with respect to each
Receivable acquired on the Closing Date or Funding Date. The Depositor
shall cause the Seller (i) on or prior to the Closing Date, to file or
cause to be filed, appropriate Perfection UCC's and Termination Statements
with respect to the Trust Property conveyed hereunder and (ii) to deliver
date stamped copies of the Perfection UCC's and Termination Statements to
the Custodian within 30 days of the Closing Date or Funding Date, as the
case may be.
(b) Within five Business Days of its receipt of the original
Contracts, the Custodian shall stamp each such Contract with language
substantially as follows: This contract has been sold, transferred and
assigned to Western Fidelity Finance, Inc. (the "Purchaser") and the
Purchaser has sold, transferred and assigned all of its right, title and
interest in this contract to the Trustee for the benefit of the
Certificateholders.
(c) The Custodian shall (i) within 120 days after the Closing Date or
Funding Date, as the case may be, review 100% of the Custodian Files to
verify the presence of an original certificate of title with respect to
each Receivable, and (ii) within 45 days after the Closing Date or Funding
Date, as the case may be, review its files to determine that the Perfection
UCCs and Termination Statements have been delivered to the Custodian. The
Custodian shall, within five (5) Business Days of each of the foregoing
inspections, deliver a Trustee Receipt to the Placement Agent, the Rating
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Agency, the Supervisory Servicer, the Seller, the Depositor and the
Certificateholders. With respect to any Receivable for which any of the
foregoing documents has not been delivered to the Custodian or corrected
before delivery by the Custodian of a Trustee Receipt with respect to such
Custodian File, the Depositor shall remove or cause the removal of the
Nonconforming Receivable from the Trust Property, and the Depositor shall
cause the Seller to repurchase such Nonconforming Receivable and deposit
the Repurchase Price in the Collection Account pursuant to Section 2.15
hereof. Other than the reviews set forth in this paragraph, the Custodian
shall have no duty or obligation to review any of the Custodian Files.
(d) The Custodian agrees to maintain the Custodian Files which are
delivered to it at the offices of the Custodian as shall from time to time
be identified to the Trustee by written notice. Subject to the foregoing,
the Trustee may temporarily move individual Custodian Files or any portion
thereof without notice as necessary to allow the Servicer to conduct
collection and other servicing activities in accordance with its customary
practices and procedures. The Depositor shall cause the Servicer and each
Successor Servicer to take whatever actions are required subject to the
other provisions of the Servicing Agreement, including, but not limited to,
the filing of financing statements, as a result of relocating the Custodian
Files, if any, to maintain the perfection of the Trustee's and the
Certificateholders' right, title and interest in and to the Receivables and
the Custodian Files.
(e) The Custodian shall have and perform the following powers and
duties:
(i) hold the Custodian Files for the benefit of all present and
future Certificateholders, and maintain a current inventory thereof;
(ii) carry out such policies and procedures in accordance with
its customary actions with respect to the handling and custody of the
Custodian Files so that the integrity and physical possession of the
Custodian Files will be maintained; and
(iii) promptly release the original Receivable or the original
certificate of title to a Financed Vehicle then held by it to the
Servicer upon receipt of a written request for release of documents
certified by an officer of the Servicer, substantially in the form of
Exhibit D to the Servicing Agreement, with respect to the matters
therein; provided, however that the Custodian shall be deemed to have
received proper instructions with respect to the Custodian Files upon
its receipt of written instructions from the Servicer in the form of
Exhibit D to the Servicing Agreement.
In performing its duties as custodian, the Custodian agrees to act
with reasonable care, using that degree of skill and care that it exercises
with respect to similar contracts owned or held by it.
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(f) With respect to all Receivables released from the Trust, the
Trustee shall assign, without recourse, representation or warranty, to the
appropriate Person as directed by the Depositor all the Trustee's right,
title and interest in and to such Receivable and Trust Property appurtenant
thereto, such assignment being in the form as prepared by the Servicer and
acceptable to the Trustee. Such Person will thereupon own such Receivable
and related Trust Property appurtenant thereto free of any further
obligation to the Trustee or the Certificateholders with respect thereto.
The Trustee shall also execute and deliver all such other instruments or
documents as shall be reasonably requested by any such Person to be
required or appropriate to effect a valid transfer of title to a Receivable
and the Trust Property appurtenant thereto.
ARTICLE VIII
EVENT OF INSOLVENCY
Section 8.01. Event of Insolvency.
(a) If the Depositor shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, marshalling of assets and
liabilities or similar proceedings or relating to the Depositor or relating
to all or substantially all of the property of the Depositor, or a decree
or order of a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator or receiver or
liquidator in any insolvency, marshalling of assets and liabilities or
similar proceedings shall have been entered against the Depositor; or the
Depositor shall admit in writing its inability to pay all or substantially
all of its debts generally as they become due, file a petition or have a
petition filed against it to take advantage of any applicable insolvency or
reorganization statute or make an assignment of all or substantially all of
its property for the benefit of its creditors and, any such event shall be
continuing and Certificateholders constituting Certificateholder Approval
shall have directed the Trustee to declare an event of insolvency (an
"Event of Insolvency"), the Trustee shall in its discretion do one of the
following (unless such direction shall specify otherwise):
(i) institute proceedings for the collection of all amounts then
distributable on the Certificates or under this Agreement, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Trust Property moneys adjudged due;
(ii) sell the Trust Property or any portion thereof or rights or
interests therein at one or more public or private sales called and
conducted in any manner permitted by law;
(iii) institute proceedings from time to time for the complete or
partial disposition of the Trust Property; or
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(iv) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights
and remedies of the Trustee or the Certificateholders hereunder.
(b) Notwithstanding the foregoing, the Trustee shall have no authority
to perform any act which, if consummated, would cause the Trust to fail to
be characterized as a grantor trust for federal income tax purposes.
Moreover, the Trustee shall have no authority to perform any act which
would be inconsistent with the treatment of the Trust as owner of the
Receivables for federal income tax purposes.
Section 8.02. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, composition or other judicial proceeding relative to the Depositor
or any other obligor upon the Certificates or the property of the Depositor or
of such other obligor or their creditors, the Trustee (irrespective of whether
the Certificates shall then be due and payable as therein expressed or by
declaration or otherwise) shall be entitled and empowered, by intervention in
such proceeding or otherwise, to
(a) file and prove a claim for the whole amount owing and unpaid in
respect of the Certificates issued hereunder and to file such other papers
or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Certificateholders allowed in such proceeding, and
(b) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such proceeding is hereby authorized by each
Certificateholder to make such distributions to the Trustee and, in the event
that the Trustee shall consent to the making of such distributions directly to
the Certificateholders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize and consent to or accept or adopt on behalf of any Certificateholder
any plan of reorganization, arrangement, adjustment, or composition affecting
any of the Certificates or the rights of any Certificateholder thereof, or to
authorize the Trustee to vote in respect of the claim of any Certificateholder
in any such proceeding.
Section 8.03. Trustee May Enforce Claim 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 for the benefit of the Certificateholders, and any recovery of
judgment shall be applied first, to the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 7.07 hereof and, second, for the
ratable benefit of the Certificateholders.
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Section 8.04. Knowledge of Trustee. Any references herein to the knowledge,
discovery or learning of the Trustee shall mean and refer to a Responsible
Officer of the Trustee; provided, that the Trustee shall from time to time
notify the Depositor of the name or names of Responsible Officers.
ARTICLE IX
[RESERVED]
ARTICLE X
SUPPLEMENTAL AGREEMENTS
Section 10.01. Supplemental Agreements Without Certificateholder Approval.
(a) Without the consent of the Certificateholders, the Depositor and
the Trustee, when authorized by an Depositor Order, at any time and from
time to time, may enter into one or more agreements supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(i) to correct, amplify or add to the description of any property
at any time subject to the lien of this Agreement, or better to
assure, convey and confirm unto the Trustee any property subject or
required to be subjected to the lien of this Agreement, or to subject
to the lien of this Agreement additional property;
(ii) to evidence the succession of another Person to either the
Depositor or the Trustee, and the assumption by any such successor of
the covenants of the Depositor or the Trustee contained herein and in
the Certificates;
(iii) to add to the covenants of the Depositor or the Trustee,
for the benefit of the Certificateholders or to surrender any right or
power herein conferred upon the Depositor; or
(iv) to effect any matter specified in Section 10.07 hereof.
(b) Promptly after the execution by the Depositor and the Trustee of
any supplemental agreement pursuant to this Section 10.01, the Trustee
shall mail to the Certificateholders and the Rating Agency a copy of such
supplemental agreement. Any failure of the Trustee to mail such copy shall
not, however, in any way impair or affect the validity of any such
supplemental agreement.
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(c) Notwithstanding anything herein to the contrary, the Trustee shall
have no power to perform any act which, if consummated, would cause the
Trust to fail to be characterized as a grantor trust for federal income tax
purposes.
Section 10.02. Supplemental Agreements With Consent of Certificateholders.
(a) With the consent of each Certificateholder affected thereby and
written confirmation from the Rating Agency that the ratings then assigned
to the Certificates will not be downgraded, the Depositor and the Trustee,
when authorized by an Depositor Order, may enter into an agreement or
agreements supplemental hereto 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 under this Agreement for the following purposes:
(i) change the Final Scheduled Distribution Date of the principal
of any Certificate, or the due date of any distribution of interest on
any Certificate, or reduce the principal amount thereof, or the
interest rate thereon, change the place of distribution where, or the
coin or currency in which any Certificate or any interest thereon is
distributable, or impair the right to institute suit for the
enforcement of the distribution of interest due on any Certificate on
or after the due date thereof or for the enforcement of the
distribution of the entire remaining unpaid principal amount of any
Certificate on or after the maturity date thereof or change any
provision of Article VI hereof;
(ii) reduce the percentage of the Current Stated Principal
Balance of the Outstanding Certificates, the consent of the
Certificateholders of which is required to approve any such
supplemental agreement, or the consent of the Certificateholders of
which is required for any waiver of compliance with provisions of this
Agreement or Events of Servicing Default hereunder or under the
Servicing Agreement and their consequences provided for in this
Agreement or for any other purpose hereunder;
(iii) modify any of the provisions of this Section 10.02;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding"; or
(v) permit the creation of any other lien with respect to any
part of the Trust Property, terminate the lien of this Agreement or
release any Trust Property at any time subject hereto or, except with
respect to any action which would not have a material adverse effect
on any Certificateholder (as evidenced by an Opinion of Counsel to
such effect), deprive the Certificateholder of the security afforded
by the lien of this Agreement.
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(b) With the consent of the Certificateholders constituting a
majority of the Certificates by principal balance then Outstanding,
the Depositor and the Trustee, when authorized by an Depositor Order,
at any time and from time to time, may enter into one or more
agreements supplemental hereto, in form and substance satisfactory to
the Trustee and the Rating Agency for the purpose of modifying,
eliminating or adding to the provisions of this Agreement; provided,
that such supplemental agreements shall not have any of the effects
described in paragraphs (i) through (v) of Section 10.02(a) of this
Agreement.
(c) Promptly after the execution by the Depositor and the Trustee
of any supplemental agreement pursuant to this Section 10.02, the
Trustee shall mail to the Certificateholders and the Rating Agency a
copy of such supplemental agreement. Any failure of the Trustee to
mail such copy shall not, however, in any way impair or affect the
validity of any such supplemental agreement.
(d) Whenever the Depositor or the Trustee solicits a consent to
any amendment or supplement to the Agreement, the Depositor or the
Trustee shall fix a record date in advance of the solicitation of such
consent for the purpose of determining the Certificateholders entitled
to consent to such amendment or supplement. Only those
Certificateholders at such record date shall be entitled to consent to
such amendment or supplement whether or not such Certificateholders
continue to be Holders after such record date. The date fixed as the
record date shall be at least 30 days prior to the date the consents
are due.
Section 10.03. Supplemental Agreements Without Consent of
Certificateholders. Without first obtaining the consent of any
Certificateholder, the Depositor and the Trustee, when authorized by an
Depositor Order, may enter into an agreement or agreements supplemental hereto
to cure any ambiguity, to correct or supplement any provision herein which may
be defective or inconsistent with any other provision herein, or to amend any
other provisions with respect to matters or questions arising under this
Agreement; provided, however, that such action shall not adversely affect the
interests of any Certificateholder.
Section 10.04. Execution of Supplemental Agreements. In executing, or
accepting the additional trusts created by, any supplemental agreement permitted
by this Article X or the modifications thereby of the trusts created by this
Agreement, the Trustee shall be entitled to receive, and (subject to Section
7.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental agreement is authorized or permitted by
this Agreement. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Agreement or otherwise.
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Section 10.05. Effect of Supplemental Agreements. Upon the execution of any
supplemental agreement under this Article X, this Agreement shall be modified in
accordance therewith, and such supplemental agreement shall form a part of this
Agreement for all purposes; and every Holder of Certificates which have
theretofore been or thereafter are authenticated and delivered hereunder shall
be bound thereby.
Section 10.06. Reference in Certificates to Supplemental Agreements.
Certificates authenticated and delivered after the execution of any supplemental
agreement pursuant to this Article X may, and if required by the Depositor
shall, bear a notation in form approved by the Trustee as to any matter provided
for in such supplemental agreement. If the Depositor shall so determine, new
Certificates so modified as to conform, in the opinion of the Trustee and the
Depositor, to any such supplemental agreement may be prepared and executed by
the Depositor and authenticated and delivered by the Trustee in exchange for
Outstanding Certificates.
Section 10.07. Trustee To Act on Instructions. Notwithstanding any
provision herein to the contrary (other than Sections 8.01(b) and 10.02), in the
event the Trustee is uncertain as to the intention or application of any
provision of this Agreement or such intention or application is ambiguous as to
its purpose or application, or is, or appears to be, in conflict with any other
applicable provision hereof, or if this Agreement permits or does not prohibit
any determination by the Trustee or is silent or incomplete as to the course of
action which the Trustee is required or is permitted or may be permitted to take
with respect to a particular set of facts or circumstances, the Trustee shall,
at the expense of the Depositor, request and rely upon the following: (i)
written instructions of the Depositor directing the Trustee to take certain
actions or refrain from taking certain actions, which written instructions shall
contain a certification that the taking of such actions or refraining from
taking certain actions is in the best interest of the Certificateholders, and
(ii) a written statement from the Rating Agency that the proposed action or
inaction will not have an adverse effect on the ratings then assigned to the
Certificates. In such case, the Trustee shall have no liability to the Depositor
or the Certificateholders for, and the Depositor hereby holds harmless the
Trustee from, any liability, costs or expenses arising from or relating to any
action taken by the Trustee acting upon such instructions, and the Trustee shall
have no responsibility to the Certificateholders with respect to any such
liability, costs or expenses.
ARTICLE XI
[RESERVED]
ARTICLE XII
MISCELLANEOUS
Section 12.01. Compliance Certificates and Opinions; Furnishing of
Information. Upon any application or request by the Depositor to the Trustee to
take any action under any provision of this Agreement, the Depositor shall
furnish to the Trustee a certificate stating that all conditions precedent, if
92
any, provided for in this Agreement relating to the proposed action have been
complied with or an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of certificates and Opinions of Counsel are specifically required by any
provision of this Agreement relating to such particular application or request,
no additional certificate or Opinion of Counsel need be furnished. The Trustee
agrees to provide all information which may reasonably be requested by the
Supervisory Servicer to enable the Supervisory Servicer to conduct all tests and
to make all reports specified in the Servicing Agreement.
Section 12.02. Form of Documents Delivered to Trustee.
(a) If several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters, and any such Person
may certify or give an opinion as to such matters in one or several
documents.
(b) Any certificate or opinion of an Authorized Officer of the
Depositor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by outside counsel, unless
such Authorized Officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous.
Any such certificate or opinion or any Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of,
or representations by, an Authorized Officer of the Depositor, stating that
the information with respect to such factual matters is in the possession
of the Depositor or such Person, unless such officer or counsel knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous. Any
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such
other counsel's opinion and shall include a statement to the effect that
such counsel believes that such counsel and the Trustee may reasonably rely
upon the opinion of such other counsel.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, notes, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated
and form one instrument.
(d) Wherever in this Agreement, in connection with any application or
certificate or report to the Trustee, it is provided that the Depositor or
the Servicer shall deliver any document as a condition of the granting of
such application, or as evidence of the Depositor's or the Servicer's
compliance with any term hereof, it is intended that the truth and
accuracy, at the time of the granting of such application or at the
effective date of such note or report (as the case may be), of the facts
and opinions stated in such document shall in such case be conditions
precedent to the right of the Depositor to have such application granted or
to the sufficiency of such note or report. The foregoing
93
shall not, however, be construed to affect the Trustee's right to rely upon
the truth and accuracy of any statement or opinion contained in any such
document as provided in Section 7.01(b)(ii).
(e) Wherever in this Agreement it is provided that the absence of the
occurrence and continuation of an Event of Servicing Default is a condition
precedent to the taking of any action by the Trustee at the request or
direction of the Depositor, then notwithstanding that the satisfaction of
such condition is a condition precedent to the Depositor's or the Trustee's
right to make such request or direction, the Trustee shall be protected in
acting in accordance with such request or direction if it does not have
actual knowledge of the occurrence and continuation of such Event of
Servicing Default.
Section 12.03. Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such
Certificateholders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee,
and, where it is hereby expressly required, to the Depositor. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and (subject to
Section 7.01) conclusive in favor of the Trustee and the Depositor, if made
in the manner provided in this Section 12.03.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgements of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Whenever such execution is by an officer of a
corporation or a member of a partnership on behalf of such corporation or
partnership, such certificate or affidavit shall also constitute sufficient
proof of his authority.
(c) The ownership of Certificates shall be proved by the Certificate
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificates shall bind the
Holder of every Certificate issued upon the registration or transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything
done, omitted or suffered to be done by the Trustee or the Depositor in
reliance thereon, whether or not notation of such action is made upon such
Certificates.
94
Section 12.04. Notices, Etc. to Trustee and Depositor.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or Act of Certificateholders or other documents provided or
permitted by this Agreement to be made upon, given or furnished to, or
filed with
(i) the Trustee by any Certificateholder, or by the Depositor
shall be in writing and shall be delivered personally or mailed by
first-class registered or certified mail, postage prepaid, or by
telephonic facsimile transmission and overnight delivery service,
postage prepaid, and received by, a Responsible Officer of the Trustee
at its Corporate Trust Office listed below, or
(ii) the Depositor by the Trustee or by any Certificateholder
shall be in writing and shall be delivered personally or mailed by
first-class registered or certified mail, postage prepaid, or by
telephonic facsimile transmission and overnight delivery service,
postage prepaid, at the address listed below or at any other address
previously furnished in writing to the Trustee by the Depositor.
To the Trustee: Texas Commerce Bank National Association
600 Travis Street, 8th Floor
Houston, Texas 77002
Attention: Global Trust Services Group - Western
Fidelity 1996-A
Phone: (713) 216-4181
FAX: (713) 216-7757
To the Depositor: Western Fidelity Finance, Inc.
4704 Harlan Street, Suite 260
Denver, Colorado 80212
Attention: Marya L. Brancio
Phone: (800) 223-9334
FAX: (303) 477-2158
with a copy to: Dorsey & Whitney LLP
370 Seventeenth Street, Suite 4400
Denver, Colorado 80202
Attention: Kevin A. Cudney
Phone: (303) 629-3400
95
Section 12.05. Notices and Reports to Certificateholders; Waiver of
Notices.
(a) Where this Agreement provides for notice to Certificateholders of
any event or the mailing of any report to the Certificateholders, such
notice or report shall be written and shall be sufficiently given (unless
otherwise herein expressly provided) if mailed, first-class, postage
prepaid, to each Certificateholder affected by such event or to whom such
report is required to be mailed, at the address of such Certificateholder
as it appears on the Certificate Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice or the mailing of such report. In any case where a notice or report
to Certificateholders is mailed in the manner provided above, neither the
failure to mail such notice or report, nor any defect in any notice or
report so mailed, to any particular Certificateholder shall affect the
sufficiency of such notice or report with respect to other
Certificateholders, and any notice or report which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given or
provided.
(b) Where this Agreement provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Certificateholders shall be
filed with the Trustee, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
(c) If, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Certificateholders when such
notice is required to be given pursuant to any provision of this Agreement,
then any manner of giving such notice as shall be satisfactory to the
Trustee shall be deemed to be a sufficient giving of such notice.
Section 12.06. Rules by Trustee. The Trustee may make reasonable rules for
any meeting of Certificateholders.
Section 12.07. Depositor Obligation. No recourse may be taken, directly or
indirectly, against (i) any incorporator, subscriber to the capital stock,
stockholder, officer, employee, agent or director of the Depositor or of any
predecessor of the Depositor, (ii) any partner, beneficiary, agent, officer,
director, employee, or successor or assign of a holder of a beneficial interest
in the Depositor, (iii) any incorporator, subscriber to the capital stock,
stockholder, officer, director, employee or agent of the Trustee or any
predecessor or successor of the Trustee, (iv) any incorporator, subscriber to
the capital stock, stockholder, officer, director, employee or agent of the
Supervisory Servicer or any predecessor or successor of the Supervisory
Servicer, or (v) any incorporator, subscriber to capital stock, stockholder,
officer, director, employee or agent of the Trustee or any predecessor or
successor thereof, with respect to the Depositor's obligations with respect to
the Certificates or any of the statements, representations, covenants,
warranties or obligations of the Depositor under this Agreement or any note or
other writing delivered in connection herewith or therewith.
96
Section 12.08. Enforcement of Benefits. The Trustee and the
Certificateholders shall be entitled to enforce the covenants and agreements of
the Servicer, the Supervisory Servicer, and the Seller contained in the Transfer
and Assignment Agreement and the Servicing Agreement.
Section 12.09. Effect of Headings and Table of Contents. The Section and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 12.10. Successors and Assigns. All covenants and agreements in this
Agreement by the Depositor and the Trustee shall bind their respective
successors and assigns, whether so expressed or not.
Section 12.11. Separability. If any provision in this Agreement or in the
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement, a provision as similar in its terms and purpose to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.
Section 12.12. Benefits of Agreement. Nothing in this Agreement or in the
Certificates, expressed or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any separate trustee or
co-trustee appointed under Section 7.13 and the Certificateholders, any benefit
or any legal or equitable right, remedy or claim under this Agreement.
Section 12.13. Legal Holidays. If the date of any Distribution Date or any
other date on which principal of or interest on any Certificate is proposed to
be distributed or any date on which mailing of notices by the Trustee to any
Person is required pursuant to any provision of this Agreement, shall not be a
Business Day, then (notwithstanding any other provision of the Certificates or
this Agreement) distribution or mailing of such notice need not be made on such
date, but may be made or mailed on the next succeeding Business Day with the
same force and effect as if made or mailed on the nominal date of any such
Distribution Date or other date for the distribution of principal of or interest
on any Certificate, or as if mailed on the nominal date of such mailing, as the
case may be, and in the case of distributions, no interest shall accrue for the
period from and after any such nominal date, provided such distribution is made
in full on such next succeeding Business Day.
Section 12.14. Governing Law. In view of the fact that Certificateholders
are expected to reside in many States and the desire to establish with certainty
that this Agreement will be governed by and construed and interpreted in
accordance with the law of a State having a well-developed body of commercial
and financial law relevant to transactions of the type contemplated herein, this
Agreement and each Certificate shall be construed in accordance with and
governed by the substantive laws of the State of New York (without regard to
conflict of law provisions) applicable to agreements made and to be performed
therein.
97
Section 12.15. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 12.16. Recording of Agreement. This Agreement is subject to
recording in any appropriate public recording offices, such recording to be
effected by the Depositor and at its expense in compliance with any Opinion of
Counsel delivered hereunder.
Section 12.17. Further Assurances. The Depositor agrees to do and perform,
from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the Trustee more fully to effect
the purposes of this Agreement, including, without limitation, the execution of
any financing statements or continuation statements relating to the Trust
Property for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 12.18. No Bankruptcy Petition Against the Depositor. The Trustee
agrees (and each Certificateholder by its acceptance of the Certificates shall
be deemed to agree) that, prior to the date that is one year and one day after
the payment in full of all outstanding Certificates, it will not institute
against the Depositor, or join any other Person in instituting against the
Depositor, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other proceedings under the laws of the United States
or any state of the United States. This Section 12.18 shall survive the
termination of this Agreement.
Section 12.19. Force Majeure. Notwithstanding anything herein to the
contrary, the Trustee shall not be considered in default hereunder or have any
liability to any party for any failure to perform if such failure arises solely
out of the following causes beyond the control of the Trustee: acts of God or a
public enemy, fire, flood or war.
ARTICLE XIII
TERMINATION
Section 13.01. Termination of the Trust.
(a) The Trust and the respective obligations of the Depositor and the
Trustee created by this Agreement (except such obligations as are
hereinafter set forth) shall terminate upon the earliest of (i)
distribution to the Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement and the disposition of all
property held as part of the Trust Property, (ii) the purchase as of any
Distribution Date by the Depositor, at its option, of the corpus of the
Trust as described in Article VI, (iii) the latest Final Scheduled
Distribution Date or (iv) subject to Section 13.01(c), 90 days after the
Dissolution of the Depositor. The Depositor shall promptly notify the
Trustee of any prospective termination pursuant to this Section 13.01.
98
(b) Notice of any prospective termination, specifying the Distribution
Date for payment of the final distribution and requesting the surrender of
the Certificates for cancellation, shall be given promptly by the Trustee
by letter to Certificateholders mailed not earlier than the 15th day and
not later than the 25th day of the month next preceding the specified
Distribution Date stating (i) the Distribution Date upon which final
distribution of the Certificates shall be made and (ii) the amount of any
such final distribution. Surrender of the Certificates shall not be a
condition of payment of the final distribution; however, each
Certificateholder, by accepting the Certificates, hereby agrees to
indemnify and hold harmless the Trustee, the Depositor and the Certificate
Registrar from and against any and all claims arising from such failure,
including, but not limited to, claims by third parties claiming to be bona
fide purchasers subsequently presenting such Certificates for payment.
(c) The Depositor shall not voluntarily take any action that would
cause it to cease being deemed a general partner of the Trust if the Trust
were deemed a limited partnership formed under the Delaware Revised Uniform
Limited Partnership Act and the Residual Interest were deemed to represent
the sole general partnership interest in such a partnership.
In the event of the Dissolution of the Depositor or any action that
would cause the Depositor to cease being deemed a general partner of the
Trust if the Trust were deemed a limited partnership formed under the
Delaware Revised Uniform Limited Partnership Act and the Residual Interest
were deemed to represent the sole general partnership interest in such a
partnership, the Trust shall terminate 90 days after the date of such event
and its assets liquidated in accordance with Section 13.01(d) unless:
(i) The Certificateholders representing Majority Consent
(excluding any Certificates then held by the Depositor) inform the
Trustee in writing before the end of such 90 day period that they
disapprove of the liquidation of the assets of the Trust; and
(ii) The Depositor and the Trustee shall receive an Opinion of
Counsel from independent counsel to the effect that the continuation
of the Trust shall not cause the Trust to be treated as an association
taxable as a corporation for federal income tax purposes.
During any period that the Certificates are outstanding, the Depositor
agrees that it shall not voluntarily take action that will cause the
Dissolution of the Depositor.
If the Trust will be terminated and its assets liquidated in
accordance with this Section 13.01(c), the Trustee shall act as liquidator
of the assets of the Trust, but shall continue to have all the powers,
rights and duties of the Trustee hereunder, under the Servicing Agreement
and the Transfer and Assignment Agreement until the disposition of the
assets of the Trust and the final distribution to the Certificateholders
and the Trustee of all amounts required to be paid to them pursuant to this
Agreement.
99
(d) Upon receipt by the Trustee from the Depositor of notice of any
prospective termination of the Trust pursuant to Section 13.01(a)(iii) or
(iv), the Trustee shall, subject to the direction of the Certificateholders
representing Majority Consent (provided that, if such Certificateholders
shall not have provided such direction to the Trustee within 30 days of the
Trustee having sent a written request for such direction to the
Certificateholders, the Trustee shall proceed without such direction) sell
the remaining assets of the Trust, if any, at public or private sale, in a
commercially reasonable manner and on commercially reasonable terms. The
Depositor agrees to cooperate with the Trustee to effect any such sale,
including by executing such instruments of conveyance or assignment as
shall be necessary or required by the purchaser. Proceeds of sale, net of
expenses, shall be treated as collections on the assets of the Trust and
shall be deposited into the Revenue Fund. On the Distribution Date
specified for final distribution, the Trustee shall cause to be distributed
to Certificateholders and the Depositor amounts distributable on such
Distribution Date pursuant to Article V.
Section 13.02. Notice. The Trustee shall give notice of termination of the
Trust to the Depositor and the Rating Agency.
100
IN WITNESS WHEREOF, the Depositor and the Trustee have caused this
Agreement to be duly executed as of the day and year first above written.
WESTERN FIDELITY FINANCE, INC., as
Depositor
By /s/ Gene E. Osborn
----------------------------------------
Gene E. Osborn, President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By /s/ / Eric C. Lokker
----------------------------------------
Eric C. Lokker, Assistant Vice President
Confirmed and Agreed with
respect to Sections 2.16, 5.02, 5.10 and 7.07(a):
WESTERN FIDELITY FUNDING,
INC., as Seller
By /s/ Gene E. Osborn
---------------------------------------
Gene E. Osborn, President
101
EXHIBIT A
FORM OF CLASS A CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),OR UNDER THE SECURITIES OR BLUE
SKY LAWS OF ANY STATE IN THE UNITED STATES OR ANY FOREIGN SECURITIES LAWS. BY
ITS ACCEPTANCE OF THIS CERTIFICATE, THE HOLDER OF THIS CERTIFICATE IS DEEMED TO
REPRESENT TO THE DEPOSITOR AND THE TRUSTEE THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING SUCH
CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (EACH OF WHICH OTHERS IS ALSO A QUALIFIED
INSTITUTIONAL BUYER).
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE BY ANY PERSON
UNLESS EITHER (i) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO THE DEPOSITOR,
(ii) SO LONG AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO A
PERSON WHOM THE ISSUER REASONABLY BELIEVES AFTER DUE INQUIRY IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A), ACTING FOR ITS OWN ACCOUNT (AND
NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (EACH OF
WHICH OTHERS IS ALSO A QUALIFIED INSTITUTIONAL BUYER) TO WHOM NOTICE IS GIVEN
THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR
(iii) SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN WHICH CASE
(A) THE TRUSTEE SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE
PROSPECTIVE TRANSFEREE CERTIFY TO THE TRUSTEE AND THE DEPOSITOR IN WRITING THE
FACTS SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION SHALL BE IN FORM AND
SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND (B) THE TRUSTEE
SHALL REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF
THE DEPOSITOR OR THE TRUSTEE) SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE TO
THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT. NO SALE,
PLEDGE OR OTHER TRANSFER MAY BE MADE TO ANY ONE PERSON FOR CERTIFICATES WITH AN
INITIAL FACE AMOUNT OF LESS THAN $100,000 AND, IN THE CASE OF ANY PERSON ACTING
ON BEHALF OF ONE OR MORE THIRD PARTIES (OTHER THAN A BANK (AS DEFINED IN SECTION
3(a)(2) OF THE SECURITIES ACT) ACTING IN ITS FIDUCIARY CAPACITY), FOR
CERTIFICATES WITH A FACE AMOUNT OF LESS THAN $100,000 FOR EACH SUCH THIRD PARTY.
A-1
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY EMPLOYEE BENEFIT
PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED ("SECTION 4975") (A "PLAN") OR A PERSON THAT IS USING THE
ASSETS OF A PLAN TO ACQUIRE THIS CERTIFICATE. ACCORDINGLY, TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR 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.
A-2
WESTERN FIDELITY RECEIVABLES TRUST 1996-A
PASS-THROUGH CERTIFICATES
CLASS A CERTIFICATE
CUSIP: 958184 AA1
NUMBER R-1 Original Stated Principal Balance:
Class A Pass-Through Rate: 7.50% per annum $
----------------------
Final Scheduled Distribution Date: September 15, 2002
Initial Class A Certificate Balance of all Class A Certificates: $19,640,000
THIS CERTIFIES THAT ------------------- is the registered owner of this
- --------- DOLLARS Class A Certificate. This Certificate evidences a fractional
undivided interest in the Western Fidelity Receivables Trust 1996-A (the
"Trust") (excluding the Residual Interest in the Trust), formed by Western
Fidelity Finance, Inc., a Delaware corporation (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of December 30,
1996 (the "Agreement") between the Depositor and Texas Commerce Bank National
Association, as trustee (the "Trustee"). The property of the Trust includes,
among other assets, a pool of motor vehicle retail installment sale contracts
secured by used automobiles, vans, minivans and light-duty trucks. (This Class A
Certificate does not represent an interest in or obligation of the Depositor or
any of the respective Affiliates thereof, except to the extent described below.)
A summary of certain of the pertinent provisions of the Agreement 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. The Stated Principal
Balance of this Class A Certificate will be decreased by the distributions on
this Class A Certificate in respect of principal as described in the Agreement.
Accordingly, following the initial issuance of the Class A Certificates, the
Stated Principal Balance of this Class A Certificate will over time be less than
the original denomination shown above. Anyone acquiring this Class A Certificate
may ascertain its Current Stated Principal Balance by inquiry of the Trustee.
This Certificate is one of the duly authorized Certificates designated as
"Pass-Through Certificates," issued in four Classes (Class A, Class B, Class C
and Class D, collectively, the "Certificates"). To the extent described in the
Agreement, the Class B, Class C and Class D Certificates are subordinate in
payment to the Class A Certificates, the Class C Certificates are subordinate in
payment to the Class A and Class B Certificates and the Class D Certificates are
subordinated in payment to the Class A, Class B and Class C Certificates. This
Class A Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class A
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The property of the Trust includes, without limitation, a pool of
motor vehicle retail installment sale contracts (the "Receivables") acquired on
the Closing Date and on Funding Dates (both as defined in the Agreement) secured
by new and used automobiles and light-duty trucks (the "Financed Vehicles"), all
moneys due thereunder after the applicable Cutoff Dates (as defined in the
Agreement), proceeds from claims on certain insurance policies and certain other
rights under the Agreement, all right, title and interest of the Depositor in
and to the Transfer and Assignment Agreement and any and all proceeds of the
foregoing.
A-3
This Class A Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder, at its
expense, upon a written request to the Trustee.
Under the Agreement, there will be distributed on the 15th day of each
month or, if such 15th day is not a Business Day, the next succeeding Business
Day (the "Distribution Date"), commencing with the Distribution Date occurring
in February 1997, to the person in whose name this Class A Certificate is
registered at the close of business on the last day of the Collection Period
preceding a Distribution Date or termination of the Trust (the "Record Date") an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, if any required to be distributed to the Holders of
all Class A Certificates.
All payments to Certificateholders shall be made on each Distribution Date
to each Certificateholder of record on the related Record Date by check, or, if
requested by a Certificateholder holding Certificates with Original Stated
Principal Balances in aggregate in excess of $1,000,000, by wire transfer to the
account designated in writing by such Holder delivered to the Trustee prior to
the Determination Date, in immediately available funds. Except as otherwise
provided in the Agreement and notwithstanding the above, the final distribution
on this Class A Certificate will be made after due notice by the Trustee of the
pendency of such distribution, which notice shall request that the
Certificateholder present and surrender this Class A Certificate at the office
or agency maintained for that purpose by the Trustee in Dallas, Texas. Surrender
of this Class A Certificate shall not be a condition of payment of the final
distribution; however, the Holder, by accepting this Class A Certificate, hereby
agrees to indemnify and hold harmless the Trustee, the Depositor and the
Certificate Registrar from and against any and all claims arising from such
failure to present and surrender this Class A Certificate, including, but not
limited to, claims by third parties claiming to be bona fide purchasers.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Trustee, by manual signature, this Class A
Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
The Class A Certificates do not represent a recourse obligation of, or an
interest in, the Depositor, the Supervisory Servicer, the Trustee or any
Affiliate of any of them. The Class A Certificates are limited in right of
payment to certain collections and recoveries respecting the Receivables, all as
more specifically set forth in the Agreement. A copy of the Agreement may be
examined during normal business hours at the principal office of the Depositor,
and at such other places, if any, designated by the Depositor, by any
Certificateholder upon request.
A-4
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement at any
time by the Depositor and the Trustee with the consent of the Holders of the
Certificates affected thereby voting as a class evidencing, in some cases, not
less than 51% of the Aggregate Current Stated Principal Balance of the
Outstanding Certificates and, in other cases, not less than 66-2/3% of the
Aggregate Current Stated Principal Balance of the Outstanding Certificates. Any
such consent by the Holder of this Class A Certificate shall be conclusive and
binding on such Holder and on all future Holders of this Class A Certificate and
of any Class A Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made upon this
Class A Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Class A Certificates.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Class A Certificate is registrable in the
Certificate Register upon surrender of this Class A Certificate for registration
of transfer at the offices or agencies maintained by the Trustee in its capacity
as Certificate Registrar, or by any successor Certificate Registrar, in Dallas,
Texas, or such other office of the Trustee maintained for such purpose and
designated by the Trustee in writing, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Class A Certificate
Registrar 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.
The Class A Certificates are initially issuable only as registered Class A
Certificates without coupons in denominations of $100,000 and integral multiples
of $5,000 in excess thereof, except that one Class A Certificate may be issued
in a different denomination. As provided in the Agreement and subject to certain
limitations set forth therein, Class A Certificates are exchangeable for new
Class A Certificates evidencing the same aggregate denomination, as requested by
the Holder surrendering the same. No service charge will be made to the Holder
for any such registration of transfer or exchange, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charges payable in
connection therewith.
The Trustee, the Certificate Registrar, and any agent of the Trustee or the
Certificate Registrar may treat the person in whose name this Class A
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Certificate Registrar, nor any such agent shall be affected by any
notice to the contrary.
The Trust created by the Agreement shall terminate upon the earliest of (i)
payment to the Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Trust Property, (ii) March 15, 2002 or (iii) subject to the Agreement, 90
days after the Dissolution of the Depositor. The Depositor may, at its option,
purchase the corpus of the Trust, in whole, at a price specified in the
Agreement, and such purchase will effect early retirement of the Certificates;
however, such right of purchase is exercisable only on a Distribution Date
following the last day of any Collection Period as of which the Receivable
Balance is less than or equal to 10% of the Original Receivable Balance.
A-5
IN WITNESS WHEREOF, the Trustee, not in its individual capacity but on
behalf of the Trust, has caused this Class A Certificate to be duly executed.
WESTERN FIDELITY RECEIVABLES TRUST
1996-A
By: TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By
----------------------------------------
Eric C. Lokker, Assistant Vice President
This is one of the Class A Certificates
referred to in the within-mentioned Agreement.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By
----------------------------------------
Eric C. Lokker, Assistant Vice President
Dated as of
- ---------------, ----
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 typewrite 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 Certificate Registrar,
with full power of substitution in the premises.
Dated:
---------------------------------------*
Name:
- ---------------
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Class A Certificate in every particular,
without alteration, enlargement or any change whatever.
A-7
EXHIBIT B
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT AS DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),OR UNDER THE SECURITIES OR BLUE
SKY LAWS OF ANY STATE IN THE UNITED STATES OR ANY FOREIGN SECURITIES LAWS. BY
ITS ACCEPTANCE OF THIS CERTIFICATE THE HOLDER OF THIS CERTIFICATE IS DEEMED TO
REPRESENT TO THE DEPOSITOR AND THE TRUSTEE THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING SUCH
CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (EACH OF WHICH OTHERS IS ALSO A QUALIFIED
INSTITUTIONAL BUYER).
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE BY ANY PERSON
UNLESS EITHER (i) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO THE DEPOSITOR,
(ii) SO LONG AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO A
PERSON WHOM THE ISSUER REASONABLY BELIEVES AFTER DUE INQUIRY IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A), ACTING FOR ITS OWN ACCOUNT (AND
NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (EACH OF
WHICH OTHERS IS ALSO A QUALIFIED INSTITUTIONAL BUYER) TO WHOM NOTICE IS GIVEN
THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR
(iii) SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN WHICH CASE
(A) THE TRUSTEE SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE
PROSPECTIVE TRANSFEREE CERTIFY TO THE TRUSTEE AND THE DEPOSITOR IN WRITING THE
FACTS SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION SHALL BE IN FORM AND
SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND (B) THE TRUSTEE
SHALL REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF
THE DEPOSITOR OR THE TRUSTEE) SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE TO
THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT. NO SALE,
PLEDGE OR OTHER TRANSFER MAY BE MADE TO ANY ONE PERSON FOR CERTIFICATES WITH AN
INITIAL FACE AMOUNT OF LESS THAN $100,000 AND, IN THE CASE OF ANY PERSON ACTING
ON BEHALF OF ONE OR MORE THIRD PARTIES (OTHER THAN A BANK (AS DEFINED IN SECTION
B-1
3(a)(2) OF THE SECURITIES ACT) ACTING IN ITS FIDUCIARY CAPACITY), FOR
CERTIFICATES WITH A FACE AMOUNT OF LESS THAN $250,000 FOR EACH SUCH THIRD PARTY.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY EMPLOYEE BENEFIT
PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED ("SECTION 4975") (A "PLAN") OR A PERSON THAT IS USING THE
ASSETS OF A PLAN TO ACQUIRE THIS CERTIFICATE. ACCORDINGLY, TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR 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.
B-2
WESTERN FIDELITY RECEIVABLES TRUST 1996-A
PASS-THROUGH CERTIFICATES
CLASS B CERTIFICATE
CUSIP: 958184 AB9
NUMBER R-1 Original Stated Principal Balance:
Class B Pass-Through Rate: 8.50% per annum $
-----------------------
Final Scheduled Distribution Date: September 15, 2002
Initial Class B Certificate Balance of all Class B Certificates: $2,455,000
THIS CERTIFIES THAT ------------------- is the registered owner of this
- --------- DOLLARS Class B Certificate. This Certificate evidences a fractional
undivided interest in the Western Fidelity Receivables Trust 1996-A (the
"Trust") (excluding the Residual Interest in the Trust), formed by Western
Fidelity Finance, Inc., a Delaware corporation (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of December 30,
1996 (the "Agreement") between the Depositor and Texas Commerce Bank National
Association, as trustee (the "Trustee"). The property of the Trust includes,
among other assets, a pool of motor vehicle retail installment sale contracts
secured by used automobiles, vans, minivans and light-duty trucks. (This Class B
Certificate does not represent an interest in or obligation of the Depositor or
any of the respective Affiliates thereof, except to the extent described below.)
A summary of certain of the pertinent provisions of the Agreement 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. The Stated Principal
Balance of this Class B Certificate will be decreased by the distributions on
this Class B Certificate in respect of principal as described in the Agreement.
Accordingly, following the initial issuance of the Class B Certificates, the
Stated Principal Balance of this Class B Certificate will over time be less than
the original denomination shown above. Anyone acquiring this Class B Certificate
may ascertain its Current Stated Principal Balance by inquiry of the Trustee.
This Certificate is one of the duly authorized Certificates designated as
"Pass-Through Certificates", issued in four Classes (Class A, Class B, Class C
and Class D, collectively, the "Certificates"). To the extent described in the
Agreement, the Class B, Class C and Class D Certificates are subordinate in
payment to the Class A Certificates, the Class C Certificates are subordinate in
payment to the Class A and Class B Certificates and the Class D Certificates are
subordinated in payment to the Class A, Class B and Class C Certificates. This
Class B Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class B
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The property of the Trust includes, without limitation, a pool of
motor vehicle retail installment sale contracts (the "Receivables") acquired on
the Closing Date and on Funding Dates (both as defined in the Agreement) secured
by new and used automobiles and light-duty trucks (the "Financed Vehicles"), all
moneys due thereunder after the applicable Cutoff Dates (as defined in the
Agreement), proceeds from claims on certain insurance policies and certain other
rights under the Agreement, all right, title and interest of the Depositor in
and to the Transfer and Assignment Agreement and any and all proceeds of the
foregoing.
B-3
This Class B Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder, at its
expense, upon a written request to the Trustee.
Under the Agreement, there will be distributed on the 15th day of each
month or, if such 15th day is not a Business Day, the next succeeding Business
Day (the "Distribution Date"), commencing with the Distribution Date occurring
in February 1997, to the person in whose name this Class B Certificate is
registered at the close of business on the last day of the Collection Period
preceding a Distribution Date or termination of the Trust (the "Record Date") an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, if any required to be distributed to the Holders of
all Class B Certificates.
All payments to Certificateholders shall be made on each Distribution Date
to each Certificateholder of record on the related Record Date by check, or, if
requested by a Certificateholder holding Certificates with Original Stated
Principal Balances in aggregate in excess of $1,000,000, by wire transfer to the
account designated in writing by such Holder delivered to the Trustee prior to
the Determination Date, in immediately available funds. Except as otherwise
provided in the Agreement and notwithstanding the above, the final distribution
on this Class B Certificate will be made after due notice by the Trustee of the
pendency of such distribution, which notice shall request that the
Certificateholder present and surrender this Class B Certificate at the office
or agency maintained for that purpose by the Trustee in Dallas, Texas. Surrender
of this Class B Certificate shall not be a condition of payment of the final
distribution; however, the Holder, by accepting this Class B Certificate, hereby
agrees to indemnify and hold harmless the Trustee, the Depositor and the
Certificate Registrar from and against any and all claims arising from such
failure to present and surrender this Class B Certificate, including, but not
limited to, claims by third parties claiming to be bona fide purchasers.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Trustee, by manual signature, this Class B
Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
The Class B Certificates do not represent a recourse obligation of, or an
interest in, the Depositor, the Supervisory Servicer, the Trustee or any
Affiliate of any of them. The Class B Certificates are limited in right of
payment to certain collections and recoveries respecting the Receivables, all as
more specifically set forth in the Agreement. A copy of the Agreement may be
examined during normal business hours at the principal office of the Depositor,
and at such other places, if any, designated by the Depositor, by any
Certificateholder upon request.
B-4
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement at any
time by the Depositor and the Trustee with the consent of the Holders of the
Certificates affected thereby voting as a class evidencing, in some cases, not
less than 51% of the Aggregate Current Stated Principal Balance of the
Outstanding Certificates and, in other cases, not less than 66-2/3% of the
Aggregate Current Stated Principal Balance of the Outstanding Certificates. Any
such consent by the Holder of this Class B Certificate shall be conclusive and
binding on such Holder and on all future Holders of this Class B Certificate and
of any Class B Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made upon this
Class B Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Class B Certificates.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Class B Certificate is registrable in the
Certificate Register upon surrender of this Class B Certificate for registration
of transfer at the offices or agencies maintained by the Trustee in its capacity
as Certificate Registrar, or by any successor Certificate Registrar, in Dallas,
Texas, or such other office of the Trustee maintained for such purpose and
designated by the Trustee in writing, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Class B Certificate
Registrar 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.
The Class B Certificates are initially issuable only as registered Class B
Certificates without coupons in denominations of $100,000 and integral multiples
of $5,000 in excess thereof, except that one Class B Certificate may be issued
in a different denomination. As provided in the Agreement and subject to certain
limitations set forth therein, Class B Certificates are exchangeable for new
Class B Certificates evidencing the same aggregate denomination, as requested by
the Holder surrendering the same. No service charge will be made to the Holder
for any such registration of transfer or exchange, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charges payable in
connection therewith.
The Trustee, the Certificate Registrar, and any agent of the Trustee or the
Certificate Registrar may treat the person in whose name this Class B
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Certificate Registrar, nor any such agent shall be affected by any
notice to the contrary.
The Trust created by the Agreement shall terminate upon the earliest of (i)
payment to the Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Trust Property, (ii) March 15, 2002 or (iii) subject to the Agreement, 90
days after the Dissolution of the Depositor. The Depositor may, at its option,
purchase the corpus of the Trust, in whole, at a price specified in the
Agreement, and such purchase will effect early retirement of the Certificates;
however, such right of purchase is exercisable only on a Distribution Date
following the last day of any Collection Period as of which the Receivable
Balance is less than or equal to 10% of the Original Receivable Balance.
B-5
IN WITNESS WHEREOF, the Trustee, not in its individual capacity but on
behalf of the Trust, has caused this Class B Certificate to be duly executed.
WESTERN FIDELITY RECEIVABLES TRUST
1996-A
By: TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By
----------------------------------------
Eric C. Lokker, Assistant Vice President
This is one of the Class B Certificates
referred to in the within-mentioned Agreement.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By
----------------------------------------
Eric C. Lokker, Assistant Vice President
Dated as of
- ---------------, ----
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 typewrite 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 Certificate Registrar,
with full power of substitution in the premises.
Dated:
---------------------------------------*
Name:
- ---------------
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Class B Certificate in every particular,
without alteration, enlargement or any change whatever.
B-7
EXHIBIT C
FORM OF CLASS C CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT AS DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),OR UNDER THE SECURITIES OR BLUE
SKY LAWS OF ANY STATE IN THE UNITED STATES OR ANY FOREIGN SECURITIES LAWS. BY
ITS ACCEPTANCE OF THIS CERTIFICATE THE HOLDER OF THIS CERTIFICATE IS DEEMED TO
REPRESENT TO THE DEPOSITOR AND THE TRUSTEE THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING SUCH
CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (EACH OF WHICH OTHERS IS ALSO A QUALIFIED
INSTITUTIONAL BUYER).
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE BY ANY PERSON
UNLESS EITHER (i) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO THE DEPOSITOR,
(ii) SO LONG AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO A
PERSON WHOM THE ISSUER REASONABLY BELIEVES AFTER DUE INQUIRY IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A), ACTING FOR ITS OWN ACCOUNT (AND
NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (EACH OF
WHICH OTHERS IS ALSO A QUALIFIED INSTITUTIONAL BUYER) TO WHOM NOTICE IS GIVEN
THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR
(iii) SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN WHICH CASE
(A) THE TRUSTEE SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE
PROSPECTIVE TRANSFEREE CERTIFY TO THE TRUSTEE AND THE DEPOSITOR IN WRITING THE
FACTS SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION SHALL BE IN FORM AND
SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND (B) THE TRUSTEE
SHALL REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF
THE DEPOSITOR OR THE TRUSTEE) SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE TO
THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT. NO SALE,
PLEDGE OR OTHER TRANSFER MAY BE MADE TO ANY ONE PERSON FOR CERTIFICATES WITH AN
INITIAL FACE AMOUNT OF LESS THAN $100,000 AND, IN THE CASE OF ANY PERSON ACTING
ON BEHALF OF ONE OR MORE THIRD PARTIES (OTHER THAN A BANK (AS DEFINED IN SECTION
C-1
3(a)(2) OF THE SECURITIES ACT) ACTING IN ITS FIDUCIARY CAPACITY), FOR
CERTIFICATES WITH A FACE AMOUNT OF LESS THAN $100,000 FOR EACH SUCH THIRD PARTY.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY EMPLOYEE BENEFIT
PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED ("SECTION 4975") (A "PLAN") OR A PERSON THAT IS USING THE
ASSETS OF A PLAN TO ACQUIRE THIS CERTIFICATE. ACCORDINGLY, TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR 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.
C-2
WESTERN FIDELITY RECEIVABLES TRUST 1996-A
PASS-THROUGH CERTIFICATES
CLASS C CERTIFICATE
CUSIP: 958184 AC7
NUMBER R-1 Original Stated Principal Balance:
Class C Pass-Through Rate: 12.00% $
-----------------------
Final Scheduled Distribution Date: September 15, 2002
Initial Class C Certificate Balance of all Class C Certificates: $1,227,500
THIS CERTIFIES THAT ------------------- is the registered owner of this
- --------- DOLLARS Class C Certificate. This Certificate evidences a fractional
undivided interest in the Western Fidelity Receivables Trust 1996-A (the
"Trust") (excluding the Residual Interest in the Trust), formed by Western
Fidelity Finance, Inc., a Delaware corporation (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of December 30,
1996 (the "Agreement") between the Depositor and Texas Commerce Bank National
Association, as trustee (the "Trustee"). The property of the Trust includes,
among other assets, a pool of motor vehicle retail installment sale contracts
secured by used automobiles, vans, minivans and light-duty trucks. (This Class C
Certificate does not represent an interest in or obligation of the Depositor or
any of the respective Affiliates thereof, except to the extent described below.)
A summary of certain of the pertinent provisions of the Agreement 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. The Stated Principal
Balance of this Class C Certificate will be decreased by the distributions on
this Class C Certificate in respect of principal as described in the Agreement.
Accordingly, following the initial issuance of the Class C Certificates, the
Stated Principal Balance of this Class C Certificate will over time be less than
the original denomination shown above. Anyone acquiring this Class C Certificate
may ascertain its Current Stated Principal Balance by inquiry of the Trustee.
This Certificate is one of the duly authorized Certificates designated as
"Pass-Through Certificates", issued in four Classes (Class A, Class B, Class C
and Class D, collectively, the "Certificates"). To the extent described in the
Agreement, the Class B, Class C and Class D Certificates are subordinate in
payment to the Class A Certificates, the Class C Certificates are subordinate in
payment to the Class A and Class B Certificates and the Class D Certificates are
subordinated in payment to the Class A, Class B and Class C Certificates. This
Class C Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class C
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The property of the Trust includes, without limitation, a pool of
motor vehicle retail installment sale contracts (the "Receivables") acquired on
the Closing Date and on Funding Dates (both as defined in the Agreement) secured
by new and used automobiles and light-duty trucks (the "Financed Vehicles"), all
moneys due thereunder after the applicable Cutoff Dates (as defined in the
Agreement), proceeds from claims on certain insurance policies and certain other
rights under the Agreement, all right, title and interest of the Depositor in
and to the Transfer and Assignment Agreement and any and all proceeds of the
foregoing.
C-3
This Class C Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder, at its
expense, upon a written request to the Trustee.
Under the Agreement, there will be distributed on the 15th day of each
month or, if such 15th day is not a Business Day, the next succeeding Business
Day (the "Distribution Date"), commencing with the Distribution Date occurring
in February 1997, to the person in whose name this Class C Certificate is
registered at the close of business on the last day of the Collection Period
preceding a Distribution Date or termination of the Trust (the "Record Date") an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, if any required to be distributed to the Holders of
all Class C Certificates.
All payments to Certificateholders shall be made on each Distribution Date
to each Certificateholder of record on the related Record Date by check, or, if
requested by a Certificateholder holding Certificates with Original Stated
Principal Balances in aggregate in excess of $1,000,000, by wire transfer to the
account designated in writing by such Holder delivered to the Trustee prior to
the Determination Date, in immediately available funds. Except as otherwise
provided in the Agreement and notwithstanding the above, the final distribution
on this Class C Certificate will be made after due notice by the Trustee of the
pendency of such distribution, which notice shall request that the
Certificateholder present and surrender this Class C Certificate at the office
or agency maintained for that purpose by the Trustee in Dallas, Texas. Surrender
of this Class C Certificate shall not be a condition of payment of the final
distribution; however, the Holder, by accepting this Class C Certificate, hereby
agrees to indemnify and hold harmless the Trustee, the Depositor and the
Certificate Registrar from and against any and all claims arising from such
failure to present and surrender this Class C Certificate, including, but not
limited to, claims by third parties claiming to be bona fide purchasers.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Trustee, by manual signature, this Class C
Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
The Class C Certificates do not represent a recourse obligation of, or an
interest in, the Depositor, the Supervisory Servicer, the Trustee or any
Affiliate of any of them. The Class C Certificates are limited in right of
payment to certain collections and recoveries respecting the Receivables, all as
more specifically set forth in the Agreement. A copy of the Agreement may be
examined during normal business hours at the principal office of the Depositor,
and at such other places, if any, designated by the Depositor, by any
Certificateholder upon request.
C-4
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement at any
time by the Depositor and the Trustee with the consent of the Holders of the
Certificates affected there by voting as a class evidencing, in some cases, not
less than 51% of the Aggregate Current Stated Principal Balance of the
Outstanding Certificates and, in other cases, not less than 66-2/3% of the
Aggregate Current Stated Principal Balance of the Outstanding Certificates. Any
such consent by the Holder of this Class C Certificate shall be conclusive and
binding on such Holder and on all future Holders of this Class C Certificate and
of any Class C Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made upon this
Class C Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Class C Certificates.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Class C Certificate is registrable in the
Certificate Register upon surrender of this Class C Certificate for registration
of transfer at the offices or agencies maintained by the Trustee in its capacity
as Certificate Registrar, or by any successor Certificate Registrar, in Dallas,
Texas, or such other office of the Trustee maintained for such purpose and
designated by the Trustee in writing, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Class C Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Class C Certificates of
authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee.
The Class C Certificates are initially issuable only as registered Class C
Certificates without coupons in denominations of $100,000 and integral multiples
of $5,000 in excess thereof, except that one Class C Certificate may be issued
in a different denomination. As provided in the Agreement and subject to certain
limitations set forth therein, Class C Certificates are exchangeable for new
Class C Certificates evidencing the same aggregate denomination, as requested by
the Holder surrendering the same. No service charge will be made to the Holder
for any such registration of transfer or exchange, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charges payable in
connection therewith.
The Trustee, the Certificate Registrar, and any agent of the Trustee or the
Certificate Registrar may treat the person in whose name this Class C
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Certificate Registrar, nor any such agent shall be affected by any
notice to the contrary.
The Trust created by the Agreement shall terminate upon the earliest of (i)
payment to the Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Trust Property, (ii) March 15, 2002 or (iii) subject to the Agreement, 90
days after the Dissolution of the Depositor. The Depositor may, at its option,
purchase the corpus of the Trust, in whole, at a price specified in the
Agreement, and such purchase will effect early retirement of the Certificates;
however, such right of purchase is exercisable only on a Distribution Date
following the last day of any Collection Period as of which the Receivable
Balance is less than or equal to 10% of the Original Receivable Balance.
C-5
2
IN WITNESS WHEREOF, the Trustee, not in its individual capacity but on
behalf of the Trust, has caused this Class C Certificate to be duly executed.
WESTERN FIDELITY RECEIVABLES TRUST
1996-A
By: TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By
----------------------------------------
Eric C. Lokker, Assistant Vice President
This is one of the Class C Certificates
referred to in the within-mentioned Agreement.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By
----------------------------------------
Eric C. Lokker, Assistant Vice President
Dated as of
- ---------------, ----
C-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 typewrite name and address, including postal zip code, of
assignee)
- --------------------------------------------------------------------------------
the within Class C Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- --------------------------------------------------------------------------------
to transfer said Class C Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
---------------------------------------*
Name:
- ---------------
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Class C Certificate in every particular,
without alteration, enlargement or any change whatever.
C-7
EXHIBIT D
FORM OF CLASS D CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT AS DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),OR UNDER THE SECURITIES OR BLUE
SKY LAWS OF ANY STATE IN THE UNITED STATES OR ANY FOREIGN SECURITIES LAWS. BY
ITS ACCEPTANCE OF THIS CERTIFICATE THE HOLDER OF THIS CERTIFICATE IS DEEMED TO
REPRESENT TO THE DEPOSITOR AND THE TRUSTEE THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING SUCH
CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (EACH OF WHICH OTHERS IS ALSO A QUALIFIED
INSTITUTIONAL BUYER).
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE BY ANY PERSON
UNLESS EITHER (i) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO THE DEPOSITOR,
(ii) SO LONG AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO A
PERSON WHOM THE ISSUER REASONABLY BELIEVES AFTER DUE INQUIRY IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A), ACTING FOR ITS OWN ACCOUNT (AND
NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (EACH OF
WHICH OTHERS IS ALSO A QUALIFIED INSTITUTIONAL BUYER) TO WHOM NOTICE IS GIVEN
THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR
(iii) SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN WHICH CASE
(A) THE TRUSTEE SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE
PROSPECTIVE TRANSFEREE CERTIFY TO THE TRUSTEE AND THE DEPOSITOR IN WRITING THE
FACTS SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION SHALL BE IN FORM AND
SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND (B) THE TRUSTEE
SHALL REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF
THE DEPOSITOR OR THE TRUSTEE) SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE TO
THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT. NO SALE,
PLEDGE OR OTHER TRANSFER MAY BE MADE TO ANY ONE PERSON FOR CERTIFICATES WITH AN
INITIAL FACE AMOUNT OF LESS THAN $100,000 AND, IN THE CASE OF ANY PERSON ACTING
ON BEHALF OF ONE OR MORE THIRD PARTIES (OTHER THAN A BANK (AS DEFINED IN SECTION
3(a)(2) OF THE SECURITIES ACT)
D-1
3(a)(2) OF THE SECURITIES ACT) ACTING IN ITS FIDUCIARY CAPACITY), FOR
CERTIFICATES WITH A FACE AMOUNT OF LESS THAN $100,000 FOR EACH SUCH THIRD PARTY.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY EMPLOYEE BENEFIT
PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED ("SECTION 4975") (A "PLAN") OR A PERSON THAT IS USING THE
ASSETS OF A PLAN TO ACQUIRE THIS CERTIFICATE. ACCORDINGLY, TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR 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.
D-2
WESTERN FIDELITY RECEIVABLES TRUST 1996-A
PASS-THROUGH CERTIFICATES
CLASS D CERTIFICATE
CUSIP: 958184 AD5
NUMBER R-1 Original Stated Principal Balance:
Class D Pass-Through Rate: 15.00% per annum $
-----------------------
Final Scheduled Distribution Date: September 15, 2002
Initial Class D Certificate Balance of all Class D Certificates: $1,227,500
THIS CERTIFIES THAT ------------------- is the registered owner of this
- --------- DOLLARS Class D Certificate. This Certificate evidences a fractional
undivided interest in the Western Fidelity Receivables Trust 1996-A (the
"Trust") (excluding the Residual Interest in the Trust), formed by Western
Fidelity Finance, Inc., a Delaware corporation (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of December 30,
1996 (the "Agreement") between the Depositor and Texas Commerce Bank National
Association, as trustee (the "Trustee"). The property of the Trust includes,
among other assets, a pool of motor vehicle retail installment sale contracts
secured by used automobiles, vans, minivans and light-duty trucks. (This Class D
Certificate does not represent an interest in or obligation of the Depositor or
any of the respective Affiliates thereof, except to the extent described below.)
A summary of certain of the pertinent provisions of the Agreement 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. The Stated Principal
Balance of this Class D Certificate will be decreased by the distributions on
this Class D Certificate in respect of principal as described in the Agreement.
Accordingly, following the initial issuance of the Class D Certificates, the
Stated Principal Balance of this Class D Certificate will over time be less than
the original denomination shown above. Anyone acquiring this Class D Certificate
may ascertain its Current Stated Principal Balance by inquiry of the Trustee.
This Certificate is one of the duly authorized Certificates designated as
"Pass-Through Certificates", issued in four Classes (Class A, Class B, Class C
and Class D, collectively, the "Certificates"). To the extent described in the
Agreement, the Class B, Class C and Class D Certificates are subordinate in
payment to the Class A Certificates, the Class C Certificates are subordinate in
payment to the Class A and Class B Certificates and the Class D Certificates are
subordinated in payment to the Class A, Class B and Class C Certificates. This
Class D Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class D
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The property of the Trust includes, without limitation, a pool of
motor vehicle retail installment sale contracts (the "Receivables") acquired on
the Closing Date and on Funding Dates (both as defined in the Agreement) secured
by new and used automobiles and light-duty trucks (the "Financed Vehicles"), all
moneys due thereunder after the applicable Cutoff Dates (as defined in the
Agreement), proceeds from claims on certain insurance policies and certain other
rights under the Agreement, all right, title and interest of the Depositor in
and to the Transfer and Assignment Agreement and any and all proceeds of the
foregoing.
D-3
3
This Class D Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder, at its
expense, upon a written request to the Trustee.
Under the Agreement, there will be distributed on the 15th day of each
month or, if such 15th day is not a Business Day, the next succeeding Business
Day (the "Distribution Date"), commencing with the Distribution Date occurring
in February 1997, to the person in whose name this Class D Certificate is
registered at the close of business on the last day of the Collection Period
preceding a Distribution Date or termination of the Trust (the "Record Date") an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, if any required to be distributed to the holders of
all Class D Certificates.
All payments to Certificateholders shall be made on each Distribution Date
to each Certificateholder of record on the related Record Date by check, or, if
requested by a Certificateholder holding Certificates with Original Stated
Principal Balances in aggregate in excess of $1,000,000, by wire transfer to the
account designated in writing by such Holder delivered to the Trustee prior to
the Determination Date, in immediately available funds. Except as otherwise
provided in the Agreement and notwithstanding the above, the final distribution
on this Class D Certificate will be made after due notice by the Trustee of the
pendency of such distribution, which notice shall request that the
Certificateholder present and surrender this Class D Certificate at the office
or agency maintained for that purpose by the Trustee in Dallas, Texas. Surrender
of this Class D Certificate shall not be a condition of payment of the final
distribution; however, the Holder, by accepting this Class D Certificate, hereby
agrees to indemnify and hold harmless the Trustee, the Depositor and the
Certificate Registrar from and against any and all claims arising from such
failure to present and surrender this Class D Certificate, including, but not
limited to, claims by third parties claiming to be bona fide purchasers.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Trustee, by manual signature, this Class D
Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
The Class D Certificates do not represent a recourse obligation of, or an
interest in, the Depositor, the Supervisory Servicer, the Trustee or any
Affiliate of any of them. The Class D Certificates are limited in right of
payment to certain collections and recoveries respecting the Receivables, all as
more specifically set forth in the Agreement. A copy of the Agreement may be
examined during normal business hours at the principal office of the Depositor,
and at such other places, if any, designated by the Depositor, by any
Certificateholder upon request.
D-4
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement at any
time by the Depositor and the Trustee with the consent of the Holders of the
Certificates affected there by voting as a class evidencing, in some cases, not
less than 51% of the Aggregate Current Stated Principal Balance of the
Outstanding Certificates and, in other cases, not less than 66-2/3% of the
Aggregate Current Stated Principal Balance of the Outstanding Certificates. Any
such consent by the Holder of this Class D Certificate shall be conclusive and
binding on such Holder and on all future Holders of this Class D Certificate and
of any Class D Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made upon this
Class D Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Class D Certificates.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Class D Certificate is registrable in the
Certificate Register upon surrender of this Class D Certificate for registration
of transfer at the offices or agencies maintained by the Trustee in its capacity
as Certificate Registrar, or by any successor Certificate Registrar, in Dallas,
Texas, or such other office of the Trustee maintained for such purpose and
designated by the Trustee in writing, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Class D Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Class D Certificates of
authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee.
The Class D Certificates are initially issuable only as registered Class D
Certificates without coupons in denominations of $100,000 and integral multiples
of $5,000 in excess thereof, except that one Class D Certificate may be issued
in a different denomination. As provided in the Agreement and subject to certain
limitations set forth therein, Class D Certificates are exchangeable for new
Class D Certificates evidencing the same aggregate denomination, as requested by
the Holder surrendering the same. No service charge will be made to the Holder
for any such registration of transfer or exchange, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charges payable in
connection therewith.
The Trustee, the Certificate Registrar, and any agent of the Trustee or the
Certificate Registrar may treat the person in whose name this Class D
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Certificate Registrar, nor any such agent shall be affected by any
notice to the contrary.
The Trust created by the Agreement shall terminate upon the earliest of (i)
payment to the Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Trust Property, (ii) March 15, 2002 or (iii) subject to the Agreement, 90
days after the Dissolution of the Depositor. The Depositor may, at its option,
purchase the corpus of the Trust, in whole, at a price specified in the
Agreement, and such purchase will effect early retirement of the Certificates;
however, such right of purchase is exercisable only on a Distribution Date
following the last day of any Collection Period as of which the Receivable
Balance is less than or equal to 10% of the Original Receivable Balance.
D-5
4
IN WITNESS WHEREOF, the Trustee, not in its individual capacity but on
behalf of the Trust, has caused this Class D Certificate to be duly executed.
WESTERN FIDELITY RECEIVABLES TRUST
1996-A
By: TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By
----------------------------------------
Eric C. Lokker, Assistant Vice President
This is one of the Class D Certificates
referred to in the within-mentioned Agreement.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By
----------------------------------------
Eric C. Lokker, Assistant Vice President
Dated as of
- ---------------, ----
D-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 typewrite name and address, including postal zip code, of
assignee)
- --------------------------------------------------------------------------------
the within Class D Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- --------------------------------------------------------------------------------
to transfer said Class D Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
---------------------------------------*
Name:
- ---------------
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Class D Certificate in every particular,
without alteration, enlargement or any change whatever.
D-7
EXHIBIT E
FORM OF TRANSFEREE AGREEMENT
(Date)
Texas Commerce Bank National Association
600 Travis Street, 8th Floor
Houston, Texas 77002
Attention: Global Trust Services/Western Fidelity 1996-A
Dear Sirs:
The undersigned (the "Purchaser") proposes to purchase Class [A] [B] [C]
[D] Certificates (the "Purchaser's Certificates") representing $ aggregate
principal amount of the Pass-Through Certificates, Series 1996-A (Western
Fidelity Automobile Receivables Program) in the original aggregate principal
amount of $_______________ (the "Certificates") of Western Fidelity Finance,
Inc., a Delaware corporation (the "Depositor"). The Certificates were issued
pursuant to a Pooling and Servicing Agreement dated as of December 30, 1996
between the Depositor and Texas Commerce Bank National Association, as trustee
(the "Trustee") (the "Agreement"). Capitalized terms used herein but not
otherwise defined shall have the same meaning as in the Agreement.
In connection with the purchase, the Purchaser agrees to the following
terms and conditions and makes the representations and warranties stated herein
with the express understanding that they will be relied upon by the seller of
the Purchaser's Certificates, the Depositor and the Trustee.
1. The Purchaser is purchasing the Purchaser's Certificates solely for the
Purchaser's own account and the account of its affiliated entities and with no
present intention of distributing the Certificates or any portion thereof,
subject, nevertheless, to the understanding that the disposition of the
Purchaser's property shall at all times be and remain within its control.
2. The Purchaser is a qualified institutional buyer as follows (please
check one):
- ----- (i) Any of the following entities, acting for its own account or the
accounts of other qualified institutional buyers, that in the aggregate
owns and invests on a discretionary basis at least $100 million in
securities of issuers that are not affiliated with the entity (please check
one):
----- (A) Any insurance company as defined in section 2(13) of the
Securities Act of 1933, as amended (the "Act");
E-1
----- (B) Any investment company registered under the Investment
Company Act of 1940 (the "Investment Company Act") or any business
development company as defined in section 2(a)(48) of that Act;
----- (C) Any Small Business Investment Company licensed by the U.S.
Small Business Administration under section 301(c) or (d) of the Small
Business Investment Act of 1958;
----- (D) Any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees;
----- (E) Any employee benefit plan within the meaning of Title I of
the Employee Retirement Income Security Act of 1974;
----- (F) Any trust fund whose trustee is a bank or trust company and
whose participants are exclusively plans of the types identified in
paragraph (2)(i)(D) or (E) of this paragraph 2, except trust funds
that include as participants individual retirement accounts or H.R. 10
plans;
----- (G) Any business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940;
----- (H) Any organization described in section 501(c)(3) of the
Internal Revenue Code, corporation (other than a bank as defined in
section 3(a)(2) of the Act or a savings and loan association or other
institution referenced in section 3(a)(5)(A) of the Act or a foreign
bank or savings and loan association or equivalent institution),
partnership, or Massachusetts or similar business trust; or
----- (I) any investment adviser registered under the Investment
Advisers Act;
- ------ (ii) Any dealer registered pursuant to Section 15 of the Exchange Act
acting in a riskless principal transaction on behalf of a qualified
institutional buyer;
- ------ (iii) Any dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), acting for its own
account or the accounts of other qualified institutional buyers, that in
the aggregate owns and invests on a discretionary basis at least $10
million of securities of issuers that are not affiliated with the dealer;
provided, that securities constituting the whole or a part of an unsold
allotment to or subscription by a dealer as a participant in a public
offering shall not be deemed to be owned by such dealer;
E-2
- ----- (iv) Any investment company registered under the Investment Company
Act, acting for its own account or for the accounts of other qualified
institutional buyers, that is part of a family of investment companies
which own in the aggregate at least $100 million in securities of issuers,
other than issuers that are affiliated with the investment company or are
part of such family of investment companies. "Family of investment
companies" means any two or more investment companies registered under the
Investment Company Act, except for a unit investment trust whose assets
consist solely of shares of one or more registered investment companies,
that have the same investment adviser (or, in the case of unit investment
trusts, the same depositor), provided that, for the purposes of this
section:
(A) Each series of a series company (as defined in Rule 18f-2
under the Investment Company Act) shall be deemed to be a separate
investment company; and
(B) Investment companies shall be deemed to have the same adviser
(or depositor) if their advisers (or depositors) are majority-owned
subsidiaries of the same parent, or if one investment company's
adviser (or depositor) is a majority-owned subsidiary of the other
investment company's adviser (or depositor);
- ----- (v) Any entity, all of the equity owners of which are qualified
institutional buyers, acting for its own account or the accounts of other
qualified institutional buyers; and
(vi) Any bank as defined in section 3(a)(2) of the Securities Act, any
savings and loan association or other institution as referenced in section
3(a)(5)(A) of the Act, or any foreign bank or savings and loan association
or equivalent institution, acting for its own account or the accounts of
other qualified institutional buyers, that in the aggregate owns and
invests on a discretionary basis at least $100 million in securities of
issuers that are not affiliated with it and that has an audited net worth
of at least $25 million as demonstrated in its latest annual financial
statements, as of a date not more than 16 months preceding the date of sale
under the Rule in the case of a U.S. bank or savings and loan association,
and not more than 18 months preceding such date of sale for a foreign bank
or savings and loan association or equivalent institution.
3. The Purchaser understands that the Depositor, any person acting on its
behalf and the seller of the Purchaser's Certificates shall be entitled to rely
upon certain non-exclusive methods of establishing the Purchaser's ownership and
discretionary investments of securities as stated in Rule 144A promulgated under
the Securities Act of 1933, as amended ("Rule 144A").
4. The Purchaser represents that, if it has so requested, it has received
the following reasonably current information: a brief statement of the nature of
the business of the Depositor and the products and services it offers; the
Depositor's most recent balance sheet and profit and loss and retained earnings
statements, and similar financial statements for such part of the two preceding
fiscal years as the Depositor has been in operation; and Servicer statements of
payments on the Certificates on each Distribution Date or for a shorter period
as may be requested by the Purchaser.
E-3
5. The Purchaser understands that the Purchaser's Certificates have not
being registered under the Act or any state securities or "Blue Sky" laws and
are being sold in reliance on exemptions from the registration requirements of
the Act and any such laws for nonpublic offerings. The Purchaser understands
that the exemptions from the registration requirements under state securities
laws upon which the Depositor is relying require that the Purchaser be one of
the types of investors specified in paragraph 2 above under the applicable state
securities law and the Purchaser is such an investor. The Purchaser further
understands that the Purchaser's Certificates must be held indefinitely unless
subsequently registered under the Act, any applicable state securities or "Blue
Sky" laws or unless exemptions from the registration requirements of the
Securities Act (particularly, Rule 144A) and such laws are available. If at some
future time the Purchaser wishes to dispose of or exchange any of the
Purchaser's Certificates, the Purchaser will not do so unless before any such
sale, transfer or other disposition the Purchaser has furnished to the Depositor
and the Trustee an express agreement substantially in the form of this
Transferee's Agreement by the proposed transferee to be bound by and to abide by
the provisions of the Agreement, the restrictions noted on the face of the
Purchaser's Certificates and the Transferee's Agreement.
6. The Purchaser understands that transfer of the Certificates will be
restricted.
7. The Purchaser understands that there may be restrictions on the ability
of certain investors, including, without limitation, depository institutions,
either to purchase the Purchaser's Certificates or to purchase investments
having characteristics similar to those of the Purchaser's Certificates
representing more than a specified percentage of the investor's assets. The
Purchaser has consulted, and relied on the advice of, the Purchaser's own legal
advisor in determining whether and to what extent the Purchaser's Certificates
constitute a legal investment for the Purchaser.
8. The Purchaser recognizes that an investment in the Purchaser's
Certificates involves significant risks.
9. The Purchaser understands that there is no established market for the
Purchaser's Certificates and that none will develop and, accordingly, that the
Purchaser must bear the economic risk of an investment in the Purchaser's
Certificates for an indefinite period of time unless the Certificates are sold
to a qualified institutional buyer of the type specified in Paragraph 2 above.
E-4
10. The Purchaser agrees that the Purchaser is bound by and will abide by
the provisions of the Agreement, the restrictions on the Purchaser's
Certificates described in the Agreement and this Transferee's Agreement.
Very truly yours,
------------------------------------------
By----------------------------------------
Name:-------------------------------------
Title: -----------------------------------
E-5
EXHIBIT F
NOTICE OF FUNDING
In accordance with the Pooling and Servicing Agreement dated as of December
30, 1996 by and between Western Fidelity Finance, Inc., as depositor, and Texas
Commerce Bank National Association, as trustee (the "Agreement"), the
undersigned hereby gives notice of a Funding Date to occur on or before
- ------------, 1997 for each of the Subsequent Receivables listed on the Schedule
of Receivables accompanying this Notice of Funding. Unless otherwise defined
herein, capitalized terms have the meanings set forth in the Agreement.
Such Subsequent Receivables represent the following amounts:
Aggregate Receivable Balance of Receivables
as of the Cutoff Date: $
------------------
Amount to be wired to the Seller
in payment for such Subsequent Receivables: $
------------------
The undersigned hereby certifies that, in connection with the Funding Date
specified above, the undersigned has complied with all terms and provisions
specified in Section 2.16 of the Agreement, including, but not limited to,
delivery of the Officer's Certificate, as specified therein.
Date: , 1997 WESTERN FIDELITY FINANCE, INC.
----------------
By ---------------------------
Name:-------------------------
Title:------------------------
F-1
EXHIBIT G
OFFICER'S CERTIFICATE
re: Funding Date
WESTERN FIDELITY FINANCE, INC.
To: Texas Commerce Bank National Association
600 Travis Street, 8th Floor
Houston, Texas 77002
Fax: (713) 216-7757
This Officer's Certificate is being issued in accordance with Section
2.16 of the Pooling and Servicing Agreement dated as of December 30, 1996 (the
"Agreement") by and between Western Fidelity Finance, Inc., as issuer (the
"Depositor") and Texas Commerce Bank National Association, as Trustee. Terms not
otherwise defined herein shall have the meanings ascribed thereto in the
Agreement.
By his or her signature below, the undersigned officer of the
Depositor, on behalf of the Depositor, certifies that:
(a) The matters set forth in Section 3.02(b) of the Transfer and
Assignment Agreement by and between the Seller, as the assignor named
therein, and the Depositor, as assignee, are true and correct. All
Receivables to be acquired on the Funding Date to occur on or before
________, 1997 constitute Eligible Receivables as said term is defined
in the Transfer and Assignment Agreement; and
(b) the representations and warranties set forth in Section 3.12
of the Agreement are true and correct as of the date hereof; and
(c) the documents listed in Section 2.16(b)(i)(A) through (E)
hereof are being delivered to the Trustee in its capacity as Custodian
on or before the Funding Date specified herein; and
G-1
(d) the requirements stated in Section 2.16 regarding the
Subsequent Receivables to be acquired on the Funding Date have been
met.
Date: , 1997 WESTERN FIDELITY FINANCE, INC.
----------------
By ---------------------------
Name:-------------------------
Title:------------------------
G-2
EXHIBIT H-1
WESTERN FIDELITY RECEIVABLES TRUST 1996-A
PASS-THROUGH CERTIFICATES
RECEIVABLE CHARACTERISTICS
As of December 30, 1996 (Closing Date)
- --------------------------------------------------------------------------------
Pass-Through Rate
- -----------------
17.001% - 18.000% $
18.001% - 19.000%
19.001% - 20.000%
20.001% - 21.000%
21.001% - 22.000%
22.001% - 23.000%
23.001% - 24.000%
24.001% - 25.000%
25.001% - 26.000%
26.001% - 27.000%
27.001% - 28.000%
28.001% - 29.000%
29.001% - 30.000%
30.001% - 40.000%
Total $
========
Weighted Average Annual Percentage Rate %
-----
Months Remaining
- ----------------
0-12 $
13-18
19-24
25-30
31-36
37-42
43-48
49-54
55-60
-------
Total $
=======
Weighted Average Remaining Term to Maturity months
-----
H-1-1
EXHIBIT H-2
WESTERN FIDELITY RECEIVABLES TRUST 1996-A
PASS-THROUGH CERTIFICATES
RECEIVABLES CHARACTERISTICS
As of ________, 1997 (Funding Date)
- --------------------------------------------------------------------------------
Cumulative Totals From
Receivables Acquired Closing Date Through
Pass-Through Rate On Funding Date Above Funding Date
- ----------------- -------------------- ----------------------
17.90% - 17.99% $ $
18.00% - 18.99%
19.00% - 19.99%
20.00% - 20.99%
21.00% - 21.99%
22.00% - 22.99%
23.00% - 23.99%
24.00% - 24.99%
25.00% - 25.99%
26.00% - 26.99%
27.00% - 27.99%
28.00% - 28.99%
29.00% - 29.99%
30.00% - 30.99%
Total $ $
------------------- ---------------------
Weighted Average Annual Percentage Rate % %
--------- --------
Months Remaining
- ----------------
0-12 $ $
13-18
19-24
25-30
31-36
37-42
43-48
49-54
55-60
Total $ $
------------------- --------------------
Weighted Average Remaining Term to Maturity
-------- -------------
H-2-1
EXHIBIT I
FORM OF ASSIGNMENT
In accordance with the Pooling and Servicing Agreement dated as of December
30, 1996 by and between Western Fidelity Finance, Inc., a Delaware corporation
(the "Depositor"), and Texas Commerce Bank National Association, as trustee (the
"Trustee") (the "Pooling and Servicing Agreement"), the Depositor hereby
assigns, transfers and otherwise conveys unto the Trustee, in trust for the
benefit of the Certificateholders, without recourse (capitalized terms used
herein and not otherwise defined shall have the meaning assigned to them in the
Pooling and Servicing Agreement): (i) all right, title and interest of the
Depositor in and to the [Initial] [Subsequent] Receivables identified on the
Schedule of Receivables attached hereto (the "Receivables"), and all moneys
received thereon, on and after the Cutoff Date allocable to principal, and all
monies received thereon allocable to interest accrued from and including the
Cutoff Date (except for interest accrued and actually received from the Cutoff
Date through the [Closing Date] [Funding Date] which will be withdrawn from the
Revenue Fund, to the extent contained therein, and paid to the Seller); (ii) the
interest of the Depositor in the security interests in the Financed Vehicles
granted by the Obligors pursuant to the [Initial] [Subsequent] Receivables and
all certificates of title to such Financed Vehicles; (iii) the interest of the
Depositor in any proceeds from claims on Insurance Policies covering the
[Initial] [Subsequent] Receivables, the Financed Vehicles or Obligors from the
Cutoff Date; (iv) the right of the Depositor to realize upon any property
(including the right to receive future Liquidation Proceeds) that shall have
secured an [Initial] [Subsequent] Receivable and have been repossessed by or on
behalf of the Trustee; (v) the interest of the Depositor in any Dealer recourse;
(vi) all right, title and interest in the Depositor in and to the Transfer and
Assignment Agreement; (vii) all right, title and interest of the Depositor in
and to the Pre-Funding Account and the Capitalized Interest Account and any
monies and investments on deposit therein and (viii) the proceeds of any and all
of the foregoing. The foregoing sale does not constitute and is not intended to
result in any assumption by the Trustee of any obligation of the undersigned to
the Obligors, insurers or any other person in connection with the Receivables,
Custodian Files, Servicer Files, any insurance policies or any agreement or
instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements contained in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of ------, 199-.
WESTERN FIDELITY FINANCE, INC.
a Delaware corporation
By
----------------------------
Gene E. Osborn, President
I-1