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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
May 22, 1997
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NATIONSCREDIT GRANTOR TRUST 1997 - 1
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(Exact name of registrant as specified in charter)
Delaware 33-80837 75-2655744
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(State or other (Commission File (IRS Employer Identification
jurisdiction of Number) Number)
incorporation)
225 E. John Carpenter Freeway, Irving, Texas 75062-2731
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972) 506-5026
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Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
This Current Report on Form 8-K is being filed to report the issuance
by NationsCredit Grantor Trust 1997-1 (the "Trust") of $181,781,125.63 in
aggregate principal amount of its 6.75% Marine Receivable-Backed Certificates
(the "Certificates") on May 22, 1997. Bankers Trust Company, a New York banking
corporation, is acting as Trustee and Collateral Agent (the "Trustee") with
respect to the Certificates pursuant to a Pooling and Servicing Agreement (with
Standard Terms and Conditions attached thereto), dated as of April 30, 1997 (the
"Pooling and Servicing Agreement"), among NationsCredit Securitization
Corporation, as depositor (the "Depositor"), NationsCredit Commercial
Corporation of America, as servicer (the "Servicer") and the Trustee.
Capitalized terms used herein, but not otherwise defined herein, shall have the
meaning assigned to such terms in the Pooling and Servicing Agreement. Pursuant
to an Underwriting Agreement dated May 15, 1997 (the "Underwriting Agreement")
by and between the Depositor and NationsBanc Capital Markets, Inc., as
representative of the underwriters named therein (the "Underwriter"), the
Underwriter purchased the Certificates from the Depositor.
This Current Report on Form 8-K is being filed to file a copy of the
Pooling and Servicing Agreement, the Underwriting Agreement, the Purchase
Agreement and the Assignment Agreement.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit No.
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1.1 Underwriting Agreement
4.1 Pooling and Servicing Agreement
4.2 Purchase Agreement
4.3 Assignment Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NATIONSCREDIT GRANTOR TRUST 1997 - 1
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(Registrant)
By: NationsCredit Commercial
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Corporation of America, as Servicer
of NationsCredit Grantor Trust
1997-1
Date: June 4, 1997 By: /s/ Lawrence Angelilli
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Name: Lawrence Angelilli
Title: Vice President
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EXHIBIT INDEX
Exhibit Number Description
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1.1 Underwriting Agreement
4.1 Pooling and Servicing Agreement
4.2 Purchase Agreement
4.3 Assignment Agreement
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EXHIBIT 1.1
NATIONSCREDIT SECURITIZATION CORPORATION
DEPOSITOR
NATIONSCREDIT GRANTOR TRUST 1997-1
UNDERWRITING AGREEMENT
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New York, New York
May 15, 1997
NationsBanc Capital Markets, Inc.,
as Representative of the several underwriters
NationsBank Corporate Center
100 North Tryon Street, NC1-007-10-07
Charlotte, North Carolina 28255
Ladies and Gentlemen:
NationsCredit Securitization Corporation, a Delaware corporation (the
"Company"), proposes to form a trust entitled the NationsCredit Grantor Trust
1997-1 (the "Trust") pursuant to the terms of a proposed Pooling and Servicing
Agreement, including the Standard Terms and Conditions of Agreement, to be dated
as of April 30, 1997, among the Company, as Depositor, NationsCredit Commercial
Corporation of America, as Servicer (the "Servicer" or "NationsCredit
Commercial"), and Bankers Trust Company, as Trustee and Collateral Agent (the
"Pooling and Servicing Agreement"), pursuant to which certain 6.75% Marine
Receivable-Backed Certificates (the "Certificates") will be issued. Each
Certificate will evidence a fractional, undivided percentage interest in the
Trust. The property of the Trust includes a pool of marine retail installment
sale contracts secured by new and used boats, boat motors and boat trailers (the
"Receivables"), certain monies received under the Simple Interest Receivables
and certain monies due under the Precomputed Receivables, in each case, on or
after April 30, 1997, security interests in the boats and marine equipment
financed thereby, an irrevocable surety bond, guaranteeing payments of interest
and principal on the Certificates (the "Surety Bond"), issued by Capital Markets
Assurance Corporation (the "Surety Bond Issuer"), such amounts as from time to
time may be held in one or more trust accounts which will be established and
maintained by the Servicer pursuant to the Pooling and Servicing Agreement, the
rights of the
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Company under that certain Purchase Agreement, dated as of April 30, 1997,
between the Company and NationsCredit Commercial, the rights of NationsCredit
Marine Funding Corporation ("NCMF") to cause NationsCredit Commercial to
repurchase the NCMF Receivables upon the breach of certain representations and
warranties, the proceeds from any recourse rights of NCMF or the Company against
any seller of new and used boats, boat motors and boat trailers financed by the
Receivables pursuant to any agreement with a Dealer, the right to proceeds from
claims on physical damage, credit life and disability insurance policies
relating to the Receivables, and any property that shall have secured a
Receivable and that shall have been acquired by the Trustee. To the extent not
defined herein, capitalized terms used herein shall have the meanings specified
in the Pooling and Servicing Agreement.
The Company proposes to sell to the underwriters identified on Schedule
I hereto (the "Underwriters") for whom you are acting as representative (the
"Representative") the principal amount of the Certificates identified in
Schedule I hereto.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each Underwriter that:
(a) The Certificates are eligible for registration on Form S-3
under the Securities Act of 1933, as amended (the "Act"), and the
Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on such form, registration
number 333-22327, under the Act, which has become effective, for the
registration under the Act of the Certificates. The Company proposes to
file with the Commission pursuant to Rule 424 under the Act a final
prospectus relating to the Certificates and the plan of distribution
thereof and has previously advised the Representative of all further
information (financial and other) with respect to the Company to be set
forth therein. Such registration statement, including the exhibits
thereto, as amended to the date of this agreement, is hereinafter
called the "Registration Statement"; such prospectus in the form in
which it appears in the Registration Statement is hereinafter called
the "Preliminary Prospectus"; and such final form of prospectus, in the
form in which it shall be filed with the Commission pursuant to Rule
424 under the Act, is hereinafter called the "Final Prospectus."
(b) As of the date hereof, when the Final Prospectus is first
filed pursuant to Rule 424 under the Act, when, prior to the Closing
Date (as hereinafter defined in Section 3), any amendment to the
Registration Statement becomes effective (including the filing of any
document incorporated by reference in the Registration Statement), when
any supplement to the Final Prospectus is filed with the Commission and
at the Closing Date, (i) the Registration Statement, as amended as of
any such time, and the Final Prospectus, as amended or supplemented as
of any such time, will comply in all material respects with the
applicable requirements of the Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the respective rules
thereunder, (ii) the Registration Statement, as amended as of any such
time, will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading, and (iii) the
Final Prospectus as
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amended or supplemented as of any such time, will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Final Prospectus or any
amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any information furnished in writing to the Company by or
on behalf of any Underwriter through the Representative specifically
for use in connection with the preparation of the Registration
Statement and the Final Prospectus.
(c) The Company has been duly incorporated and is validly existing
as a corporation under the laws of the State of Delaware and has
corporate and other power and authority to own its properties and
conduct is business, as now conducted by it, and to enter into and
perform its obligations under this Agreement and each of the Purchase
Agreement, the Reimbursement Agreement and the Pooling and Servicing
Agreement.
(d) The Company is not aware of (i) any request by the Commission
for any further amendment of the Registration Statement or for any
additional information or (ii) the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement.
(e) (i) This Agreement and each of the Purchase Agreement, the
Reimbursement Agreement and the Pooling and Servicing Agreement have
been duly authorized by the Company, and this Agreement and each of the
Purchase Agreement, the Reimbursement Agreement and the Pooling and
Servicing Agreement have been duly executed and delivered by the
Company, and each of this Agreement, the Purchase Agreement, the
Reimbursement Agreement and the Pooling and Servicing Agreement, when
executed and delivered by the Company, does or will, as the case may
be, constitute a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject,
as to the enforcement of remedies, to applicable bankruptcy,
insolvency, reorganization, moratorium, receivership and similar laws
affecting creditors' rights generally and to general principles of
equity (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law); and (ii) the
Certificates have been duly authorized by the Company, and when duly
executed by the Trustee on behalf of the Trust, authenticated by the
Trustee and delivered in accordance with the Pooling and Servicing
Agreement and delivered and paid for as provided herein, will be
validly issued and outstanding and entitled to the benefits and
security afforded by the Pooling and Servicing Agreement.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties set forth herein, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, the principal amount of the
Certificates set forth opposite such Underwriter's name in Schedule I hereto at
the purchase price of 99.70% of the principal amount of such Certificates, plus,
in each
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case, interest calculated from and including May 15, 1997 through and including
the date prior to the Closing Date.
3. Delivery and Payment. Delivery of and payment for the Certificates
shall be made at the offices of Stroock & Stroock & Lavan LLP, 180 Maiden Lane,
New York, New York 10038, at 10:00 a.m. New York time on May 22, 1997 or such
other place as shall be agreed by the Company and the Underwriters, and which
date and time may be postponed by agreement between the Representative and the
Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Certificates being herein called the "Closing Date"). Delivery
of the Certificates shall be made to the Representative for the respective
accounts of the several Underwriters against payment by the several Underwriters
through the Representative of the purchase price thereof by one or more wires of
immediately available funds to an account designated by the Company. Delivery of
the Certificates shall be made through the facilities of The Depository Trust
Company.
4. Representations, Warranties and Covenants of the Underwriters. The
Underwriters agree with the Company that:
(a) Each Underwriter represents and warrants to the Company that
it will not, in connection with the offering and sale of the
Certificates, use (i) any "Computational Materials" within the meaning
of the no-action letter, dated May 20, 1994, issued by the Division of
Corporation Finance of the Commission to Kidder, Peabody Acceptance
Corporation I, Kidder, Peabody & Co. Incorporated, and Kidder
Structured Asset Corporation and the no-action letter, dated May 27,
1994, issued by the Division of Corporation Finance of the Commission
to the Public Securities Association or (ii) any "ABS Term Sheets"
within the meaning of the no-action letter, dated February 17, 1995,
issued by the Division of Corporation Finance of the Commission to the
Public Securities Association; and
(b) None of the Underwriters will institute against, or join any
other Person in instituting against, the Company any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or
other proceeding under any federal or state bankruptcy or similar law,
until August 16, 2014.
5. Agreements. The Company agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Certificates,
the Company will not file any amendment to the Registration
Statement or supplement to the Final Prospectus unless the Company has
furnished the Representative a copy of such amendment or supplement
for their review prior to filing and will not file any such proposed
amendment or supplement to which the Representative reasonably
objects. Subject to the foregoing sentence, the Company will cause the
Final Prospectus to be filed with the Commission pursuant to Rule 424.
The Company will advise the Representative promptly (i) when the Final
Prospectus shall have been filed with the Commission pursuant to Rule
424, (ii) when any amendment to the Registration
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Statement relating to the Certificates shall have become effective,
(iii) of any request by the Commission for any amendment of the
Registration Statement or amendment of or supplement to the Final
Prospectus or for any additional information, (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose, and (v) of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Certificates
is required to be delivered under the Act, any event occurs as a
result of which the Final Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or if it shall be necessary to amend or supplement the Final
Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will prepare and
file with the Commission, subject to the first sentence of paragraph
(a) of this Section 5, an amendment or supplement which will correct
such statement or omission or an amendment which will effect such
compliance and will use its best efforts to cause any required
post-effective amendment to the Registration Statement containing such
amendment to be made effective as soon as possible.
(c) The Company will furnish to the Representative and counsel
for the Underwriters, without charge, executed copies of the
Registration Statement (including exhibits thereto) and each amendment
thereto which shall become effective on or prior to the Closing Date
and, so long as delivery of a prospectus by an Underwriter or dealer
may be required by the Act, as many copies of any Preliminary
Prospectus and the Final Prospectus and any amendments thereof and
supplements thereto as the Representative may reasonably request. The
Company will pay the expenses of printing all documents relating to the
initial offering, provided that any additional expenses incurred in
connection with the requirement of delivery of a market-making
prospectus will be borne by the Representative.
(d) The Company will make available to the Representative the
Certificate Factor for each month as soon as possible after the Company
has received such Certificate Factor from the Servicer pursuant to
Section 13.9 of the Pooling and Servicing Agreement.
(e) The Company will arrange for the qualification of the
Certificates for sale under the laws of such jurisdictions as the
Representative may reasonably designate, will maintain such
qualifications in effect so long as required for the distribution of
the Certificates and will arrange for the determination of the legality
of the Certificates for purchase by institutional investors; provided,
however, that the Company shall not be
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required to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action which would subject it to
general or unlimited service of process in any jurisdiction where it is
not now so subject.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Certificates shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein as of the date hereof, as of the date of the effectiveness of
any amendment to the Registration Statement filed prior to the Closing Date
(including the filing of any document incorporated by reference therein) and as
of the Closing Date, to the accuracy of the statements of the Company made in
any certificates delivered pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall
have been issued, and no proceedings for that purpose shall have been
instituted or threatened; and the Final Prospectus shall have been
filed or mailed for filing with the Commission within the time period
prescribed by the Commission.
(b) The Company shall have furnished to the Representative the
opinion of Stroock & Stroock & Lavan LLP, special counsel for the
Company, dated the Closing Date, to the effect of paragraphs (i), (ii),
(v), (vi), (vii) and (viii) below, and the opinion of a member of the
office of the General Counsel of NationsCredit Corporation, special
counsel for the Company, dated the Closing Date, to the effect of
paragraph (iii) below:
(i) the Certificates, the Purchase Agreement and the
Pooling and Service Agreement conform in all material respects
to the description thereof contained in the Final Prospectus;
(ii) assuming due authorization, execution and
delivery by the other parties thereto, each of this Agreement,
the Purchase Agreement, the Reimbursement Agreement and the
Pooling and Servicing Agreement constitutes a legal, valid and
binding agreement of the Company, enforceable in accordance
with their respective terms against the Company, as the case
may be, subject (a) to the effect of bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or
affecting creditors' rights generally and court decisions with
respect thereto, (b) to the understanding that no opinion is
expressed as to the application of equitable principles in any
proceeding, whether at law or in equity, and (c) to
limitations of public policy under applicable securities laws
as to rights of indemnity and contribution thereunder;
(iii) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company of a character required to be
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disclosed in the Registration Statement which is not
adequately disclosed therein and in the Final Prospectus;
(iv) to the best knowledge of such counsel, there is
no franchise, contract or other document of a character
required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit, which is not
described or filed as required;
(v) the Registration Statement has become effective
under the Act; to the best knowledge of such counsel no stop
order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose
have been instituted or threatened; the Registration
Statement, the Final Prospectus and each amendment thereof or
supplement thereto (other than (i) financial, numerical,
statistical and quantitative information contained therein and
(ii) the information under the heading "The Surety Bond
Issuer," as to which such counsel need express no view) comply
as to form in all material respects with the applicable
requirements of the Act and the Exchange Act and the
respective rules thereunder;
(vi) no consent, approval, authorization or order of
any court or governmental agency or body is required, with
respect to the Company, for the consummation of the
transactions contemplated herein, or in the Purchase
Agreement, the Reimbursement Agreement or the Pooling and
Servicing Agreement, except such as have been obtained under
the Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and
distribution of the Certificates by the Underwriters and such
other a approvals (specified in such opinion) as have been
obtained;
(vii) the Pooling and Servicing Agreement will not be
required to be qualified under the Trust Indenture Act of
1939, as amended, and the Trust is not, and immediately
following the sale of the Certificates pursuant hereto, will
not, be required to be registered under the Investment Company
Act of 1940, as amended; and
(viii) the issuance, offer and sale of the
Certificates have been duly authorized by the Company, and
when issued, authenticated in accordance with the Pooling and
Servicing Agreement and paid for pursuant to this Agreement,
the Certificates will be validly issued and entitled to the
benefits of the Pooling and Servicing Agreement.
Stroock & Stroock & Lavan LLP, special counsel for the Company, shall
also state that it has no reason to believe that the Registration Statement or
any amendment thereof at the time it became effective contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not
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misleading or that the Final Prospectus, as amended or supplemented, as of its
date and as of the Closing Date, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (other than (i) financial, numerical, statistical and quantitative
information contained therein and (ii) the information under the heading "The
Surety Bond Issuer," as to which such counsel need express no view).
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than (i) the United
States or the general corporation laws of the State of Delaware, and (ii) with
respect to Stroock & Stroock & Lavan LLP, the State of New York, to the extent
deemed proper and specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable and who are satisfactory to counsel for
the Underwriters; and (B) as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company or its affiliates and public
officials.
(c) NationsCredit Commercial shall have furnished to the
Representative the opinion of a member of the office of the General
Counsel of NationsCredit Corporation, special counsel for NationsCredit
Commercial, dated the Closing Date, to the effect of paragraphs (i),
(ii), (iv), (v) and (vi) below, and the opinion of Stroock & Stroock &
Lavan LLP, special counsel for NationsCredit Commercial, dated the
Closing Date, to the effect of paragraph (iii) below:
(i) NationsCredit Commercial is a duly organized and
validly existing corporation in good standing under the laws
of the State of North Carolina and has the corporate power and
authority to perform its obligations under the Pooling and
Servicing Agreement, the Purchase Agreement and the
Indemnification Agreement;
(ii) each of the Pooling and Servicing Agreement, the
Purchase Agreement and the Indemnification Agreement has been
duly authorized, executed and delivered by NationsCredit
Commercial;
(iii) assuming due authorization, execution and
delivery by the other parties thereto, each of the Pooling and
Servicing Agreement, the Purchase Agreement and the
Indemnification Agreement constitutes a legal, valid and
binding agreement of NationsCredit Commercial, enforceable in
accordance with their respective terms against NationsCredit
Commercial, as the case may be, subject (a) to the effect of
bankruptcy, insolvency, reorganization, moratorium and similar
laws relating to or affecting creditors' rights generally and
court decisions with respect thereto, (b) to the understanding
that no opinion is expressed as to the application of
equitable principles in any proceeding, whether at law or in
equity, and (c) to limitations of public policy under
applicable securities laws as to rights of indemnity and
contribution thereunder;
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(iv) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving NationsCredit Commercial of a character
required to be disclosed in the Registration Statement which
is not adequately disclosed therein and in the Final
Prospectus;
(v) neither the consummation of any of the
transactions contemplated in the Pooling and Servicing
Agreement, the Purchase Agreement or the Indemnification
Agreement, nor the fulfillment of the terms thereof will
conflict with, result in a breach of, or constitute a default
under the articles of incorporation or by-laws of
NationsCredit Commercial; and
(vi) neither the consummation of any of the
transactions contemplated in the Pooling and Servicing
Agreement, the Purchase Agreement or the Indemnification
Agreement, nor the fulfillment of the terms thereof will
conflict with, result in a breach of, or constitute a default
under the terms of any indenture or other agreement or
instrument known to such counsel and to which NationsCredit
Commercial is a party or bound, or any order or regulation
known to such counsel to be applicable to NationsCredit
Commercial of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over NationsCredit Commercial.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than (i) the
United States or the general corporation laws of the State of Delaware. (ii)
with respect to the office of the General Counsel of NationsCredit Corporation,
the general corporation law of the State of North Carolina, and (iii) with
respect to Stroock & Stroock & Lavan LLP, the State of New York, to the extent
deemed proper and specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable and who are satisfactory to counsel for
the Underwriters; and (B) as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of NationsCredit Commercial or its
affiliates and public officials.
(d) The Company shall have furnished to the Representative an
opinion of Stroock & Stroock & Lavan LLP, special counsel for the
Company, dated the Closing Date, to the effect that:
(i) the statements in the Final Prospectus under the
heading "Certain Federal Income Tax Consequences" and the
summary thereof under the heading "Prospectus Summary--Tax
Status," to the extent they constitute matters of Federal law
or legal conclusions with respect thereto, have been reviewed
by such counsel and are correct in all material respects; and
(ii) the statements in the Final Prospectus under the
headings "Certain Legal Aspects of the Receivables" and "ERISA
Considerations," to the extent
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they constitute matters of Federal law or legal conclusions
with respect thereto, have been reviewed by such counsel and
are correct in all material respects.
(e) The Company shall have furnished to the Representative an
opinion or opinions of Stroock & Stroock & Lavan LLP, special counsel
for the Company, dated the Closing Date, to the effect that (A) the
separate corporate existence of the Company would not be disregarded so
as to include the assets and liabilities of the Company in the
bankruptcy estate of NationsCredit Commercial in the event of a
bankruptcy proceeding with respect thereto; and (B) the Depositor
Receivables were sold and transferred from NationsCredit Commercial to
the Company in a manner such that the Depositor Receivables would not
be considered to be property of the bankruptcy estate of NationsCredit
Commercial in the event of a bankruptcy proceeding with respect
thereto. In addition, the Representative shall have received a reliance
letter with respect to any opinion that the Company is required to
deliver to each Rating Agency.
(f) NCMF shall have furnished to the Representative the opinion of
a member of the office of the General Counsel of NationsCredit
Corporation, special counsel for NCMF, dated the Closing Date, to the
effect of paragraphs (i), (ii), (iv) and (v) below, and the opinion of
Stroock & Stroock & Lavan LLP, special counsel for NCMF, dated the
Closing Date, to the effect of paragraph (iii) below:
(i) NCMF is a duly organized and validly existing
corporation in good standing under the laws of the State of
Delaware and has the corporate power and authority to perform
its obligations under the Assignment Agreement, dated as of
April 30, 1997, between NCMF and the Trustee (the "Assignment
Agreement") and the Agreement, dated as of April 30, 1997
between NCMF and Receivables Capital Corporation (the "NCMF
Agreement");
(ii) each of the Assignment Agreement and the NCMF
Agreement has been duly authorized, executed and delivered by
NCMF;
(iii) assuming due authorization, execution and
delivery by the other parties thereto, each of the Assignment
Agreement and the NCMF Agreement constitutes a legal, valid
and binding agreement of NCMF, enforceable in accordance with
their respective terms against NCMF, as the case may be,
subject (a) to the effect of bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or
affecting creditors' rights generally and court decisions with
respect thereto, (b) to the understanding that no opinion is
expressed as to the application of equitable principles in any
proceeding, whether at law or in equity, and (c) to
limitations of public policy under applicable securities laws
as to rights of indemnity and contribution thereunder;
(iv) neither the consummation of any of the
transactions contemplated in the Assignment Agreement and the
NCMF Agreement, nor the fulfillment of
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the terms thereof will conflict with, result in a breach of,
or constitute a default under the articles of incorporation or
by-laws of NCMF; and
(v) neither the consummation of any of the
transactions contemplated in the Assignment Agreement and the
NCMF Agreement, nor the fulfillment of the terms thereof will
conflict with, result in a breach of, or constitute a default
under the terms of any indenture or other agreement or
instrument known to such counsel and to which NCMF is a party
or bound, or any order or regulation known to such counsel to
be applicable to NCMF of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over NCMF.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than (i) the
United States or the general corporation laws of the States of Delaware, and
(ii) with respect to Stroock & Stroock & Lavan LLP, the State of New York, to
the extent deemed proper and specified in such opinion, upon the opinion of
other counsel of good standing believed to be reliable and who are satisfactory
to counsel for the Underwriters; and (B) as to matters of fact, to the extent
deemed proper, on certificates of responsible officers of NationsCredit
Commercial or its affiliates and public officials.
(g) The Representative shall have received an opinion from
Jenkens & Gilchrist, a Professional Corporation, special counsel to the
Company, dated the Closing Date, to the effect that:
(i) the Receivables, including the security interests
in the boats securing the Receivables evidenced by the related
certificates of title, constitute chattel paper pursuant to
the Uniform Commercial Code as in effect in the State of Texas
(the "Texas UCC");
(ii) the UCC-1 financing statement to evidence sale
and assignment of the Depositor Receivables from the Company
to the Trustee (the "Financing Statement") is in appropriate
form for filing in the Office of the Secretary of State of the
State of Texas (the "Filing Office") under the Texas UCC. Upon
the filing of the Financing Statement in the filing office by
the Company, the sale of the Depositor Receivables to the
Trustee will be completed. In the event that a court concludes
that the transactions contemplated by the Pooling and
Servicing Agreement do not constitute a sale of such Depositor
Receivables, then to the extent that a security interest is
created under the Pooling and Servicing Agreement in favor of
the Trustee in the Depositor Receivables, upon the filing of
the Financing Statement in the Filing Office, the security
interest in favor of the Trustee in the Depositor Receivables
and the proceeds thereof will be perfected and, under the
Texas UCC, no other security interest of any creditor of the
Company will be equal or prior to the security interest in the
Depositor
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<PAGE> 12
Receivables of the Trustee on behalf of the Trust for the
benefit of the Certificateholders; and
(iii) the UCC-1 financing statement to evidence sale
and assignment of the NCMF Receivables from the Company to the
Trustee (the "NCMF Financing Statement") is in appropriate
form for filing in the Office of the Secretary of State of the
State of Texas under the Texas UCC. Upon the filing of the
NCMF Financing Statement in the filing office by the Company,
the sale of the NCMF Receivables to the Trustee will be
completed. In the event that a court concludes that the
transactions contemplated by the Assignment Agreement do not
constitute a sale of such NCMF Receivables, then to the extent
that a security interest is created under the Assignment
Agreement in favor of the Trustee in the NCMF Receivables,
upon the filing of the NCMF Financing Statement in the Filing
Office, the security interest in favor of the Trustee in the
NCMF Receivables and the proceeds thereof will be perfected
and, under the Texas UCC, no other security interest of any
creditor of the Company will be equal or prior to the security
interest in the NCMF Receivables of the Trustee on behalf of
the Trust for the benefit of the Certificateholders.
(h) The Representative shall have received an opinion from
Hunton & Williams, special counsel to the Company, dated the Closing
Date, to the effect that:
(i) the Depositor Receivables, including the security
interests in the boats securing the Depositor Receivables
evidenced by the related certificates of title, constitute
chattel paper pursuant to the Uniform Commercial Code as in
effect in the State of Georgia (the "Georgia UCC"); and
(ii) the UCC-1 financing statement to evidence sale
and assignment of the Depositor Receivables from NationsCredit
Commercial to the Company (the "Financing Statement") is in
appropriate form for filing in the Office of the Secretary of
State of the State of Georgia (the "Filing Office") under the
Georgia UCC. Upon the filing of the Financing Statement in the
filing office by the Company, the sale of the Depositor
Receivables to the Trustee will be completed. In the event
that a court concludes that the transactions contemplated by
the Pooling and Servicing Agreement do not constitute a sale
of such Depositor Receivables, then to the extent that a
security interest is created under the Pooling and Servicing
Agreement in favor of the Trustee in the Depositor
Receivables, upon the filing of the Financing Statement in the
Filing Office, the security interest in favor of the Trustee
in the Depositor Receivables and the proceeds thereof will be
perfected and, under the Georgia UCC, no other security
interest of any creditor of the Company will be equal or prior
to the security interest in the Depositor Receivables of the
Trustee on behalf of the Trust for the benefit of the
Certificateholders.
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<PAGE> 13
(i) The Representative shall have received an opinion of counsel
to the Trustee, dated the Closing Date, to the effect that:
(i) the Trustee has been duly incorporated and is
validly existing as a banking corporation under the laws of
the State of New York and has the power and authority to enter
into and to perform all actions required of it under the
Pooling and Servicing Agreement;
(ii) the Pooling and Servicing Agreement has been
duly authorized, executed and delivered by the Trustee, and
constitutes a legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with
its terms except as such enforceability may be limited by (A)
bankruptcy, insolvency, liquidation, reorganization,
moratorium, conservatorship, receivership or other similar
laws now or hereafter in effect relating to the enforcement of
creditors' rights in general, as such laws would apply in the
event of a bankruptcy, insolvency, liquidation,
reorganization, moratorium, conservatorship, receivership or
similar occurrence affecting the Trustee, and (B) general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law) as well as concepts of reasonableness, good faith and
fair dealing;
(iii) the Certificates have been duly executed on
behalf of the Trust, authenticated and delivered by the
Trustee;
(iv) the execution and delivery of the Pooling and
Servicing Agreement and, on behalf of the Trust, the
Certificates, by the Trustee and the performance by the
Trustee of the terms thereof do not conflict with or result in
a violation of (A) any law or regulation of the United States
or the State of New York governing the banking or trust powers
of the Trustee, or (B) the certificate of incorporation or
articles of association or by-laws of the Trustee; and
(v) no approval, authorization or other action by, or
filing with, any governmental authority of the United States
or the State of New York having jurisdiction over the banking
or trust powers of the Trustee is required in connection with
the execution and delivery by the Trustee of the Pooling and
Servicing Agreement and, on behalf of the Trust, the
Certificates, or the performance by the Trustee thereunder.
(j) The Representative shall have received an opinion of Shaw,
Pittman, Potts & Trowbridge, special counsel for the Surety Bond
Issuer, dated the Closing Date, to the effect that:
(i) the Surety Bond Issuer is a New York domiciled
monoline stock insurance company which engages only in the
business of financial guaranty insurance and is duly
incorporated, validly existing, in good standing and licensed
-13-
<PAGE> 14
to transact business under the laws of the State of New York
and has the full power and authority (corporate and otherwise)
to issue, and to take all action required of it under, the
Surety Bond;
(ii) the execution, delivery and performance by the
Surety Bond Issuer of the Surety Bond have been duly
authorized by all necessary corporate action on the part of
the Surety Bond Issuer;
(iii) the execution, delivery and performance by the
Surety Bond Issuer of the Surety Bond do not require the
consent or approval of, the giving of notice to, the prior
registration with, or the taking of any other action in
respect of any state or other governmental agency or authority
which has not previously been obtained or effected; provided,
however, the New York State Insurance Law requires that policy
forms and any amendments thereto shall be filed with the
Superintendent of the New York State Insurance Department
within thirty (30) days of their use by the insurer if not
previously so filed;
(iv) the Surety Bond has been duly authorized,
executed and delivered by the Surety Bond Issuer and
constitutes the legally valid and binding obligation of the
Surety Bond Issuer, enforceable in accordance with its terms
subject, as to enforcement, to (a) bankruptcy, reorganization,
insolvency, moratorium and other laws relating to or affecting
the enforcement of creditors' rights generally, including,
without limitation, laws relating to fraudulent transfers or
conveyances, preferences and equitable subordination,
presently or from time to time in effect and general
principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law) and (b) the
qualification that the remedy of specific performance may be
subject to equitable defenses and to the discretion of the
court before which any proceedings with respect thereto may be
brought; and
(v) the Surety Bond is not required to be registered
under the Securities Act of 1933, as amended, in connection
with the offer and sale of the Certificates in the manner
contemplated by the Final Prospectus.
(k) The Surety Bond Issuer shall have furnished to the
Representative a certificate of the Surety Bond Issuer, signed by any
of a Managing Director or General Counsel, dated the Closing Date, to
the effect that the signer of such certificate has carefully examined
the Registration Statement (excluding any documents incorporated by
reference therein), the Final Prospectus and this Agreement and that,
to the best of his knowledge:
(i) any information with respect to the Surety Bond
Issuer in the Registration Statement or any amendment thereof
at the time it became effective did not contain any untrue
statement of a material fact or omit to state a material
-14-
<PAGE> 15
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(ii) any information with respect to the Surety Bond
Issuer in the Final Prospectus, as amended or supplemented, as
of its date and as of the Closing Date, did not contain any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; and
(iii) there has been no change in the financial
condition of the Surety Bond Issuer since December 31, 1996
which would have a material adverse effect on the Surety Bond
Issuer's ability to meet its obligations under the Surety
Bond.
(l) The Company shall have furnished to the Representative a
certificate of the Company, signed by (i) any of the Chairman of the
Board, the President or any Vice President, and (ii) any of the
principal treasury officer, the principal financial officer or the
principal accounting officer of the Company, dated the Closing Date, to
the effect that the signers of such certificate have carefully examined
the Registration Statement (excluding any documents incorporated by
reference therein), the Final Prospectus and this Agreement and that,
to the best of their knowledge:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement, as amended, has been issued, and
no proceedings for that purpose have been instituted or
threatened; and
(iii) since the respective dates as of which
information is given in the Final Prospectus, there has been
no material adverse change in the condition (financial or
other), earnings, business or properties of the Company,
whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in
the Final Prospectus.
(m) On the date hereof and on the Closing Date, Price Waterhouse
LLP and/or any other firm of certified independent public
accountants acceptable to the Representative shall have furnished to
the Representative a letter, dated the date hereof and the date of the
Closing Date, respectively, in form and substance satisfactory to the
Representative, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder, and stating in
effect that using the assumptions and methodology
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<PAGE> 16
used by the Company, all of which shall be described in such letter,
they have recalculated such numbers and percentages set forth in the
Final Prospectus as the Representative may reasonably request and
agreed to by Price Waterhouse LLP, compared the results of their
calculations to the corresponding items in the Final Prospectus, and
found each such number and percentage set forth in the Final Prospectus
to be in agreement with the results of such calculations. To the extent
historical financial information with respect to the Company and/or
historical financial, delinquency or related information with respect
to one or more Servicers is included in the Final Prospectus, such
letter or letters shall also relate to such information.
(n) The Certificates shall have received the rating of "AAA" from
Standard & Poor's Rating Services and "Aaa" from Moody's Investors
Service, Inc.
(o) On or prior to the Closing Date, NationsCredit Commercial
shall have executed the Indemnification Agreement, substantially in the
form of Exhibit A hereto.
(p) Prior to the Closing Date, the Company shall have furnished to
the Representative such further information, certificates and
documents as the Representative may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representative and its counsel, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representative. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Certificates provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Certificates.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or
-16-
<PAGE> 17
alleged untrue statement of a material fact contained in the Registration
Statement for the registration of the Certificates as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the Final Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and agrees to reimburse each such indemnified party for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that (i)
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representative
specifically for use in connection with the preparation thereof and (ii) such
indemnity with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage or liability purchased
the Certificates which are the subject thereof if such person did not receive a
copy of the Final Prospectus (or the Final Prospectus as amended or
supplemented) at or prior to the confirmation of the sale of such Certificates
to such person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in any Preliminary
Prospectus was corrected in the Final Prospectus (or the Final Prospectus as
amended or supplemented). This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representative
specifically for use in the preparation of the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges
that the statements set forth under the heading "Underwriting" constitute the
only information furnished in writing by or on behalf of the several
Underwriters for inclusion in the documents referred to in the foregoing
indemnity, and you, as the Representative, confirm that such statements are
correct.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and, to the extent
that it may elect by written notice delivered to the
-17-
<PAGE> 18
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
Representative in the case of subparagraph (a), representing the indemnified
parties under subparagraph (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party; and except that if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii). After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party, which will not be unreasonably
withheld, unless such indemnifying party waived its rights under this Section 8
in writing in which case the indemnified party may effect such a settlement
without such consent. No indemnifying party may avoid its duty to indemnify
under this Section 8 if such indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of or
consent to the entry of any judgment in, any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified party from all
liability on all claims that are the subject matter of such action. An
indemnifying party shall not be liable for any settlement of any claim effected
without its consent unless its right to consent under this Section 8 has been
waived in writing
(d) To provide for just and equitable contribution in circumstances in
which the indemnification provided for in paragraph (a) or (b) of this Section 8
is due in accordance with its terms but is for any reason held by a court to be
unavailable from the Company or the Underwriters on the grounds of policy or
otherwise, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to which
the Company and one or more of the Underwriters may be subject, in such
proportion so that the
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<PAGE> 19
Underwriters are responsible for that portion represented by the percentage that
the underwriting discount bears to the sum of such discount and the purchase
price of the Certificates specified in Schedule I hereto and the Company is
responsible for the balance; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Certificates) be responsible for any amount in
excess of the underwriting discount applicable to the Certificates purchased by
such Underwriter hereunder.
Notwithstanding anything to the contrary in this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Underwriter within the meaning of either the Act or
the Exchange Act shall have the same rights to contribution as such Underwriter,
and each person who controls the Company within the meaning of either the Act or
the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the preceding
sentence of this paragraph (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be, sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Certificates agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Certificates set
forth opposite their names in Schedule I hereto bear to the aggregate amount of
Certificates set forth opposite the names of all the remaining Underwriters) the
Certificates which the defaulting Underwriter or Underwriters agreed but failed
to purchase; provided, however, that in the event that the aggregate amount of
Certificates which the defaulting Underwriter or Underwriters agreed but failed
to purchase shall exceed 10% of the aggregate amount of Certificates set forth
in Schedule I hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Certificates, and if such nondefaulting Underwriters do not purchase all the
Certificates, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Representative shall determine
in order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
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<PAGE> 20
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representative, by notice given to the Company prior
to delivery of and payment for the Certificates, if prior to such time (i)
trading in securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum prices shall have been established on such
Exchange, or (ii) there shall have occurred any outbreak or material escalation
of hostilities or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the judgment of the
Representative, impracticable to market the Certificates.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Certificates. The provisions of
Section 7 and 8 hereof and this Section 11 shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representative, will be mailed,
delivered or telegraphed to NationsBanc Capital Markets, Inc., NationsBank
Corporate Center, NC1-007-10-07, 100 North Tryon Street, Charlotte, North
Carolina 28255, Attention: Russell C. Albers, Managing Director, and to any
other Representative at such address, if any, as is specified in writing to the
Company for notices hereunder; or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to NationsCredit Commercial Corporation
of America, 225 E. John Carpenter Freeway, Irving, Texas 75062-2731, Attention:
Larry Angelilli, Vice President, with a copy to: NationsCredit Corporation, One
Canterbury Green, 201 Broad Street, Stamford, Connecticut 06901, Attention: John
Stockton, General Counsel.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICT OF LAWS.
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<PAGE> 21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
NATIONSCREDIT SECURITIZATION CORPORATION
By: /s/ Lawrence Angelilli
---------------------------------
Lawrence Angelilli
Vice President
The foregoing Agreement is hereby confirmed and accepted as of the date first
written above.
NATIONSBANC CAPITAL MARKETS, INC.,
as Representative
By: NATIONSBANC CAPITAL MARKETS, INC.
By: /s/ Russell C. Albers
----------------------------------
Russell C. Albers
Managing Director
For themselves and as Representative
for the other several Underwriters,
if any named in Schedule I to the
foregoing Agreement
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<PAGE> 22
SCHEDULE I
Principal Amount
of Certificates to
Underwriters be Purchased
- ------------ ------------
NationsBanc Capital Markets, Inc.................... $ 90,890,562.82
---------------
Bear, Stearns & Co. Inc............................. $ 90,890,562.81
---------------
Total...................................... $181,781,125.63
---------------
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<PAGE> 23
EXHIBIT A
INDEMNIFICATION AGREEMENT
-------------------------
This Indemnification Agreement is entered into between NationsCredit
Commercial Corporation of America, a North Carolina corporation
("NationsCredit"), and NationsBanc Capital Markets, Inc., in its individual
capacity and as representative of the underwriters identified on Schedule I
hereto (collectively, the "Underwriters"), dated as of May 15, 1997.
The Underwriters and NationsCredit Securitization Corporation, a
Delaware corporation (the "Company"), have entered into an Underwriting
Agreement (the "Underwriting Agreement"), dated as of May 15, 1997, providing
for the sale by the Company to the Underwriters of the 6.75% Marine
Receivable-Backed Certificates (the "Certificates") of the NationsCredit Grantor
Trust 1997-1 (the "Trust"). The Certificates represent beneficial interests in a
pool of marine retail installment sale contracts secured by new and used boats,
boat motors and boat trailers (the "Receivables"), sold by NationsCredit to the
Company pursuant to the Purchase Agreement (the "Purchase Agreement"), dated as
of April 30, 1997, and certain monies received under the Simple Interest
Receivables and certain monies due under the Precomputed Receivables, in each
case, on or after May 15, 1997, security interests in the boats and marine
equipment financed thereby, an irrevocable surety bond, limited in amount,
covering certain payments under the Receivables (the "Surety Bond"), issued by
Capital Markets Assurance Corporation (the "Surety Bond Issuer"), such amounts
as from time to time may be held in one or more trust accounts which will be
established and maintained by the Servicer pursuant to the Pooling and Servicing
Agreement, the fights of the Company under that certain Purchase Agreement dated
as of April 30, 1997 between the Company and NationsCredit, the rights of
NationsCredit Marine Funding Corporation ("NCMF") to cause NationsCredit to
repurchase the NCMF Receivables upon the breach of certain representations and
warranties, the proceeds from any recourse rights of NCMF or the Company against
any seller of new and used boats, boat motors and boat trailers financed by the
Receivables pursuant to any agreement with a Dealer, the right to proceeds from
claims on physical damage, credit life and disability insurance policies
relating to the Receivables, and any property that shall have secured a
Receivable and that shall have been acquired by the Trustee. The Certificates
will be issued pursuant to a Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of April 30, 1997, among the Company as
Depositor, NationsCredit as Servicer and Bankers Trust Company as Trustee. This
Indemnification Agreement is being entered into by the parties hereto as a
condition to the execution of Underwriting Agreement and to induce the
Underwriters to execute the same. Capitalized terms used but not defined herein
shall have the meanings ascribed thereto in the Underwriting Agreement.
1. Indemnification. (a) NationsCredit agrees to indemnify and hold
harmless each Underwriter and each person who controls any Underwriter within
the meaning of either the Act
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<PAGE> 24
or the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Certificates as originally
filed or in any amendment thereof, or in any Preliminary Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) NationsCredit will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company or NationsCredit by or on behalf of any
Underwriter through the Representatives specifically for use in connection with
the preparation thereof and (ii) such indemnity with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from s whom the person asserting any such loss,
claim. damage or liability purchased the Certificates which are the subject
thereof if such person did not receive a copy of the Final Prospectus (or the
Final Prospectus as amended or supplemented) at or prior to the confirmation of
the sale of such Certificates to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in any Preliminary Prospectus was corrected in the Final Prospectus
(or the Final Prospectus as amended or supplemented). This indemnity agreement
will be in addition to any liability which NationsCredit may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
NationsCredit, each of its directors, and each person who controls NationsCredit
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from NationsCredit to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company or NationsCredit by or on behalf of such Underwriter through the
Representatives specifically for use in the preparation of the documents
referred to in the foregoing indemnity. This indemnity agreement will be in
addition to any liability which any Underwriter may otherwise have.
NationsCredit acknowledges that the statements set forth under the heading
"Underwriting" constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in the documents referred to in
the foregoing indemnity, and the Representatives confirm that such statements
are correct.
(c) Promptly after receipt by an indemnified party under this
Indemnification Agreement of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Indemnification Agreement, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
-24-
<PAGE> 25
have to any indemnified party otherwise than under this Indemnification
Agreement. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and, to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the light to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Indemnification Agreement for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Representatives in the case of
subparagraph (a) and approved by NationsCredit in the case of subparagraph (b),
representing the indemnified parties under Subparagraph (a) who are parties to
such action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that if clause (i) or
(iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). After such notice from the indemnifying
party to such indemnified party, the indemnifying party will not be liable for
the costs and expenses of any settlement of such action effected by such
indemnified party without the consent of the indemnifying party, which will not
be unreasonably withheld, unless such indemnifying party waived its rights under
this Indemnification Agreement in writing in which case the indemnified party
may effect such a settlement without such consent. No indemnifying party may
avoid its duty to indemnify under this Indemnification Agreement if such
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of any
judgment in, any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on all claims
that are the subject matter of such action. An indemnifying party shall not be
liable for any settlement of any claim effected without its consent unless its
right to consent under this Indemnification Agreement has been waived in
writing.
2. Contribution. To provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section l (a) or l
(b) of this Indemnification Agreement
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<PAGE> 26
is due in accordance with its terms but is for any a reason held by a court to
be unavailable from NationsCredit or the Underwriters on the grounds of policy
or otherwise, NationsCredit and the Underwriters shall a contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
to which NationsCredit and one or more of the Underwriters may be subject, in
such proportion so that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount bears to the sum of
such discount and the purchase price of the Certificates specified in Schedule I
hereto and NationsCredit is responsible for the balance; provided, however, that
in no case shall any Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the Certificates) be responsible
for any amount in excess of the underwriting discount applicable to the
Certificates purchased by such Underwriter hereunder.
Notwithstanding anything to the contrary in this Section 2, no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Indemnification
Agreement, each person who controls an Underwriter within the meaning of either
the Act or the Exchange Act shall have the same rights to contribution as such
Underwriter, and each person who controls NationsCredit within the meaning of
either the Act or the Exchange Act and each director of NationsCredit shall have
the same rights to contribution as NationsCredit, subject in each case to the
preceding sentence of this Section 2. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 2, notify such party
or parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section 2.
3. No Termination. NationsCredit agrees that it shall not terminate,
amend or modify the Purchase Agreement or the Pooling and Servicing Agreement or
in each case any portion thereof without the prior written consent of each
Underwriter.
4. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed to NationsBanc Capital Markets, Inc., NationsBank
Corporate Center, NC1-007-10-07, 100 North Tryon Street, Charlotte, North
Carolina 28255, Attention: Russell C. Albers, Managing Director, and to any
other Representative at such address, if any, as is specified in writing to
NationsCredit for notices hereunder; or, if sent to NationsCredit, will be
mailed, delivered or telegraphed and confirmed to it at NationsCredit Commercial
Corporation of America, 225 E. John Carpenter Freeway, Irving, Texas 75062-2731,
Attention: Larry Angelilli, Vice President, with a copy to: NationsCredit
Corporation, One Canterbury Green, 201 Broad Street, Stamford, Connecticut
06901, Attention: John Stockton, General Counsel.
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<PAGE> 27
5. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 1 hereof, and no
other person will have any right or obligation hereunder.
6. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICT OF LAWS.
7. Counterparts. This Indemnification Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original, but all of such counterparts shall together constitute one instrument.
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<PAGE> 28
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among
NationsCredit and the several Underwriters.
NATIONSCREDIT COMMERCIAL
CORPORATION OF AMERICA
By:
--------------------------------
Lawrence Angelilli
Vice President
NATIONSBANC CAPITAL MARKETS, INC.,
as Representative
By: NATIONSBANC CAPITAL MARKETS, INC.
By:
---------------------------
Russell C. Albers
Managing Director
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<PAGE> 29
SCHEDULE I
Underwriters
------------
NationsBanc Capital Markets, Inc.
Bear, Stearns & Co. Inc.
-29-
<PAGE> 1
EXHIBIT 4.1
NATIONSCREDIT SECURITIZATION CORPORATION,
Depositor,
NATIONSCREDIT COMMERCIAL CORPORATION OF AMERICA,
Servicer,
and
BANKERS TRUST COMPANY,
Trustee and Collateral Agent.
POOLING AND SERVICING AGREEMENT
Dated as of April 30, 1997
$181,781,125.63
NationsCredit Grantor Trust 1997-1
6.75% Marine Receivable-Backed Certificates
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
SECTION 1.1. CREATION OF TRUST................................................................................1
ARTICLE II
SECTION 2.1. CONVEYANCE OF DEPOSITOR RECEIVABLES AND NCMF RECEIVABLES.........................................1
ARTICLE III
SECTION 3.1. SURETY BOND......................................................................................3
ARTICLE IV
SECTION 4.1. ACCEPTANCE BY TRUSTEE............................................................................3
ARTICLE V
SECTION 5.1. INCORPORATION OF STANDARD TERMS AND CONDITIONS OF AGREEMENT......................................3
ARTICLE VI
SECTION 6.1. SPECIAL DEFINITIONS AND TERMS....................................................................4
ARTICLE VII
SECTION 7.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.......................................5
ARTICLE VIII
SECTION 8.1. NATIONSCREDIT COMMERCIAL NOT TO RESIGN AS SERVICER...............................................6
ARTICLE IX
SECTION 9.1. AGENTS FOR SERVICE...............................................................................7
ARTICLE X
SCHEDULE A.....................................................................................................1
SCHEDULE B.....................................................................................................1
SCHEDULE C.....................................................................................................1
ARTICLE XI
DEFINITIONS
SECTION 11.1. DEFINITIONS.....................................................................................1
SECTION 11.2. USAGE OF TERMS.................................................................................12
SECTION 11.3. CUTOFF DATE AND RECORD DATE....................................................................13
SECTION 11.4. SECTION REFERENCES.............................................................................13
ARTICLE XII
THE RECEIVABLES
SECTION 12.1. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR....................................................13
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
SECTION 12.2. REPURCHASE UPON BREACH.........................................................................16
SECTION 12.3. CUSTODY OF RECEIVABLE FILES....................................................................16
SECTION 12.4. DUTIES OF SERVICER AS CUSTODIAN................................................................17
SECTION 12.5. INSTRUCTIONS; AUTHORITY TO ACT.................................................................17
SECTION 12.6. CUSTODIAN'S INDEMNIFICATION....................................................................17
SECTION 12.7. EFFECTIVE PERIOD AND TERMINATION...............................................................18
ARTICLE XIII
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 13.1. DUTIES OF SERVICER.............................................................................18
SECTION 13.2. COLLECTION OF RECEIVABLES PAYMENTS.............................................................19
SECTION 13.3. REALIZATION UPON RECEIVABLES...................................................................19
SECTION 13.4. PHYSICAL DAMAGE INSURANCE......................................................................19
SECTION 13.5. MAINTENANCE OF SECURITY INTERESTS IN BOATS.....................................................19
SECTION 13.6. COVENANTS OF SERVICER..........................................................................20
SECTION 13.7. PURCHASE OF RECEIVABLES UPON BREACH............................................................20
SECTION 13.8. SERVICING FEE..................................................................................21
SECTION 13.9. SERVICER'S CERTIFICATE.........................................................................21
SECTION 13.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT...........................................21
SECTION 13.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REPORT........................................22
SECTION 13.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING RECEIVABLES..........................22
SECTION 13.13. SERVICER EXPENSES..............................................................................22
SECTION 13.14. APPOINTMENT OF SUB-SERVICER....................................................................23
SECTION 13.15. REPRESENTATIONS AND WARRANTIES OF THE SERVICER WITH RESPECT TO THE NCMF RECEIVABLES............23
ARTICLE XIV
DISTRIBUTIONS: STATEMENTS TO CERTIFICATEHOLDERS
SECTION 14.1. ACCOUNTS.......................................................................................26
SECTION 14.2. COLLECTIONS....................................................................................28
SECTION 14.3. APPLICATION OF COLLECTIONS.....................................................................29
SECTION 14.4. ADDITIONAL DEPOSITS............................................................................29
SECTION 14.5. DISTRIBUTIONS..................................................................................30
SECTION 14.6. NET DEPOSITS...................................................................................32
SECTION 14.7. STATEMENTS TO CERTIFICATEHOLDERS...............................................................32
ARTICLE XIV A
THE SURETY BOND
SECTION 14A.1. THE SURETY BOND...............................................................................33
SECTION 14A.2. PREFERENCE EVENTS.............................................................................33
SECTION 14A.3. SURRENDER OF SURETY BOND......................................................................33
SECTION 14A.4. REPLACEMENT SURETY BOND.......................................................................33
ARTICLE XV
THE CERTIFICATES
SECTION 15.1. THE CERTIFICATES...............................................................................34
SECTION 15.2. AUTHENTICATION OF CERTIFICATES.................................................................34
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
SECTION 15.3. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES..........................................34
SECTION 15.4. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES..............................................35
SECTION 15.5. PERSONS DEEMED OWNERS..........................................................................35
SECTION 15.6. ACCESS TO LIST OF CERTIFICATEHOLDERS NAMES AND ADDRESSES.......................................36
SECTION 15.7. MAINTENANCE OF OFFICE OR AGENCY................................................................36
SECTION 15.8. BOOK-ENTRY CERTIFICATES........................................................................36
SECTION 15.9. NOTICES TO CLEARING AGENCY.....................................................................37
SECTION 15.10. DEFINITIVE CERTIFICATES........................................................................37
ARTICLE XVI
THE DEPOSITOR
SECTION 16.1. REPRESENTATIONS OF DEPOSITOR......................................................................38
SECTION 16.2. LIABILITY OF DEPOSITOR; INDEMNITIES............................................................39
SECTION 16.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF DEPOSITOR......................40
SECTION 16.4. LIMITATION ON LIABILITY OF DEPOSITOR AND OTHERS................................................41
SECTION 16.5. DEPOSITOR MAY OWN CERTIFICATES.................................................................41
SECTION 16.6. DEPOSITOR'S INTEREST IN RESERVE ACCOUNT; NO TRANSFER...........................................41
ARTICLE XVII
THE SERVICER
SECTION 17.1. REPRESENTATIONS OF SERVICER....................................................................42
SECTION 17.2. LIABILITY OF SERVICER; INDEMNITIES.............................................................43
SECTION 17.3. MERGER OR CONSOLIDATION OF. OR ASSUMPTION OF THE OBLIGATIONS OF THE SERVICER..................45
SECTION 17.4. LIMITATION ON LIABILITY OF SERVICER AND OTHERS.................................................45
ARTICLE XVIII
DEFAULT
SECTION 18.1. EVENTS OF DEFAULT..............................................................................46
SECTION 18.2. APPOINTMENT OF SUCCESSOR.......................................................................48
SECTION 18.3. NOTIFICATION TO CERTIFICATEHOLDERS.............................................................49
SECTION 18.4. WAIVER OF PAST DEFAULTS........................................................................49
ARTICLE XIX
THE TRUSTEE
SECTION 19.1. DUTIES OF TRUSTEE..............................................................................49
SECTION 19.2 TRUSTEE'S CERTIFICATE..........................................................................52
SECTION 19.3. TRUSTEE'S ASSIGNMENT OF PURCHASED RECEIVABLES..................................................52
SECTION 19.4. CERTAIN MATTERS AFFECTING TRUSTEE..............................................................52
SECTION 19.5. TRUSTEE NOT LIABLE FOR CERTIFICATES OR RECEIVABLES.............................................53
SECTION 19.6. TRUSTEE MAY OWN CERTIFICATES...................................................................55
SECTION 19.7. TRUSTEE'S FEES AND EXPENSES....................................................................55
SECTION 19.8. REPRESENTATIONS AND WARRANTIES OF TRUSTEE......................................................55
SECTION 19.9. ELIGIBILITY REQUIREMENTS FOR TRUSTEE...........................................................56
SECTION 19.10. RESIGNATION OR REMOVAL OF TRUSTEE..............................................................56
SECTION 19.11. SUCCESSOR TRUSTEE AND COLLATERAL AGENT.........................................................57
SECTION 19.12. MERGER OR CONSOLIDATION OF TRUSTEE.............................................................58
</TABLE>
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<TABLE>
<S> <C>
SECTION 19.13. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.................................................58
ARTICLE XX
TERMINATION
SECTION 20.1. TERMINATION OF THE TRUST.......................................................................59
SECTION 20.2. OPTIONAL PURCHASE OF ALL RECEIVABLES...........................................................60
ARTICLE XXI
MISCELLANEOUS PROVISIONS
SECTION 21.1. AMENDMENT......................................................................................61
SECTION 21.2. PROTECTION OF TITLE TO TRUST...................................................................62
SECTION 21.3. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.....................................................64
SECTION 21.4. GOVERNING LAW..................................................................................65
SECTION 21.5. NOTICES........................................................................................65
SECTION 21.6. SEVERABILITY OF PROVISIONS.....................................................................66
SECTION 21.7. ASSIGNMENT.....................................................................................66
SECTION 21.8. CERTIFICATES NONASSESSABLE AND FULLY PAID......................................................66
SECTION 21.9. NO PETITION....................................................................................66
SECTION 21.10. SURETY BOND ISSUER AS CONTROLLING PARTY........................................................67
EXHIBIT A......................................................................................................1
EXHIBIT B: FORM OF CERTIFICATE.................................................................................1
EXHIBIT C......................................................................................................1
EXHIBIT D: MONTHLY SERVICER REPORT.............................................................................1
EXHIBIT E: CERTIFICATEHOLDER STATEMENT.........................................................................1
EXHIBIT F: TRUSTEE'S CERTIFICATE...............................................................................1
</TABLE>
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<PAGE> 6
This Pooling and Servicing Agreement, dated as of April 30,
1997, is made with respect to the formation of the NationsCredit Grantor Trust
1997-1, among NATIONSCREDIT SECURITIZATION CORPORATION, a Delaware corporation,
as Depositor (the "Depositor"), NATIONSCREDIT COMMERCIAL CORPORATION OF AMERICA,
a North Carolina corporation, as Servicer ("NationsCredit Commercial" or the
"Servicer"), and BANKERS TRUST COMPANY, as Trustee (the "Trustee") and as
Collateral Agent (the "Collateral Agent").
WITNESSETH THAT: In consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
SECTION 1.1. Creation of Trust. Upon the execution of this
Agreement by the parties hereto, there is hereby created the NationsCredit
Grantor Trust 1997-l.
ARTICLE II
SECTION 2.1. Conveyance of Depositor Receivables and NCMF
Receivables. (a) In consideration of the Trustee's delivery, on behalf of the
Trust, to or upon the order of the Depositor of Certificates (the
"Certificates") in an aggregate principal amount equal to $181,781,125.63 (the
"Purchase Price"), the Depositor does hereby sell, transfer, assign and
otherwise convey to the Trustee, in trust for the benefit of the
Certificateholders and the Surety Bond Issuer, without recourse:
(i) all right, title and interest of the Depositor in and to
the Depositor Receivables and all payments received thereunder, in the
case of Simple Interest Receivables which are Depositor Receivables and
due thereunder in the case of Precomputed Receivables which are
Depositor Receivables, in each case, after the Cutoff Date;
(ii) the interest of the Depositor in the security interests
in the Boats related to Depositor Receivables granted by Obligors
pursuant to the Depositor Receivables;
(iii) the Purchase Agreement, including the right of the
Depositor to cause NationsCredit Commercial to repurchase Depositor
Receivables from the Depositor under certain circumstances;
(iv) the interest of the Depositor in any proceeds from claims
on any physical damage, credit life or disability insurance policies
covering Boats or Obligors related to Depositor Receivables;
(v) the interest of the Depositor in any proceeds from
recourse to Dealers on Depositor Receivables; and
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<PAGE> 7
(vi) any proceeds of the foregoing.
The Depositor intends that the assignment and transfer herein
contemplated constitute a sale of the Depositor Receivables, conveying good
title thereto free and clear of any liens and encumbrances, from the Depositor
to the Trustee and that such property not be part of the Depositor's estate or
property of the Depositor in the event of any insolvency by the Depositor and
the Trustee acquiesces in such characterization. In the event that such
conveyance is deemed to be, or to be made as security for, a loan, the Depositor
hereby grants to the Trustee a first priority perfected security interest in all
of the Depositor's right, title and interest in and to the Receivables and the
other property conveyed hereby, and this Agreement shall constitute a security
agreement under applicable law.
(b) As additional consideration for the payment of the Purchase
Price, the Depositor shall (i) pay on behalf of the Trust to NationsCredit
Marine the Purchase Price (as defined in the Assignment) in immediately
available funds and (ii) cause NationsCredit Marine, pursuant to the Assignment,
on the date hereof to sell, transfer, assign and otherwise convey to the
Trustee, in trust for the benefit of the Certificateholders and the Surety Bond
Issuer, without recourse:
(i) all right, title and interest of NationsCredit Marine in
and to the NCMF Receivables and all payments received thereunder, in
the case of Simple Interest Receivables which are NCMF Receivables and
due thereunder in the case of Precomputed Receivables which are NCMF
Receivables, in each case, after the Cutoff Date,
(ii) the interest of NationsCredit Marine in the security
interests in the Boats related to NCMF Receivables granted by Obligors
pursuant to the NCMF Receivables,
(iii) the right of NationsCredit Marine pursuant to Section
1.7 of the Purchase and Sale Agreement to cause NationsCredit
Commercial to repurchase NCMF Receivables from NationsCredit Marine for
breaches of the representations and warranties contained in paragraphs
(h) or (i) of Exhibit III to the Purchase and Sale Agreement; provided
that paragraph (i) shall be limited to paragraphs (iii), (vi), (xiii)
and (xxiii) of the definition of Eligible Receivable (as such term is
defined in the Purchase and Sale Agreement)),
(iv) any interest of NationsCredit Marine in any proceeds from
claims on any physical damage, credit life or disability insurance
policies covering Boats related to NCMF Receivables or Obligors related
to NCMF Receivables,
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<PAGE> 8
(v) any interest of NationsCredit Marine in any proceeds from
recourse to Dealers on NCMF Receivables, and
(vi) any proceeds of the foregoing.
The payment of the Purchase Price (as defined in the Assignment) by the
Depositor as set forth in Section 2.1 (b) shall be at the direction of the
Trustee on behalf of the Trust.
SECTION 2.2 The Trustee agrees to hold any amounts received in
respect of the Receivables and allocable to late payment and extension fees,
administrative charges in trust for the benefit of the Depositor and agrees to
promptly remit any such amounts to the Depositor upon receipt thereof as
directed in writing in the relevant Servicer's Certificate.
ARTICLE III
SECTION 3.1. Surety Bond. The Servicer shall, simultaneously
with the execution and delivery of this Agreement, obtain the Surety Bond for
the benefit of the Trust in accordance with the respective terms thereof and
deliver it to the Trustee.
ARTICLE IV
SECTION 4.1. Acceptance by Trustee. The Trustee does hereby accept all
consideration conveyed by the Depositor pursuant to Section 2.1 and by
NationsCredit Marine pursuant to the Assignment, and declares that the Trustee
shall hold such consideration and the Surety Bond and any proceeds of any draws
thereunder upon the trusts herein set forth for the benefit of all present and
future Certificateholders, subject to the terms and provisions of this
Agreement.
ARTICLE V
SECTION 5.1. Incorporation of Standard Terms and Conditions of
Agreement. This Agreement does hereby incorporate by reference the Standard
Terms and Conditions of Agreement for the NationsCredit Grantor Trust dated as
of April 30, 1997 (the "Standard Terms and Conditions of Agreement"), in the
form attached hereto.
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<PAGE> 9
ARTICLE VI
SECTION 6.1. Special Definitions and Terms. Whenever used in the
Standard Terms and Conditions of Agreement and in this Agreement, the following
words and phrases shall have the following meanings:
"Avoided Payment" shall have the meaning set forth in Section
14A.2 of the Standard Terms and Conditions.
The "Assignment" is the Assignment Agreement dated as of April
30, 1997 between NationsCredit Marine and the Trustee, substantially in the form
of Exhibit G.
The "Corporate Trust Office" at the date of the execution hereof
is located at: Bankers Trust Company, Four Albany Street, 10th Floor, New York,
New York 10006, Attn: Corporate Trust and Agency Group.
The "Cutoff Date" shall be the close of business on April 30,
1997.
The first "Distribution Date" shall be June 16, 1997.
"Final Order" shall have the meaning set forth in Section 14A.2
of the Standard Terms and Conditions.
"Final Scheduled Distribution Date" means August 15, 2013.
"Insolvency Proceeding" means the commencement, after the
Closing Date, of any bankruptcy, insolvency, readjustment of debt,
reorganization, marshalling of assets and liabilities or similar proceedings by
or against any person, or the commencement, after the Closing Date, of any
proceedings by or against any Person for the winding up or liquidation of its
affairs, or the consent after the date hereof to the appointment of a trustee,
conservator, receiver or liquidator in any bankruptcy, insolvency, readjustment
of debt, reorganization, marshalling of assets and liabilities or similar
proceedings of or relating to any Person.
"Notice for Payment" shall have the meaning set forth in the
Surety Bond.
The "Optional Purchase Percentage" shall be 5%.
The "Original Certificate Balance" is $181,781,125.63.
The "Original Pool Balance" is $181,781,125.63.
The "Pass-Through Rate" is 6.75% per annum.
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<PAGE> 10
The "Permitted Investments" shall be, at anytime, any one or
more of the obligations and securities set forth in Schedule C hereto.
The "Purchase Price" has the meaning set forth in Section
2.1(a).
The "Reimbursement Agreement" is the Insurance and Reimbursement
Agreement dated as of April 30, 1997, among the Surety Bond Issuer, the
Depositor and the Servicer.
The "Required Deposit Rating" shall be a rating on short-term
deposits of "Prime-l" by Moody's and "A-1" by S & P or any other rating
acceptable to each of the Rating Agencies; and any requirement that deposits
have the "Required Deposit Rating" shall mean that such deposits have the
foregoing ratings from each of such rating agencies or such other rating which
is acceptable to the Rating Agencies.
The "Reserve Account" means the account designated as such,
established and maintained pursuant to Section 14.1(b) of the Standard Terms and
Conditions of Agreement.
The "Servicing Fee Rate" shall be .75% per annum.
The "Surety Bond" means the unconditional, irrevocable surety
bond, substantially in the form attached hereto as Exhibit A, to be issued by
the Surety Bond Issuer and naming the Trustee as beneficiary.
The "Surety Bond Issuer" shall be Capital Markets Assurance
Corporation.
"Trigger Event" has the meaning set forth in Section 10.1(a).
ARTICLE VII
SECTION 7.1. Additional Representations and Warranties of the
Depositor. The Depositor does hereby make the following representations and
warranties on which the Trustee, on behalf of the Trust, relies in accepting the
Depositor Receivables in trust and executing and authenticating the
Certificates:
(i) Original Maturity of Depositor Receivables. Each Depositor
Receivable shall have an original maturity of not more than 180 months.
(ii) Remaining Maturity of Depositor Receivables. As of the
Cutoff Date, each Depositor Receivable shall have a remaining maturity
of not more than 180 months.
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<PAGE> 11
(iii) Annual Percentage Rate. Each Depositor Receivable shall
have a fixed Annual Percentage Rate of not less than 8.246% and not
greater than 21.902%.
(iv) Location of Receivable Files. The Depositor Receivable
Files shall be kept at the offices of NationsCredit Commercial
Corporation at 1000 Holcomb Woods Parkway, Roswell, Georgia 30076 and at
2260 Douglas Boulevard, Suite 100, Roseville, California 95061.
(v) Maximum Balance. No Depositor Receivable has a Principal
Balance greater than $50,000.
(vi) No Repossessions. As of the Cutoff Date, no Boat securing
any Depositor Receivable is in repossession status.
(vii) No Bankruptcies. As of the Cutoff Date, no Obligor on a
Depositor Receivable was noted in the related Receivable File as the
subject of any bankruptcy proceeding.
(viii) Delinquencies. As of the Cutoff Date, no Depositor
Receivable shall have a payment that is 60 or more days delinquent.
The foregoing representations and warranties shall (i) speak as of the Closing
Date, but shall survive the sale, transfer and assignment of the Depositor
Receivables to the Trustee, on behalf of the Trust and (ii) be subject to the
notice and repurchase provisions set forth in Section 12.2 of the Standard Terms
and Conditions of Agreement in the same manner and to the same extent as if they
were set forth in Section 12.1 thereof.
ARTICLE VIII
SECTION 8.1. NationsCredit Commercial Not to Resign as Servicer.
Except as a result of the operation of Section 17.3 of the Standard Terms and
Conditions of Agreement, NationsCredit Commercial shall not resign from the
obligations and duties hereby imposed on it as Servicer under this Agreement
except upon determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law. Notice of any
such determination permitting the resignation of NationsCredit Commercial shall
be communicated to the Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee concurrently with or promptly
after such notice. No such resignation shall become effective until the Trustee
or a successor Servicer shall have assumed the responsibilities and obligations
of NationsCredit Commercial in accordance with Section 18.2 of the Standard
Terms and Conditions of Agreement.
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<PAGE> 12
ARTICLE IX
SECTION 9.1. Agents for Service. The agent for service for the
Depositor shall be John B. Stockton, NationsCredit Management Corporation, 1
Canterbury Green, 201 Broad Street, Stamford, Connecticut 06901.
ARTICLE X
SECTION 10.1 Trigger Events. (a) The occurrence of any of the
following events shall constitute a Trigger Event hereunder:
(i) NationsBank Corporation or its successor and NationsCredit
Corporation or its successor ceases to maintain a direct or indirect
majority common shareholder ownership of NationsCredit Commercial or any
successor to NationsCredit Commercial pursuant to Section 17.3; or
(ii) Both NationsBank Corporation or its successor and
NationsCredit Corporation or its successor shall fail to maintain a
long-term debt rating by S&P and Moody's of at least BBB or Baa2,
respectively.
(b) Upon the occurrence of a Trigger Event, the Surety Bond
Issuer may direct the Trustee, at the expense of the Depositor, however should
the Depositor fail to cover such expense, from funds on deposit in the Reserve
Account, to reperfect the security interests in the Boats underlying the
Receivables, of Obligors with billing addresses in California, in the name of
the Trust; provided, that, the Surety Bond Issuer shall not unreasonably
exercise its rights under this Subsection 10.01(b).
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<PAGE> 13
IN WITNESS WHEREOF, the Depositor, the Servicer, the Trustee and
the Collateral Agent have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.
NATIONSCREDIT SECURITIZATION
CORPORATION, as Depositor
By: /s/ Lawrence Angelilli
---------------------------------
Name: Lawrence Angelilli
Title: Vice President
NATIONSCREDIT COMMERCIAL
CORPORATION OF AMERICA, as Servicer
By: /s/ Lawrence Angelilli
---------------------------------
Name: Lawrence Angelilli
Title: Vice President and Treasurer
BANKERS TRUST COMPANY, as Trustee
and as Collateral Agent
By: /s/ Lillian Peros
---------------------------------
Name: Lillian Peros
Title: Assistant Vice President
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<PAGE> 14
SCHEDULE A
Schedule of Depositor Receivables
(Delivered on[NationsCredit to fill in])
A-1
<PAGE> 15
SCHEDULE B
Schedule of NCMF Receivables
(Delivered on [NationsCredit to fill in])
B-1
<PAGE> 16
SCHEDULE C
Schedule of Permitted Investments
"Permitted Investments" are any of the following, which shall
mature on or prior to the next succeeding Deposit Date:
(i) any direct obligations of, and obligations fully guaranteed
by, the United States of America, the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association, or any agency or
instrumentality of the United States of America the obligations of which
are backed by the full faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by, or Federal funds sold by any
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 and/or state authorities or under
the laws of any other jurisdiction, 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 have the highest credit rating available
from each Rating Agency or (B) any other demand or time deposit or
certificate of deposit which is fully insured by the Federal Deposit
Insurance Corporation;
(iii) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii) (A) above
or with any money market funds maintained by a broker which has, at the
time of such investment, the highest credit rating from each Rating
Agency;
(iv) commercial paper having a rating of at least "A-1" by S&P
and "Prime-l" by Moody's at the time of such investment, including
commercial paper having such rating issued by the Trustee, NationsBank
Corporation or NationsCredit Corporation;
(v) money market funds or money market mutual funds (other than
closed-end funds), including funds for which Bankers Trust Company is
investment manager or advisor, which (A) maintain a constant net asset
value and (B) have at the time of such investment a rating by AAAm or
AAAmg by S&P or Aaa by Moody's;
(vi) if the Trustee does not receive written investment
instructions, the investments referred to in (v) above; or
(vii) any other investment approved in writing by each Rating
Agency.
C-1
<PAGE> 17
NATIONSCREDIT SECURITIZATION CORPORATION,
Depositor,
and
NATIONSCREDIT COMMERCIAL CORPORATION OF AMERICA,
Servicer.
STANDARD TERMS AND CONDITIONS OF AGREEMENT
Dated as of April 30, 1997
$181,781,125.63
NationsCredit Grantor Trust 1997-1
6.75% Marine Receivable--Backed Certificates
<PAGE> 18
NATIONSCREDIT GRANTOR TRUST 1997-1
STANDARD TERMS AND CONDITIONS OF AGREEMENT
DATED AS OF APRIL 30, 1997
INTRODUCTION
These Standard Terms and Conditions of Agreement shall be
applicable to NationsCredit Grantor Trust 1997-1 formed on the date hereof, with
respect to which a Pooling and Servicing Agreement incorporating by reference
these Standard Terms and Conditions of Agreement shall have been executed.
ARTICLE XI
Definitions
SECTION 11.1. Definitions. Whenever used in the Agreement
(including these Standard Terms and Conditions of Agreement) the following words
and phrases, unless the context otherwise requires, shall have the following
meanings:
"Account Property" means all amounts and investments held from
time to time in the Reserve Account, as the case may be (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities, securities entitlements, investment property or otherwise), and all
proceeds of the foregoing.
"Agreement" means the Pooling and Servicing Agreement executed
by the Depositor, the Servicer, the Trustee and the Collateral Agent as of the
Cutoff Date, into which these Standard Terms and Conditions of Agreement shall
be incorporated by reference, and all amendments and supplements thereto.
"Amount Financed" with respect to a Receivable means the
original amount advanced under the Receivable toward the purchase price of the
Boat and any cost to the related Obligor of any dealer installed options,
extended warranty plans and credit life and disability insurance, including any
amount allocable to the premium of collateral protection insurance purchased by
NationsCredit Commercial prior to the Cutoff Date.
"Annual Percentage Rate" or "APR" of a Receivable means the
annual rate of finance charges stated in the Receivable.
"Available Funds" means, for any Distribution Date, the sum of
(i) all Collections received by the Servicer during the related Collection
Period, (ii) all refunds received by the Servicer with respect to any refunded
portion of extended warranty protection plan costs, or of physical damage,
credit life or disability insurance premiums included in the Amount Financed
unless such refund must be paid to the Obligor, (iii) the Purchase Amount of all
Receivables purchased or repurchased under the Agreement on the Business Day
prior to the Distribution
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<PAGE> 19
Date, (iv) Liquidation Proceeds received by the Servicer during the related
Collection Period and (v) all net income and gain realized on funds deposited
into the Collection Account or the Certificate Account and invested in Permitted
Investments during the related Collection Period.
"Boat" means (i) a new or used boat, or boat motor and boat
trailer, securing an Obligor's indebtedness under the respective Receivable.
"Book-Entry Certificates" shall mean beneficial interests in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 15.8.
"Business Day" means any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the City of New York, New
York shall be authorized or obligated by law or executive order to be closed.
"Carry-Over Monthly Interest" means, for any Distribution Date,
the aggregate Monthly Interest Payments for prior Distribution Dates which have
not been paid, after giving effect to any payment of the Reserve Account
Withdrawal Amount or any Surety Drawing Amount on such Distribution Date made
pursuant to Section 14.5(a)(ii) and (iii), respectively.
"Carry-Over Monthly Principal" means, for any Distribution Date,
the aggregate Monthly Principal Payments for prior Distribution Dates which have
not been paid, after giving effect to any payment of the Reserve Account
Withdrawal Amount or any Surety Drawing Amount on such Distribution Date made
pursuant to Section 14.5(a)(ii) and (iii), respectively.
"Carry-Over Servicing Fee" means, for any Distribution Date, the
aggregate Servicing Fees for prior Distribution Dates which have not been paid
after giving effect to any Reserve Account Interest Withdrawal or any Surety
Interest Drawing made on such Distribution Date pursuant to Section 14.5(a)(ii)
and (iii), respectively.
"Certificate" means a certificate executed by the Trust and
authenticated by the Trustee substantially in the form of Exhibit B hereto.
"Certificate Account" means the account designated as such,
established and maintained pursuant to Section 14.1(a).
"Certificate Balance" means, as of any date of determination,
the Original Certificate Balance, as specified in the Agreement, reduced by all
principal distributions on the Certificates.
"Certificate Factor" means, as of the close of business on a
Distribution Date, a seven-digit decimal figure equal to the Certificate Balance
as of such Distribution Date divided by the Original Certificate Balance.
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<PAGE> 20
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency).
"Certificate Register" and "Certificate Registrar" mean the
register maintained and the registrar appointed pursuant to Section 15.3.
"Certificateholder" or "Holder" means the Person in whose name
the respective Certificate shall be registered in the Certificate Register,
except that, solely for the purposes of giving any consent, waiver, request or
demand pursuant to the Agreement, the interest evidenced by any Certificate
registered in the name of the Depositor or the Servicer, or any Person
controlling, controlled by, or under common control with the Depositor or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request or demand shall
have been obtained.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Collateral Agent" means the Person acting as Collateral Agent
under this Agreement, its successor in interest, and any successor Collateral
Agent appointed pursuant to Section 19.10.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 14.1(a).
"Collection Period" means each calendar month.
"Collections" shall mean, with respect to a Collection Period,
all payments by or on behalf of the Obligors made during such Collection Period
other than Liquidation Proceeds on the Receivables (other than a Purchased
Receivable).
"Corporate Trust Office" means the office of the Trustee at
which its corporate trust business shall be administered, which office at the
date of the Agreement is 4 Albany Street, New York, New York 10006.
"Cutoff Date" means the date specified as such in Section 6.1
of the Agreement.
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<PAGE> 21
"Dealer" means the dealer who sold a Boat, and who originated
and assigned the respective Receivable to NationsCredit Commercial under an
existing agreement between such dealer and NationsCredit Commercial.
"Defaulted Receivable" means a Receivable as to which either (x)
the Servicer has determined, in accordance with its customary servicing
procedures, that eventual payment in full is unlikely or (y) (1) 90 or more days
have elapsed since the related Boat has been repossessed by the Servicer, in the
case of any Receivable with a Principal Balance of $10,000 or less as of the day
such Boat was repossessed by the Servicer or (2) 180 or more days have elapsed
since the related Boat has been repossessed by the Servicer, in the case of any
Receivable with a Principal Balance of greater than $10,000 as of the day such
Boat was repossessed by the Servicer.
"Definitive Certificates" means the Certificates specified in
Section 15.8.
"Delivery" or "Deliver" when used with respect to Account
Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the Relevant
UCC and are susceptible to physical delivery, transfer thereof to the
Trustee or its nominee, agent or custodian by physical delivery to the
Trustee or its nominee, agent or custodian endorsed to, or registered in
the name of, the Trustee, as trustee for the benefit of the
Certificateholders, or its nominee, agent or custodian or endorsed in
blank, and, with respect to a certificated security (as defined in
Section 8-102 of the Relevant UCC) transfer thereof (i) by delivery of
such certificated security endorsed to, or registered in the name of,
the Trustee, as trustee for the benefit of the Certificateholders, or
its nominee, agent or custodian or endorsed in blank to a financial
intermediary (as defined in Section 8-313 of the Relevant UCC) and the
making by such financial intermediary of entries on its books and
records identifying such certificated securities as belonging to the
Trustee, as trustee for the benefit of the Certificateholders, or its
nominee, agent or custodian and the sending by such financial
intermediary of a confirmation of the purchase of such certificated
security by the Trustee or its nominee, agent or custodian, or (ii) by
delivery thereof to a "clearing corporation" (as defined in Section
8-102(3) of the Relevant UCC) and the making by such clearing
corporation of appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the appropriate
securities account of a financial intermediary by the amount of such
certificated security, the identification by the clearing corporation of
the certificated securities for the sole and exclusive account of the
financial intermediary, the maintenance of such certificated securities
by such clearing corporation or a "custodian bank" (as defined in
Section 8102(4) of the Relevant UCC) or the nominee of either subject to
the clearing corporation's exclusive control, the sending of a
confirmation by the financial intermediary of the
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<PAGE> 22
purchase by the Trustee, as trustee for the benefit of the
Certificateholders, or its nominee, agent or custodian of such
securities and the making by such financial intermediary of entries on
its books and records identifying such certificated securities as
belonging to the Trustee, as trustee for the benefit of the
Certificateholders, as applicable, or its respective nominee, agent or
custodian (all of the foregoing, "Physical Property"), and, in any
event, any such Physical Property in registered form shall be in the
name of the Trustee, as trustee for the benefit of the
Certificateholders, or its nominee, agent or custodian; and such
additional or alternative procedures as may hereafter become appropriate
to effect the complete transfer of ownership of any such Account
Property (as defined herein) to the Trustee, as trustee for the benefit
of the Certificateholders, or its nominee, agent or custodian,
consistent with changes in applicable law or regulations or the
interpretation thereof;
(b) with respect to any securities issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or by the Federal National
Mortgage Association that is a book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations, the
following procedures, all in accordance with applicable law, including
applicable federal regulations and Articles 8 and 9 of the Relevant UCC:
book-entry registration of such Account Property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a financial
intermediary which is also a "depository" pursuant to applicable federal
regulations and issuance by such financial intermediary of a deposit
advice or other written confirmation of such book-entry registration to
the Trustee or its nominee, agent or custodian of the purchase by the
Trustee, as trustee for the benefit of the Certificateholders, or its
nominee or custodian of such book-entry securities; the making by such
financial intermediary of entries in its books and records identifying
such book-entry security held through the Federal Reserve System
pursuant to federal book-entry regulations as belonging to the Trustee,
as trustee for the benefit of the Certificateholders, or its nominee,
agent or custodian and indicating that such custodian holds such Account
Property solely as agent for the Trustee, as trustee for the benefit of
the Certificateholders, or its nominee, agent or custodian; and such
additional or alternative procedures as may hereafter become appropriate
to effect complete transfer of ownership of any such Account Property to
the Trustee or its nominee, agent or custodian, consistent with changes
in applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Account Property that is an
uncertificated security under Article 8 of the Relevant UCC and that is
not governed by clause (b) above, registration on the books and records
of the issuer thereof in the name of the financial intermediary, the
sending of a confirmation by the financial intermediary of the purchase
by the Trustee, as trustee for the benefit
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<PAGE> 23
of the Certificateholders, or its nominee, agent or custodian of such
uncertificated security, and the making by such financial intermediary
of entries on its books and records identifying such uncertificated
certificates as belonging to the Trustee, as trustee for the benefit of
the Certificateholders, or its nominee, agent or custodian.
"Deposit Date" means the Business Day preceding each
Distribution Date.
"Depositor" means NationsCredit Securitization Corporation, a
corporation organized under the laws of the State of Delaware, as the depositor
of the Depositor Receivables under the Agreement, and each successor to
NationsCredit Securitization Corporation (in the same capacity) pursuant to
Section 16.3.
"Depositor Receivables" means the marine retail installment
sales contracts listed on Schedule A.
"Depositor Receivables Files" means the documents specified in
Section 12.3 that relate to Depositor Receivables.
"Depository Agreement" means the agreement among the Depositor,
the Trustee and the initial Clearing Agency, dated May 22, 1997, substantially
in the form attached hereto as Exhibit C.
"Determination Date" means the earlier of the eighth Business
Day or the eleventh calendar day of each month.
"Distribution Date" means, for each Collection Period, the 15th
of the following month, or if the 15th is not a Business Day, the next following
Business Day, commencing with the date specified in the Agreement.
"Event of Default" means an event specified in Section 18.1.
"Lien" means a security interest, lien, charge, pledge, equity
or encumbrance of any kind other than tax liens, mechanics' liens and any liens
which attach to the respective Receivable by operation of law.
"Liquidation Proceeds" means, with respect to any Collection
Period, the monies (including recoveries) collected from whatever source, during
such Collection Period on a Defaulted Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor plus any amounts
required by law to be remitted to the Obligor.
"Monthly Interest Payment" means, as of any Distribution Date,
one-twelfth of the product of the Pass-Through Rate and the Certificate Balance
as of the close of business on
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<PAGE> 24
the prior Distribution Date or, in the case of the first Distribution Date, the
Certificate Balance as of the Closing Date.
"Monthly Principal Payment" means, (x) as of any Distribution
Date (except for the Final Scheduled Distribution Date), an amount equal to the
sum of (i) that portion of all collections received by the Servicer during the
related Collection Period on Receivables allocable to principal (which shall not
include the principal portion of proceeds from any recoveries or liquidations in
respect of any Defaulted Receivable in any Collection Period following the
Collection Period in which such Receivable became a Defaulted Receivable), (ii)
Purchase Amounts allocable to principal and paid by the Depositor to the
Servicer or by the Servicer and (iii) the Principal Balance of Defaulted
Receivables, which became Defaulted Receivables during the related Collection
Period and (y) as of the Final Scheduled Distribution Date, after giving effect
to the distribution of the amounts set forth in (i) through (iii) of clause (x),
an amount necessary to reduce the Certificate Balance to zero on such
Distribution Date.
"Moody's" means Moody's Investors Service, Inc.
"NationsCredit Commercial" means NationsCredit Commercial
Corporation of America, a corporation organized under the laws of North
Carolina, or its successors.
"NationsCredit Marine" means NationsCredit Marine Funding
Corporation, a Delaware corporation.
"NCMF Receivable Files" means the documents specified in Section
12.3 that relate to NCMF Receivables.
"NCMF Receivables" means the marine retail installment sales
contracts listed on Schedule B.
"Net Credit Loss Ratio" means, for any Collection Period, an
amount expressed as an annualized percentage equal to (i) the aggregate gross
losses with respect to the Receivables recognized in such Collection Period, as
determined in accordance with the Servicer's normal practices, less any
recoveries received during such Collection Period, divided by (ii) the average
of the Pool Balances as of the last day of the prior Collection Period and as of
the last day of such Collection Period.
"Obligor" on a Receivable means the purchaser or the
co-purchasers of the Boat or any other Person who owes payments under the
Receivable.
"Officer's Certificate" means a certificate signed by the
chairman of the board, the president, any vice chairman of the board, any vice
president, the treasurer, any assistant treasurer or the controller of the
Depositor, the Servicer or the Surety Bond Issuer, as appropriate.
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<PAGE> 25
"Opinion of Counsel" means a written opinion of counsel who may
but need not be counsel to the Depositor or Servicer, which opinion shall be
acceptable to the Trustee, and provided that any opinion relating to the tax
status of the Trust shall be rendered by Stroock & Stroock & Lavan LLP or such
other independent outside counsel acceptable to the Trustee.
"Optional Purchase Percentage" means the percentage specified as
such in the Agreement.
"Original Certificate Balance" means the Certificate Balance as
of the Closing Date, as specified in the Agreement.
"Original Pool Balance" means the Pool Balance as of the Cutoff
Date, as specified in the Agreement.
"Pass-Through Rate" means the interest rate payable to
Certificateholders, as specified in the Agreement.
"Permitted Investments" means those investments specified in
Schedule C of the Agreement.
"Person" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization, or government or any agency or political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means as the last day of any Collection Period,
the aggregate Principal Balance of the Receivables. For purposes of this
definition only the Principal Balance of a Defaulted Receivable shall equal
zero.
"Precomputed Receivable" means any Receivable under which the
portion of a payment allocable to earned interest (which may be referred to in
the Receivable as an add-on finance charge) and the portion allocable to the
Amount Financed is determined according to the sum of periodic balances or the
sum of monthly balances or any equivalent method or are monthly actuarial
receivables.
"Principal Balance" of a Receivable, as of the last day of a
Collection Period, means the Amount Financed minus the sum of (a) that portion
of all Collections received on or prior to such day by the Servicer allocable as
a payment of principal pursuant to Section 14.3 hereof, (b) any refunded portion
of extended warranty protection plan costs, or of physical damage, credit life
or disability insurance premiums included in the Amount Financed which is
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<PAGE> 26
applied during the related Collection Period unless such refund must be paid to
the Obligor, and (c) the principal portion of all Purchase Amounts paid by the
Depositor or the Servicer, in respect of such Receivable, after the preceding
Distribution Date but prior to the related Distribution Date.
"Purchase Agreement" means the Purchase Agreement executed by
the Depositor and NationsCredit Commercial as of the Cutoff Date.
"Purchase Amount" means the amount, as of the last day of a
Collection Period, required to prepay in full the Principal Balance of a
Receivable plus accrued interest thereon at one-twelfth the sum of the
Pass-Through Rate plus the Servicing Fee Rate to the last day of the month of
purchase.
The "Purchase and Sale Agreement" means the Purchase and Sale
Agreement, dated December 18, 1996 between NationsCredit Commercial and
NationsCredit Marine.
"Purchased Receivable" means a Receivable purchased as of the
last day of a Collection Period by the Servicer pursuant to Section 13.7 or 20.2
or by the Depositor pursuant to Section 12.2.
"Rating Agency" means S&P, Moody's or any other nationally
recognized rating agency initially contracted by the Depositor to rate the
Certificates.
"RCC" means Receivables Capital Corporation, a Delaware
corporation.
"Receivables" means the Depositor Receivables and the NCMF
Receivables.
"Receivables Files" means the Depositor Receivable Files and the
NCMF Receivable Files.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of December 18, 1996 among NationsCredit Marine, RCC,
NationsCredit Commercial and Bank of America National Trust and Savings
Association, as Administrator.
"Record Date" means for any Distribution Date the close of
business on the Business Day prior to such Distribution Date.
"Reimbursement Agreement" means the agreement relating to the
Surety Bond, which agreement is further defined in Section 6.1 of the Agreement.
"Required Deposit Rating" means the rating specified in Section
6.1 of the Agreement.
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"Reserve Account Initial Deposit" shall equal $5,453,433.77.
"Reserve Account Withdrawal Amount" shall have the meaning in
Section 14.5(a)(ii).
"Residual Certificate" means the Certificate specified in
Section 15.1.
"Scheduled Payment" on a Receivable means that portion of the
payment required to be made by the Obligor on the related due date during the
respective Collection Period sufficient to amortize at level monthly payments
the Principal Balance and to provide interest at the APR.
"Servicer" means NationsCredit Commercial and each successor to
NationsCredit Commercial (in the same capacity) pursuant to Section 17.3.
"Servicer's Certificate" means a certificate completed and
executed by the Servicer by its chairman of the board, its president, any vice
chairman of the board, any vice president, the treasurer, any assistant
treasurer or the controller of the Servicer pursuant to Section 13.9,
substantially in the form of Exhibit D.
"Servicing Fee" means the fee payable to the Servicer for
services rendered during each Collection Period, determined pursuant to Section
13.8.
"Servicing Standards" means, at any time, the quality of the
Servicer's (or in the event that a subservicer performs servicing operations on
behalf of the Servicer, such subservicer's) performance with respect to (i)
compliance with the terms and conditions of the Agreement, and (ii) adequacy,
measured in accordance with industry standards and current and historical
standards of the Servicer (or such subservicer) in respect of all receivables
serviced by the Servicer (or such subservicer), regardless of whether such
receivables are owned by the Servicer (or such subservicer), of the Servicer's
(or such subservicer's) servicing of the Receivables.
"Ship Mortgage Act" means the Ship Mortgage Act of 1920, as
amended.
"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 number
of days 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.
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"Specified Reserve Account Requirement" with respect to any
Distribution Date, shall equal the greater of (i) $3,635,622.51, or (ii) 4% of
the Pool Balance as of the last day of the related Collection Period. The
Specified Reserve Account Requirement may be reduced without the consent of the
Certificateholders to a lesser amount, including to zero, as determined by the
Depositor; provided that such reduction is consented to in writing by the Surety
Bond Issuer and does not adversely affect the rating of the Certificates
assigned by any Rating Agency. Upon the occurrence and continuance of the event
specified in Section 18.1(b)(iv), the Specified Reserve Account Requirement
shall equal the sum of the Certificate Balance, accrued interest thereon and the
Servicing Fee payable pursuant to Section 14.5 (b) (ii) and all amounts
available under Section 14.5(b)(vi) shall be deposited in the Reserve Account up
to such amount.
"S&P" means Standard & Poor's Ratings Services, a Division of
The McGraw-Hill Companies.
"State" means any state of the United States of America or the
District of Columbia.
"Statement to Certificateholders" means a certificate completed
and executed by the Servicer by its the chairman of the board, its president,
any vice chairman of the board, any vice president, the treasurer, any assistant
treasurer or the controller of the Servicer pursuant to Section 14.7,
substantially in the form of Exhibit E.
"Surety Bond" means the unconditional, irrevocable surety bond
designated as such in the Agreement.
"Surety Bond Issuer" means the Person specified as such in
Section 6.1 of the Agreement.
"Surety Bond Issuer Default" means the failure of the Surety
Bond Issuer to make a payment required under the Surety Bond in accordance with
its terms.
"Surety Drawing Amount" shall have the meaning set forth in
Section 14.5(a)(iii).
"Trust" means the trust created by the Agreement, the estate of
which shall consist of (i) the Receivables (other than Purchased Receivables),
and all payments received in the case of Simple Interest Receivables and all
payments due thereunder, in the case of Precomputed Receivables, in each case,
after the Cutoff Date; (ii) funds deposited into the Collection Account or the
Certificate Account; (iii) any interest of the Depositor or NationsCredit Marine
in the security interests in the Boats granted by the Obligors; (iv) the Surety
Bond; (v) the Purchase Agreement; (vi) the right of NationsCredit Marine
pursuant to the Purchase and Sale Agreement to cause NationsCredit Commercial to
repurchase NationsCredit Marine Receivables as a result of a breach of
representations and warranties contained in paragraph (h) or (i) of Exhibit III
of the Purchase and Sale Agreement; provided that paragraph (i) shall be limited
to paragraphs (iii),
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(iv), (xiii) and (xxiii) of the definition of "Eligible Receivables" (as such
term is defined in the Purchase and Sale Agreement); (vii) any interest of the
Depositor or NationsCredit Marine in any proceeds from claims on physical
damage, credit life or disability insurance policies covering the Boats or the
Obligors, as the case may be; (viii) any property (including the right to
receive future Liquidation Proceeds) that shall have secured a Receivable and
that shall have been acquired by or on the behalf of the Trustee; and (ix) the
proceeds of all of the foregoing.
"Trustee" means the Person acting as Trustee under the
Agreement, its successor in interest, and any successor trustee pursuant to
Section 19.11.
"Trustee Officer" means any officer assigned to the Corporate
Trust Office, including any managing director, vice president, any assistant
vice president, any assistant secretary, any assistant treasurer, any trust
officer or any other officer of the Corporate Trust Office of the Trustee
customarily performing functions similar to those performed by persons who at
the time shall be such officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Trustee's Certificate" means a certificate completed and
executed by the Trustee by a Trustee Officer pursuant to Section 19.2,
substantially in the form of, in the case of an assignment to the Depositor,
Exhibit F-1, and in the case of an assignment to the Servicer, Exhibit F-2.
"UCC" means the Uniform Commercial Code as in effect in the
respective jurisdiction.
"Unsold Contract" means any retail installment contract serviced
by NationsCredit Commercial other than the Receivables.
SECTION 11.2. Usage of Terms. With respect to all terms in the
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by the Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
SECTION 11.3. Cutoff Date and Record Date. All references to the
Record Date prior to the first Record Date in the life of the Trust
shall be to the Cutoff Date.
SECTION 11.4. Section References. All section references shall
be to Sections in these Standard Terms and Conditions of Agreement.
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ARTICLE XII
The Receivables
SECTION 12.1. Representations and Warranties of Depositor. The
Depositor makes the following representations and warranties as to the Depositor
Receivables on which the Trustee relies in accepting the Depositor Receivables
in trust and executing and authenticating the Certificates. Such representations
and warranties speak as of the Closing Date, but shall survive the sale,
transfer and assignment of the Depositor Receivables to the Trustee.
(i) Characteristics of Depositor Receivables. Each Depositor
Receivable (a) shall have been originated in the United States by a
Dealer for the retail sale of a Boat in the ordinary course of such
Dealer's business, shall have been fully and properly executed by the
parties thereto, shall be denominated in U.S. dollars, (b) shall have
created or shall create a valid, subsisting and enforceable first
priority perfected security interest in favor of NationsCredit
Commercial in the related Boat (other than in the case of boat motors
subject to certificate of title statutes that provide for perfection of
the security interests in such boat motors by the filing of a UCC-1
financing statement), which security interest has been assigned to the
Depositor and shall be validly assignable by the Depositor to the
Trustee, (c) shall contain customary and enforceable provisions such
that the rights and remedies of the holder thereof shall be adequate for
realization against the collateral of the benefits of the security, (d)
shall provide for level monthly payments (provided that the payment in
the first or last month in the life of the Receivable may be minimally
different from the level payment) that fully amortize the Amount
Financed by maturity and yield interest at the Annual Percentage Rate,
and (e) shall provide for, in the event that such contract is prepaid, a
prepayment that fully pays the Principal Balance and includes accrued
but unpaid interest due through the date of prepayment in an amount at
least equal to the Annual Percentage Rate.
(ii) Schedule of Depositor Receivables. The information set
forth in Schedule A to the Agreement shall be true and correct in all
material respects as of the close of business on the Cutoff Date, and no
selection procedures believed to be adverse to the Certificateholders
shall have been utilized in selecting the Depositor Receivables.
(iii) Compliance with Law. Each Depositor Receivable and the
sale of the related Boat shall have complied at the time it was
originated or made, and at the date of issuance of the Certificates
shall comply, in all material respects with all requirements of
applicable Federal, State, and local laws and regulations thereunder,
including, without limitation, usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Federal Trade Commission Act,
the Fair Credit Billing Act, the Fair Credit Reporting Act, the
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Fair Debt Collection Practices Act, the Magnuson-Moss Warranty Act, the
Federal Trade Commission Credit Practices Rule, State unfair and
deceptive trade practice laws, and State adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code, and any other
applicable consumer credit, equal credit opportunity and disclosure
laws.
(iv) Binding Obligation. Each Depositor Receivable shall
represent the genuine, legal, valid and binding payment obligation in
writing of the Obligor, enforceable by the holder thereof in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance and similar laws relating to
creditors' rights generally and subject to general principles of equity.
(v) No Government Obligor. None of the Depositor Receivables
shall be due from the United States of America or any State or local
government or from any agency, department or instrumentality of the
United States of America, any State or local government.
(vi) Depositor Receivables in Force. No Depositor Receivable
shall have been satisfied, subordinated or rescinded, nor shall any Boat
have been released from the security interest granted by the related
Depositor Receivable in whole or in part.
(vii) No Waiver. No provision of a Depositor Receivable shall
have been waived.
(viii) No Defenses. Except for the security interests in favor
of the Depositor and the Trustee, the Depositor Receivables are free and
clear of all security interests, liens, charges, and encumbrances and to
the best knowledge of the Depositor no right of rescission, setoff,
counterclaim or defense shall have been asserted or threatened with
respect to any Depositor Receivable.
(ix) No Liens. No liens or claims shall have been filed for
work, labor or materials relating to a Boat that shall be liens prior
to, or equal to the security interest in the Boat granted by the
Depositor Receivable.
(x) Insurance. The Obligor has obtained physical damage
insurance covering the Boat and the Obligor is required under the terms
of the Depositor Receivable to maintain such insurance.
(xi) Title. It is the intention of the Depositor that the sale
and assignment herein contemplated constitute a sale of the Depositor
Receivables from the Depositor to the Trust and that the beneficial
interest in and title to the
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Depositor Receivables not be part of the debtor's estate in the event of
the filing of a bankruptcy petition by or against the Depositor under
any bankruptcy law. No Depositor Receivable has been sold, transferred,
assigned or pledged by the Depositor to any Person other than the
Trustee. Immediately prior to the sale and assignment herein
contemplated, the Depositor had good and marketable title to each
Depositor Receivable free and clear of all Liens, and, immediately upon
the sale and assignment contemplated hereby, the Trustee for the benefit
of the Certificateholders and the Surety Bond Issuer shall have good and
marketable title to each Depositor Receivable, free and clear of all
Liens, encumbrances, security interests and rights of others; and the
sale and assignment has been perfected under the UCC.
(xiii) Lawful Assignment. No Depositor Receivable shall have
been originated in, or shall be subject to the laws of any jurisdiction
under which the sale, transfer and assignment of such Depositor
Receivable under the Agreement or pursuant to transfers of the
Certificates shall be unlawful, void or voidable.
(xiv) Security Interest. Upon the Depositor Receivables being
conveyed to the Trust pursuant to Section 2.1(a) of the Agreement, the
Trust shall have a perfected security interest under the UCC in the
Depositor Receivables.
(xv) One Original. There shall be in existence one, and only
one, original executed copy of each Depositor Receivable.
(xvi) UCC Characterization. Each Depositor Receivable
constitutes "Chattel Paper" under the UCC.
(xvii) Ship Mortgage Act. No Boat related to any Depositor
Receivable meets the requirements for documentation under the Ship
Mortgage Act.
(xviii) No Default. Except for payment defaults continuing for a
period of less than 60 days as of the Cutoff Date, no default, breach,
violation or event permitting acceleration under the terms of any
Depositor Receivable shall have occurred and neither NationsCredit
Commercial nor the Depositor shall have waived any of the foregoing.
SECTION 12.2. Repurchase Upon Breach. The Depositor or the
Servicer, as the case may be, shall inform the other parties and the Trustee
promptly, in writing, upon the discovery of any breach of the Depositor's
representations and warranties pursuant to Section 12.1. Unless the breach shall
have been cured by the second Record Date following the discovery, the Depositor
shall repurchase any Depositor Receivable, which as a result of such breach
would materially and adversely affect the interests of the Certificateholders or
the Surety Bond Issuer, as of such Record Date (or, at the Depositor's option,
the first Record Date
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following the discovery). In consideration of the purchase of the Depositor
Receivable, the Depositor shall remit the Purchase Amount in the manner
specified in Section 14.4(a) on the Deposit Date. The sole remedy of the
Trustee, the Trust or the Certificateholders with respect to a breach of the
Depositor's representations and warranties pursuant to Section 12.1 shall be to
require the Depositor to repurchase Depositor Receivables pursuant to this
Section 12.2.
SECTION 12.3. Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Trustee, on behalf of the Trust, upon the execution and delivery of the
Agreement, hereby revocably appoints the Servicer, and the Servicer hereby
accepts such appointment, to act as the agent of the Trustee as custodian of the
following documents or instruments which are hereby constructively delivered to
the Trust on behalf of the Trust, with respect to each Receivable:
(i) The original of the Receivable fully executed by the
Obligor.
(ii) The original credit application fully executed by the
Obligor.
(iii) The original certificate of title or such documents that
the Servicer or the Depositor shall keep on file, in accordance with its
customary procedures, evidencing the security interest of NationsCredit
Commercial in the Boat.
(iv) Any and all other documents that the Servicer shall keep on
file, in accordance with its customary procedures, relating to a
Receivable, an Obligor or a Boat.
The Trustee shall have no duty to monitor the performance of the
Servicer and shall have no liability in connection with the Servicer's
performance hereunder.
SECTION 12.4. Duties of Servicer as Custodian. (a) Safekeeping.
The Servicer shall hold the Receivable Files on behalf of the Trust for the use
and benefit of all Certificateholders and the Surety Bond Issuer, and maintain
such accurate and complete accounts, records and computer systems pertaining to
each Receivable File as shall enable the Servicer to comply with these Standard
Terms and Conditions of Agreement. In performing its duties as custodian the
Servicer shall act with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to the receivable files
relating to all comparable receivables that the Servicer services for itself or
others. The Servicer shall conduct, or cause to be conducted, periodic audits of
the Receivable Files held by it under the Agreement, and of the related
accounts, records and computer systems, in such a manner as would enable the
Trustee to verify the accuracy of the Servicer's record keeping. The Servicer
shall promptly report to the Trustee any failure on its part to hold the
Receivable Files and maintain its accounts, records and computer systems as
herein provided and promptly take appropriate action to remedy any such failure.
Nothing herein shall be deemed to require an initial review or any periodic
review by the Trustee of the Receivable Files.
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(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Section 7.1(iv)
of the Agreement, or at such other office as shall be specified to the Trustee
by written notice not later than 90 days after any change in location. The
Servicer shall make available to the Trustee or its duly authorized
representatives, attorneys or auditors a list of locations of the Receivable
Files, and shall also so make available the Receivable Files themselves, and the
related accounts, records and computer systems maintained by the Servicer, at
such times as the Trustee shall reasonably instruct.
(c) Release of Documents. Upon instruction from the Trustee, the
Servicer shall release any Receivable File to the Trustee, the Trustee's agent
or the Trustee's designee, as the case may be, at such place or places as the
Trustee may designate, as soon as practicable.
SECTION 12.5. Instructions; Authority to Act. The Servicer shall
be deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trustee Officer.
SECTION 12.6. Custodian's Indemnification. The Servicer as
custodian shall indemnify the Trustee (which shall include for purposes of this
section it directors, officers, employees and agents) for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred or asserted
against the Trustee as the result of any improper act or omission in any way
relating to the maintenance and custody by the Servicer as custodian of the
Receivable Files; provided, however, that the Servicer shall not be liable for
any portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Trustee. This indemnity shall survive the termination of
this Agreement and the resignation and removal of the Trustee.
SECTION 12.7. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section
12.7. If NationsCredit Commercial shall resign as Servicer in accordance with
the provisions of the Agreement or if all the rights and obligations of the
Servicer shall have been terminated under Section 18.1, the appointment of the
Servicer as custodian may be terminated by the Surety Bond Issuer, in the same
manner as the Surety Bond Issuer may terminate the rights and obligations of the
Servicer under Section 18.1. The Trustee shall, if required by the Surety Bond
Issuer following the occurrence and during the continuation of a Trigger Event
(as defined in the Reimbursement Agreement) or an Event of Default or the
Trustee, on behalf of the Trust, may terminate the Servicer's appointment as
custodian, with cause or as required by law at any time upon written
notification to the Servicer. As soon as practicable after any termination of
such appointment, the Servicer shall deliver the Receivable Files to the Trustee
or the Trustee's agent at such place or places as the Trustee may reasonably
designate.
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ARTICLE XIII
Administration and Servicing of Receivables
SECTION 13.1. Duties of Servicer. The Servicer shall manage,
service, administer and make collections on the Receivables (other than
Purchased Receivables) with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to all comparable receivables
that it services for itself or others. The Servicer's duties shall include
collection and posting of all payments, responding to inquiries of Obligors on
such Receivables, investigating delinquencies, sending payment statements to
Obligors, reporting tax information to Obligors, accounting for collections and
furnishing monthly and annual statements to the Trustee with respect to
distributions. The Servicer shall follow its customary standards, policies and
procedures in performing its duties as Servicer. Without limiting the generality
of the foregoing, the Servicer is authorized and empowered by the Trustee to
execute and deliver, on behalf of itself, the Trust, the Certificateholders, or
the Trustee or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Boats securing such
Receivables. If the Servicer shall commence a legal proceeding to enforce a
Receivable, the Trustee (in the case of a Receivable other than a Purchased
Receivable) shall thereupon be deemed to have automatically assigned, solely for
the purpose of collection on behalf of the party retaining an interest in such
Receivable, such Receivable to the Servicer. If in any enforcement suit or legal
proceeding it shall be held that the Servicer may not enforce a Receivable on
the ground that it shall not be a real party in interest or a holder entitled to
enforce the Receivable, the Trustee shall, at the Servicer's expense and
direction, take steps to enforce the Receivable, including bringing suit in its
name or the name of the Certificateholders or the Surety Bond Issuer. To enable
the Servicer to carry out its servicing and administrative duties hereunder, the
Trustee hereby irrevocably appoints the Servicer as its attorney-in-fact, such
appointment being coupled with an interest, to execute on its behalf such
documents or instruments as are necessary to accomplish the foregoing.
SECTION 13.2. Collection of Receivables Payments. The Servicer
shall make reasonable efforts to collect all payments called for under the terms
and provisions of the Receivables as and when the same shall become due and
shall follow such collection procedures as it follows with respect to all
comparable receivables that it services for itself or others. The Servicer may
grant extensions, rebates or adjustments on a Receivable subject to the
provisions of Section 13.6. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course of
servicing a Receivable.
SECTION 13.3. Realization Upon Receivables. On behalf of the
Trust, the Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Boat securing any Receivable as to which the Servicer shall have determined
eventual payment in full is unlikely. The Servicer shall follow such customary
and usual practices and procedures as it shall deem necessary or advisable in
its servicing of marine receivables, which may include reasonable efforts to
realize upon any recourse to Dealers and selling the Boat at public or private
sale. The foregoing shall be subject
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to the provision that, in any case in which the Boat shall have suffered damage,
the Servicer shall not expend funds in connection with the repair or the
repossession of such Boat unless it shall determine in its discretion that such
repair and/or repossession will increase the related Liquidation Proceeds by an
amount greater than the amount of such expenses.
SECTION 13.4. Physical Damage Insurance. The Servicer, in
accordance with its customary servicing procedures, shall require that each
Obligor shall have obtained physical damage insurance covering the related Boat
as of the date of execution of the related Receivable.
SECTION 13.5. Maintenance of Security Interests in Boats.
Subject to Article X of the Agreement, the Servicer shall, in accordance with
its customary servicing procedures, take such steps as are necessary to maintain
perfection of NationsCredit Commercial's security interest created by each
Receivable in the related Boat. The Trustee, on behalf of the Trust, hereby
authorizes the Servicer to take such steps as are necessary to perfect such
security interest on behalf of the Trust in the event of the relocation of a
Boat or for any other reason.
SECTION 13.6. Covenants of Servicer. The Servicer shall make
within the required time periods under the UCC all filings necessary in any
jurisdiction to give the Trustee a first priority perfected ownership interest
in the Receivables. The Servicer shall not release the Boat securing each
Receivable from the security interest granted by such Receivable in whole or in
part except in the event of payment in full by the Obligor thereunder. The
Servicer shall not impair the rights of the Certificateholders in any
Receivable. The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due and shall follow such collection procedures as it follows
with respect to all comparable marine receivables that it services for itself
and others. The Servicer shall not sell, pledge, transfer, deliver or otherwise
dispose of any Receivable, except as provided in the Agreement. The Servicer
will not increase or decrease the number or amount of any Scheduled Payment, or
the Principal Balance of a Receivable (except with respect to a prepayment of a
Scheduled Payment that does not result in a deferral of any other Scheduled
Payment) or the APR of a Receivable, or extend, rewrite or otherwise modify the
payment terms of a Receivable; provided, however, that the Servicer may extend a
Receivable for credit related reasons that would be acceptable to the Servicer
with respect to comparable marine receivables that it services for itself and
others and in accordance with its customary standards, policies and procedures
if the cumulative extensions with respect to any Receivable shall not cause the
term of such Receivable to extend beyond the last day of the Collection Period
which is related to the Final Scheduled Distribution Date; provided, further,
that such extensions will not be made if, in the reasonable opinion of the
Servicer, the extensions would modify the terms of such Receivable in such a
manner as to constitute a cancellation of such Receivable and the creation of a
new receivable for federal income tax purposes. In the event that the Servicer
fails to comply with the provisions of the preceding sentence or with respect to
the second proviso of the preceding sentence, notwithstanding having acted
according to its reasonable opinion, or if there is a final determination that
the Servicer has modified the terms of a Receivable in such a manner as to
constitute a cancellation of such Receivable and the creation of a new
Receivable for federal
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income tax purposes, the Servicer shall be required to purchase the Receivable
or Receivables affected thereby, for the Purchase Amount, in the manner
specified in Section 13.7 as of the first day of the Collection Period following
the Collection Period in which such failure occurs.
SECTION 13.7. Purchase of Receivables Upon Breach. The Servicer
or the Trustee shall inform the other party promptly, in writing, upon the
discovery (or, in the case of the Trustee, receipt of written notice by a Trust
Officer) of any breach pursuant to Section 13.6 or Section 13.15. Notice of any
breach pursuant to Section 13.6 or Section 13.15 may be given to the Servicer
and the Trustee by the Surety Bond Issuer. Unless the breach shall have been
cured by the second Record Date following such discovery (or, at the Servicer's
election, the first following Record Date), the Servicer shall purchase any
Receivable (or in the case of any representation and warranty set forth in
clause (xiv) of Section 13.15, the Servicer shall purchase Receivables such
that, after giving effect to such purchase, such representation and warranty
would be complied with), which as a result of such breach would materially and
adversely affect the interests of the Certificateholders or the Surety Bond
Issuer, as of such Record Date. In consideration of the purchase of such
Receivable, the Servicer shall remit the Purchase Amount in the manner specified
in Section 14.4 on the Deposit Date. The sole remedy of the Trustee, the Trust
or the Certificateholders with respect to a breach pursuant to Section 13.6 or
Section 13.15 shall be to require the Servicer to repurchase Receivables
pursuant to this Section 13.7.
SECTION 13.8. Servicing Fee. The Servicing Fee for a Collection
Period shall equal the product of one twelfth times the Servicing Fee Rate times
the Initial Pool Balance, in the case of the initial Collection Period, and
thereafter, the Pool Balance as of the last day of the prior Collection Period
(except that in the case of a successor Servicer, the Servicing Fee shall equal
such amount as is arranged in accordance with Section 18.2). The Servicer shall
also be entitled to all late payment and extension fees, prepayment charges and
other administrative fees or similar charges allowed by applicable law with
respect to Receivables, collected (from whatever source) on the Receivables;
provided, however, such late payment and other fees shall not form a part of the
Servicing Fee and the Servicer shall be entitled to such fees as and when
collected.
SECTION 13.9. Servicer's Certificate. On or before 10:00 a.m.
New York time on the Determination Date, the Servicer shall deliver to the
Trustee and the Surety Bond Provider a Servicer's Certificate, containing all
information necessary to make the transfers and distributions pursuant to
Section 14.5 for the Collection Period immediately preceding the date of such
Servicer's Certificate. The Servicer shall also deliver the Certificate Factor
in writing to NationsBanc Capital Markets, Inc. on the same day as it delivers
the Servicer's Certificate to the Trustee. If on any Deposit Date there is a
default by the Depositor or the Servicer in respect of any Purchase Amounts to
be deposited into the Collection Account pursuant to Section 14.4 hereof, the
Servicer shall recalculate all of the amounts described in the Servicer's
Certificate to reflect such default and deliver to the Trustee a revised
Servicer's Certificate reflecting such recalculations on such Deposit Date.
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SECTION 13.10. Annual Statement as to Compliance; Notice of
Default. (a) The Servicer shall deliver to the Trustee and the Surety Bond
Issuer, on or before March 31 of each year, beginning March 31, 1998, an
Officer's Certificate, dated as of December 31 of the preceding year, stating
that (i) a review of the activities of the Servicer during the preceding
12-month period (or such shorter period from the date of initial issuance of the
Certificates to December 31 of such year) and of its performance under the
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under the Agreement throughout such year (or such shorter
period, as the case may be), 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. A copy of such certificate and the report
referred to in Section 13.11 may be obtained by any Certificateholder by a
request in writing to the Trustee addressed to the Corporate Trust Office.
(b) The Servicer shall deliver to the Trustee and the Surety
Bond Issuer promptly after having obtained knowledge thereof, but in no event
later than 5 Business Days thereafter, written notice in an Officer's
Certificate of any event which with the giving of notice or lapse of time, or
both, would become an Event of Default under clause (i) or (ii) of Section 18.1.
The Depositor shall deliver to the Trustee and the Surety Bond Issuer promptly
after having obtained knowledge thereof, but in no event later than 5 Business
Days thereafter, written notice in an Officer's Certificate of any event which
with the giving of notice or lapse of time, or both, would become an Event of
Default under clause (ii) of Section 18.1.
SECTION 13.11. Annual Independent Certified Public Accountant's
Report. The Servicer shall cause a firm of independent certified public
accountants (who may also render other services to the Servicer and the
Depositor) to deliver to the Trustee on or before March 31 of each year
commencing March 31, 1998, a report to the effect that such firm has conducted
an examination, substantially in compliance with attestation standards
established by the American Institute of Certified Public Accountants, of
certain documents and records relating to the servicing procedures under this
Agreement and that, on the basis of such examination, such firm is of the
opinion that such servicing was conducted in compliance with the sections of
this Agreement with which independent public accountants generally possess
adequate professional knowledge and which are reasonably subject to positive
assurance by them, except for such exceptions as they believe to be immaterial
and such other exceptions as shall be set forth in such report. In the event
such firm requires Trustee to agree to the procedures performed by such firm,
Servicer shall direct Trustee in writing to so agree; it being understood and
agreed that Trustee will deliver such letter of agreement in conclusive reliance
upon the direction of Servicer, and Trustee makes no independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
SECTION 13.12. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders
access to the Receivables Files in such cases where the Certificateholder shall
be required by applicable statutes or regulations to review such documentation.
Access shall be afforded without charge, but only upon reasonable
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request and during the normal business hours at the respective offices of the
Servicer. Nothing in this Section 13.12 shall affect the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section 13.12.
SECTION 13.13. Servicer Expenses. The Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Certificateholders.
SECTION 13.14. Appointment of Sub-servicer. The Servicer may at
any time appoint a sub-servicer to perform all or any portion of its obligations
as Servicer hereunder; provided however, that the Servicer shall remain
obligated and be liable to the Trustee and the Certificateholders for the
servicing and administering of the Receivables in accordance with the provisions
hereof without diminution of such obligation and liability by virtue of the
appointment of such sub-servicer and to the same extent and under the same terms
and conditions as if the Servicer alone were servicing and administering the
Receivables. The fees and expenses of the sub-servicer shall be as agreed
between the Servicer and its sub-servicer from time to time and neither the
Trust, the Trustee nor the Certificateholders shall have any responsibility
therefor.
SECTION 13.15. Representations and Warranties of the Servicer
with respect to the Receivables. The Servicer does hereby make the following
representations and warranties on which the Trustee on behalf of the Trust,
relies in accepting the Receivables pursuant to this Agreement and the
Assignment and executing and authenticating the Certificates. Such
representations and warranties speak as of the Closing Date, but shall survive
the sale, transfer and assignment of the Receivables to the Trustee on behalf of
the Trust and any termination of the Servicer pursuant to Section 18.1.
(i) Characteristics of NCMF Receivables. Each NCMF Receivable
(a) shall be denominated in U.S. dollars, (b) shall have an original
maturity of not more than 180 months, (c) as of the Cutoff Date, shall
have a remaining maturity of not more than 180 months, (d) shall contain
customary and enforceable provisions such that the rights and remedies
of the holder thereof shall be adequate for realization against the
collateral of the benefits of the security, (e) shall be kept at the
offices of NationsCredit Commercial Corporation at 1000 Holcolmb Woods
Parkway, Roswell, Georgia 30076 and at 2260 Douglas Boulevard, Suite
100, Roseville, California 95061, (f) shall be adequate for realization
against the collateral of the benefits of the security, (g) shall
provide for level monthly payments (provided that the payment in the
first or last month in the life of the Receivable may be minimally
different from the level payment) that fully amortize the Amount
Financed by maturity and yield interest at the Annual
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Percentage Rate, and (h) shall provide for, in the event that such
contract is prepaid, a prepayment that fully pays the Principal Balance
and includes accrued but unpaid interest due through the date of
prepayment in an amount at least equal to the Annual Percentage Rate.
(ii) Schedule of NCMF Receivables. The information set forth in
Schedule B to the Agreement shall be true and correct in all material
respects as of the close of business on the Cutoff Date, and no
selection procedures believed to be adverse to the Certificateholders
shall have been utilized in selecting the NCMF Receivables.
(iii) No Government Obligor. None of the NCMF Receivables shall
be due from the United States of America or any State or local
government or from any agency, department or instrumentality of the
United States of America, any State or local government.
(iv) NCMF Receivables in Force. No NCMF Receivable shall have
been satisfied, subordinated or rescinded, nor shall any Boat have been
released from the security interests granted by the related NCMF
Receivable in whole or in part.
(v) No Waiver. No provision of a NCMF Receivable shall have been
waived.
(vi) No Defenses. Immediately following the conveyance of the
NCMF Receivables pursuant to the Assignment, except for the security
interests in favor of the Depositor and the Trustee, the NCMF
Receivables are free and clear of all security interests, liens,
charges, and encumbrances and to the best knowledge of the Servicer no
right of rescission, setoff, counterclaim or defense shall have been
asserted or threatened with respect to any NCMF Receivable.
(vii) No Liens. No liens or claims shall have been filed for
work, labor or materials relating to a Boat that shall be liens prior
to, or equal to the security interest in the Boat granted by the NCMF
Receivable.
(viii) Insurance. The Obligor has obtained physical damage
insurance covering the Boat and the Obligor is required under the terms
of the NCMF Receivable to maintain such insurance.
(ix) Lawful Assignment. No NCMF Receivable shall have been
originated in, or shall be subject to the laws of any jurisdiction under
which the sale, transfer and assignment of such NCMF Receivable under
the Assignment or pursuant to transfers of the Certificates shall be
unlawful, void or voidable.
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(x) Security Interest. Upon the NCMF Receivables being conveyed
to the Trust pursuant to the Assignment, the Trust shall have a
perfected security interest under the UCC in the NCMF Receivables.
(xi) Ship Mortgage Act. No Boat related to any NCMF Receivable
shall be required to be documented under the Ship Mortgage.
(xii) Compliance with Law. Each NCMF Receivable complies in all
material respects with all requirements of applicable Federal, State,
and local laws and regulations thereunder, including, without
limitation, usury laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Federal Trade Commission Act, the Fair
Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Magnuson-Moss Warranty Act, the Federal
Trade Commission Credit Practices Rule, State unfair and deceptive trade
practice laws, and State adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code, and any other applicable consumer
credit, equal credit opportunity and disclosure laws.
(xiii) Title. Immediately upon the sale and assignment
contemplated by the Assignment, the Trustee for the benefit of the
Certificateholders and the Surety Bond Issuer shall have good and
marketable title to each NCMF Receivable, free and clear of all Liens,
encumbrances, security interests and rights of others; and the sale and
assignment has been perfected under the UCC.
(xiv) As of the Cutoff Date, not more than (a) approximately
0.04% of the number of Receivables, constituting approximately 0.05% of
the Initial Pool Balance are related to Boats which have been
repossessed by the Servicer, (b) approximately 0.98% of the number of
Receivables, constituting approximately 0.85% of the Initial Pool
Balance are 30 to 59 days delinquent, (c) approximately 0.17% of the
number of Receivables, constituting approximately 0.17% of the Initial
Pool Balance are related to Boats which are 60 to 89 days delinquent and
(d) approximately 0.34% of the number of Receivables, constituting
approximately 0.32% of the Initial Pool Balance are related to Boats
which are 90 or more days delinquent.
(xv) Each Receivable creates a first priority perfected security
interest in the Boat financed thereby in favor of NationsCredit
Commercial (other than in the case of boat motors subject to certificate
of title statutes that provide for perfection of the security interests
in such boat motors by the filing of a UCC-1 financing statement).
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(xvi) To the best of the Servicers knowledge, no Liens or claims
are pending or threatened with respect to a Boat which may be or become
prior to or equal with the Lien of the related Receivable.
ARTICLE XIV
Distributions; Statements to
Certificateholders
SECTION 14.1. Accounts. (a) The Servicer shall establish and
maintain the Collection Account and the Certificate Account in the name of the
Trustee for the benefit of the Certificateholders and, to the extent herein
provided, for the benefit of the Surety Bond Issuer. The Collection Account
shall be a segregated, non-interest-bearing trust account initially established
with the Trustee and maintained with the Trustee so long as (i) the deposits of
the Trustee have the Required Deposit Rating or (ii) the Collection Account is
maintained as a fully segregated trust account. All amounts held in the
Collection Account (other than Purchase Amounts) shall be invested in Permitted
Investments by the Trustee, at the written direction of the Servicer, in each
case such investments maturing not later than the Deposit Date following the
Collection Period in which such amounts are so invested. Purchase Amounts
deposited on a Deposit Date shall not be invested. Such written direction shall
certify that any such investment is authorized by this Section 14.1 and complies
with the requirements of Permitted Investments as set forth in Schedule C. The
Certificate Account shall be a segregated, non-interest-bearing trust account
initially established with the Trustee and maintained with the Trustee for so
long as (x) the deposits of the Trustee have the Required Deposit Rating or (y)
the Certificate Account is maintained as a fully segregated trust account. The
amounts in the Certificate Account shall not be invested. Should the deposits of
the Trustee no longer have the Required Deposit Rating and the Collection
Account or the Certificate Account, as applicable, shall not be maintained as a
fully segregated trust account, then the Servicer shall, with the Trustee's
assistance as necessary, cause the Certificate Account and/or the Collection
Account to be moved, within 60 days after the occurrence of the later of the
loss of the Required Deposit Rating or the cessation of such accounts being
maintained as fully segregated trust accounts, to a bank or trust company
organized under the laws of the United States of any state thereof, the deposits
of which shall have the Required Deposit Rating.
(b) (i) The Depositor shall establish the Reserve Account in the name of
the Collateral Agent which shall be pledged to the Trustee for the
benefit of the Certificateholders and the Surety Bond Issuer. The
Reserve Account shall be a segregated, non-interest-bearing trust
account initially established and maintained with the Trustee for so
long as (x) the deposits of the Trustee have the Required Deposit Rating
or (y) the Reserve Account is maintained as a fully segregated trust
account. The Reserve Account shall not be property of the Trust. All
amounts held in the Reserve Account shall be invested in Permitted
Investments by the Collateral Agent, at the written direction of the
Depositor, in each case such investments maturing not later than the
Deposit Date following the
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Collection Period in which such amounts are so invested. Such written
direction shall certify that any such investment is authorized by this
Section 14.1 and comply with the requirements of Permitted Investments
as set forth in Schedule C. Should the deposits of the Collateral Agent
no longer have the Required Deposit Rating or the Reserve Account shall
not be maintained as a fully segregated trust account, then the
Depositor shall, with the Collateral Agent's assistance as necessary,
cause the Reserve Account to be moved, within 60 days after the
occurrence of the later of the loss of the Required Deposit Rating or
the cessation of such accounts being maintained as fully segregated
trust accounts, to a bank or trust company organized under the laws of
the United States or any state thereof, the deposits of which shall have
the Required Deposit Rating.
(ii) On the date of the issuance of the Certificates, the
Depositor shall cause the Reserve Account Initial Deposit to be
deposited into the Reserve Account. The Depositor hereby grants to the
Collateral Agent for the benefit of the Certificateholders and the
Surety Bond Issuer a security interest in and to the Reserve Account and
any and all Account Property credited thereto from time to time,
including, but not limited to, Permitted Investments, to secure payment
of the Certificates according to their terms. Amounts held from time to
time in the Reserve Account will continue to be held by the Collateral
Agent for the benefit of the Certificateholders and the Surety Bond
Issuer, but the Reserve Account shall not be an asset of the Trust.
Funds held in the Reserve Account shall be remitted to the Depositor
upon the Depositor's written request upon the termination of the Trust.
By acceptance of their Certificates or interest therein and by execution
and delivery of the Reimbursement Agreement by the Surety Bond Issuer,
the Certificateholders and Certificate Owners and the Surety Bond
Issuer, respectively, shall be deemed to have appointed Bankers Trust
Company as Collateral Agent. Bankers Trust Company hereby accepts such
appointment as Collateral Agent.
(iii) With respect to the Account Property in respect of the
Reserve Account, the Collateral Agent agrees that:
A. any Account Property that is held in deposit accounts
shall be held solely in a bank with the Required Deposit Rating;
and each such bank with the Required Deposit Rating shall be
subject to the exclusive custody and control of the Collateral
Agent, and the Collateral Agent shall have sole signature
authority with respect thereto;
B. any Account Property that constitutes Physical
Property shall be delivered to the Collateral Agent in
accordance with paragraph (a) of the definition of "Delivery"
and shall be held, pending maturity or disposition, solely by
the Collateral Agent, or a financial intermediary (as such term
is defined in
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Section 8-313(4) of the Relevant UCC) acting solely for the
benefit of the Certificateholders;
C. any Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal
book-entry regulations shall be delivered to the Collateral
Agent in accordance with paragraph (b) of the definition of
"Delivery" and shall be maintained by the Collateral Agent,
pending maturity or disposition, through continued book-entry
registration of such Account Property as described in such
paragraph; and
D. any Account Property that is an "uncertificated
security" under Article 8 of the Relevant UCC and that is not
governed by clause (C) above shall be delivered to the
Collateral Agent in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the
Collateral Agent, pending maturity or disposition, through
continued registration of the Collateral Agent's (or its
nominee's) ownership of such security.
Effective upon Delivery of any Account Property in the form of
Physical Property, book-entry securities or uncertificated securities,
the Collateral Agent shall be deemed to have purchased such Account
Property for value, in good faith and without notice of any adverse
claim thereto.
(iv) The Depositor and the Servicer agree to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments
(including, without limitation, any financing statements under the
Relevant UCC or this Agreement) as may be determined to be necessary, in
order to perfect the interests created by this Section 14.1(b) and
otherwise effectuate the purposes, terms and conditions of this Section
14.1(b).
SECTION 14.2. Collections. The Servicer shall remit to the
Collection Account within two Business Days after receipt thereof all
Collections, any amounts referred to in clauses (ii) and (iv) of the definition
of Available Funds, each as collected during the Collection Period; provided,
however, that so long as NationsCredit Commercial is acting as the Servicer, the
Servicer shall be permitted to make remittances of Collections, any amounts
referred to in clause (ii) of the definition of Available Funds and Liquidation
Proceeds to the Collection Account in next-day funds or immediately available
funds by 12:30 p.m. New York City time on the Deposit Date immediately following
such Collection Period if the specific terms and conditions set forth below in
this Section 14.2 are satisfied and only for so long as such terms and
conditions are satisfied:
(i) the Servicer shall be NationsCredit Commercial or any other
Successor Servicer pursuant to Section 17.3;
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(ii) there exists no Event of Default (as described below);
(iii) if the Servicer does not have a short term debt rating or
deposit rating, as applicable, of at least A-1 from S&P and P-1 from
Moody's, a guaranty, letter of credit, surety bond or other similar
instrument is issued covering Collections, any amounts referred to in
clause (ii) of the definition of Available Funds and Liquidation
Proceeds held by NationsCredit Commercial or its successor, which is
acceptable to the Rating Agencies and the Surety Bond Issuer and issued
by an entity, which has a short-term debt or deposit rating, as
applicable, of at least A-1 from S&P and P-1 from Moody's; and
(iv) the Servicer, the Trustee, the Depositor and the Surety
Bond Issuer shall not have received any notice from S&P or Moody's that
failure to deposit such funds more frequently will result in a reduction
or withdrawal of the then current rating on the Certificates by either
S&P or Moody's.
The Trustee shall not be deemed to have knowledge of any event
or circumstance under clause (ii) above that would require remittance by the
Servicer of Collections and Liquidations Proceeds to the Collection Account two
Business Days after receipt thereof unless the Trustee has received notice of
such event or circumstance from the Depositor, the Servicer or the Surety Bond
Issuer in an Officer's Certificate or from the Holders of Certificates
evidencing not less than 25% of the Certificate Balance.
SECTION 14.3. Application of Collections. As of each
Determination Date, all Collections for the related Collection Period shall be
applied as follows:
With respect to each Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall be applied first to
late payment and extension fees, second to interest accrued on the Receivable,
third to principal due on the Receivable during the related Collection Period,
fourth to insurance premiums or amounts due on loans to the Obligors to finance
the payment of insurance premiums for collateral protection insurance purchased
by the Servicer, and fifth to administrative charges, if any. Last, any excess
shall be applied to prepay the Principal Balance of the Receivable.
SECTION 14.4. Additional Deposits. (a) The Servicer and/or the
Depositor shall deposit in the Collection Account the aggregate Purchase Amount
with respect to Purchased Receivables and the Servicer shall deposit therein all
amounts to be paid under Section 12.2, 13.7 and 20.2. All such deposits shall be
made in immediately available funds by 12:30 p.m. New York City Time on the
Deposit Date relating to the Collection Period during which such repurchase,
purchase or other obligation arose. The Trustee shall deposit in the Certificate
Account the aggregate of any amounts received from the Surety Bond Issuer
pursuant to Section 14.5(a)(iii) on the date of receipt thereof.
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(b) If the Servicer shall be required pursuant to Section 14.2
to remit Collections to the Collection Account two Business Days after receipt
rather than on a monthly basis, then, if the Servicer is NationsCredit
Commercial or an affiliate thereof is the servicer it may remit payments
collected on Unsold Contracts as well as payments collected on Receivables and
Liquidation Proceeds to the Collection Account. Upon receipt of an Officer's
Certificate of the Servicer identifying the amount of funds in the Collection
Account representing Collections attributable to Unsold Contracts, the Trustee
shall transfer such funds in accordance with the instructions contained in such
Officer's Certificate.
SECTION 14.5. Distributions. (a) (i) On each Deposit Date, the
Trustee shall transfer all amounts on deposit in the Collection Account to the
Certificate Account, in immediately available funds, less any funds identified
in an Officer's Certificate of the Servicer as proceeds (x) of Unsold Contracts
and (y) of Collections on the Receivables allocable to late payment and
extension fees, and administrative charges, provided, however, that in the event
that the Servicer is required to make deposits to the Collection Account two
Business Days after receipt pursuant to Section 14.2, the amount of Available
Funds transferred from the Collection Account to the Certificate Account will
include only those funds that were deposited into the Collection Account in the
Collection Period relating to such Distribution Date. The amount of the transfer
from the Collection Account to the Certificate Account shall be set forth in the
Servicer's Certificate for such Distribution Date.
(ii) On each Deposit Date, the Trustee shall transfer from the
Reserve Account to the Certificate Account an amount equal to the lesser
of (x) the amount on deposit in the Reserve Account and (y) an amount
equal to the shortfall, if any, between, (A) Available Funds for such
Collection Period and (B) the sum of (1) the Monthly Interest Payment
and any Carry-Over Monthly Interest, (2) the Servicing Fee and any
Carry-Over Servicing Fee to be distributed to the Servicer pursuant to
Section 14.5(b)(ii) and (3) the Monthly Principal Payment and any
Carry-Over Monthly Principal Payment, each for the related Distribution
Date (collectively "Priority Distributions") (the amount transferred
pursuant to this clause (ii) is the "Reserve Account Withdrawal Amount"
for such Deposit Date).
The Reserve Account Withdrawal Amount shall be set forth in the
Servicer's Certificate with respect to each Distribution Date.
(iii) If on any Determination Date the Servicer has reported to
the Trustee in the Servicer's Certificate that the Servicer has
determined that Available Funds for the related Distribution Date
together with any Reserve Account Withdrawal Amount for such
Distribution Date are insufficient to provide for the Priority
Distribution on such Distribution Date (the amount of such insufficiency
is referred to as the "Surety Drawing Amount" for such
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Distribution Date, then, after receipt of such Servicer's Certificate,
the Trustee shall promptly (and in any event not later than 2:00 p.m. on
the second Business Day prior to the Distribution Date) deliver a
completed demand for payment under the Surety Bond to the Surety Bond
Issuer requesting payment in an amount equal to the Surety Drawing
Amount for such Distribution Date. The Surety Bond Issuer shall pay or
cause to be paid the amount of such demand for payment to the Trustee
for credit to the Certificate Account no later than the later of 11:00
a.m. on the related Deposit Date and the second Business Day after the
Surety Bond Issuer receives a demand for payment.
(b) On each Distribution Date, as set forth in the Servicer's
Certificate for such Distribution Date, the Trustee will make the following
distributions from the Certificate Account in the following order of priority:
(i) to the Certificateholders of record as of the related Record
Date, the Monthly Interest Payment and any Carry-Over Monthly Interest;
(ii) if the Servicer is not NationsCredit Commercial or an
affiliate thereof, to the Servicer, the Servicing Fee and any Carry-Over
Servicing Fee;
(iii) to the Certificateholders of record as of the related
Record Date, the Monthly Principal Payment and any Carry-Over Monthly
Principal;
(iv) if NationsCredit Commercial or an affiliate thereof is the
Servicer, to the Servicer, the Servicing Fee and any Carry-Over
Servicing Fee;
(v) to the Surety Bond Issuer, any amounts owing to the Surety
Bond Issuer hereunder and pursuant to the Reimbursement Agreement and
not paid;
(vi) to the Collateral Agent, an amount up to the Specified
Reserve Account Requirement for deposit into the Reserve Account; and
(vii) to the Depositor, any remaining amounts.
(c) On each Distribution Date as set forth in the Servicer's
Certificate for such Distribution Date, the Trustee shall withdraw from the
Reserve Account and distribute to the Depositor an amount equal to the excess,
if any, of the (x) amount on deposit in the Reserve Account over (y) the
Specified Reserve Account Requirement.
Distributions to Certificateholders, except in the case of
distributions under Section 20.1, shall be made by check mailed by the Trustee
to each Certificateholder's respective address of record on the Certificate
Register (or, where a Clearing Agency is the Certificateholder, by delivery of
immediately available funds) and distributions to the Servicer,
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the Surety Bond Issuer, the Collateral Agent or the Depositor shall be made by
wire transfer of immediately available funds.
SECTION 14.6. Net Deposits. For so long as the Servicer shall be
entitled pursuant to Section 14.2 to remit Collections on a monthly basis rather
than more frequently, the Servicer may make the remittances pursuant to Sections
14.2 and 14.4 above net of amounts to be distributed to the Servicer pursuant to
Section 14.5(b). Nonetheless, the Servicer shall account for all the above
described remittances and distributions in the Servicer's Certificate as if the
amounts were deposited and/or transferred separately.
SECTION 14.7. Statements to Certificateholders. (a) On each
Distribution Date, the Servicer shall provide to the Trustee the Statement to
Certificateholders, setting forth for the Collection Period relating to such
Distribution Date the following information (stated in the case of items (i),
(ii) and (iii), on the basis of $1,000 initial principal amount) as of such
Distribution Date a copy of which shall be forwarded by the Trustee to each
Certificateholder on such Distribution Date:
(i) The amount of the Certificateholder's distribution which
constitutes the Monthly Principal Payment (including any Carry-Over
Monthly Principal);
(ii) The amount of the Certificateholder's distribution which
constitutes the Monthly Interest Payment (including any Carry-Over
Monthly Interest);
(iii) The Certificateholder's pro rata portion of the Servicing
Fee (including any Carry-Over Servicing Fee);
(iv) The Certificate Balance and the Certificate Factor as of
the close of business on such Distribution Date; and
(v) The Pool Balance as of the last day of the Collection
Period.
(b) Within the prescribed period of time for tax reporting
purposes after the end of each calendar year during the term of the Agreement,
the Trustee shall mail, to each Person who at any time during such calendar year
shall have been a Certificateholder, a statement containing the sum of the
amounts determined in each of clauses (i) and (ii), for such calendar year or,
in the event such Person shall have been a Certificateholder during a portion of
such calendar year, for the applicable portion of such year.
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ARTICLE XIV A
The Surety Bond
SECTION 14A.1. The Surety Bond. The Servicer and the Transferor agree,
simultaneously with the execution and delivery of this Agreement, to cause the
Surety Bond Issuer to issue the Surety Bond to the Trustee for the benefit of
the Trust in accordance with the terms thereof.
SECTION 14A.2. Preference Events. If the payment guaranteed by the
Surety Bond Issuer under the Surety Bond is voided pursuant to a final and
non-appealable order (a "Preference Event") under any applicable bankruptcy,
insolvency, receivership or similar law in an Insolvency Proceeding and, as a
result of such a Preference Event, the Trustee is required to return such voided
payment, or any portion of such voided payment, made in respect of the
Certificates (an "Avoided Payment"), the Trustee shall furnish to the Surety
Bond Issuer: (x) a certified copy of a final order of a court exercising
jurisdiction in such Insolvency Proceeding to the effect that the Trustee is
required to return any such payment or portion thereof during the term of the
Surety Bond because such payment was voided under applicable law, with respect
to which order the appeal period has expired without an appeal having been filed
(the "Final Order"), (y) an assignment, in form reasonably satisfactory to the
Surety Bond Issuer, irrevocably assigning to the Surety Bond Issuer all rights
and claims of the Trustee relating to or arising under such Avoided Payment and
(z) a Notice for Payment appropriately completed and executed by the Trustee.
SECTION 14A.3. Surrender of Surety Bond. The Trustee shall surrender the
Surety Bond to the Surety Bond Issuer for cancellation upon its expiration in
accordance with the terms thereof.
SECTION 14A.4. Replacement Surety Bond. In the event of a Surety Bond
Issuer Default or the rating of the Surety Bond Issuer is downgraded by any
Rating Agency such that the rating of the Certificates is reduced, suspended or
withdrawn, the Servicer shall be permitted, in accordance with the terms of the
Reimbursement Agreement, but shall not be obligated, to substitute a new surety
bond for the Surety Bond or may arrange for any other form of credit
enhancement; provided, however, that, in each case, the rating of the
Certificates following any such substitution shall be the highest rating
available for each of the Rating Agencies and provided further that the Surety
Bond Issuer is reimbursed for all amounts due under this Agreement and the
Reimbursement Agreement. It shall be a condition to substitution of any such new
surety bond or other form of credit enhancement that there be delivered to the
Trustee (i) an Officer's Certificate by the Servicer stating that the conditions
to such substitution set forth in this Section 14A.4 (other than in clause (ii))
have been satisfied and (ii) a legal opinion, acceptable in form to the Trustee,
from counsel to the provider of such surety bond or other form of credit
enhancement with respect to the enforceability thereof and such other matters as
the Trustee may require. Upon receipt of written notice of any such substitution
from the Servicer and the taking of physical possession of the replacement
surety bond or other form of credit enhancement, the Trustee shall, within five
(5) Business Days following receipt of such notice and such taking of physical
possession, deliver the
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Surety Bond marked "Cancelled" to the Surety Bond Issuer, and the Surety Bond
Issuer will have no further liability under the Surety Bond.
ARTICLE XV
The Certificates
SECTION 15.1. The Certificates. The Certificates shall be issued
in book-entry form in minimum denominations representing $1,000 of initial
principal balance of the Receivables and in integral multiples thereof;
provided, however, that one Certificate may be issued in a denomination that
includes any residual amount and that such Certificate shall be retained by the
Depositor (the "Residual Certificate"). The Certificates shall be executed by
the Trustee on behalf of the Trust solely in its capacity as Trustee by manual
or facsimile signature of a Trustee Officer. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
valid and binding obligations of the Trust, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates.
SECTION 15.2. Authentication of Certificates. The Trustee shall
cause the Certificates to be executed on behalf of the Trust, authenticated and
delivered to or upon the written order of the Depositor, signed by the
Depositor's chairman of the board, the president, any vice chairman of the
board, any vice president, the treasurer, any assistant treasurer or the
controller of the Depositor, without further corporate action by the Depositor,
in authorized denominations, pursuant to the Agreement. No Certificate shall
entitle its holder to any benefit under the Agreement, or shall be valid for any
purpose, unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit B hereto executed
by the Trustee by manual signature; such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
SECTION 15.3. Registration of Transfer and Exchange of
Certificates. (a) The Certificate Registrar shall keep or cause to be kept, at
the office or agency maintained pursuant to Section 15.7, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall be the initial
Certificate Registrar.
(b) Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Trustee shall execute,
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of a like
aggregate amount dated the date of authentication by the Trustee. At the option
of a Holder, Certificates may be exchanged for other Certificates of authorized
denominations of a
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like aggregate amount upon surrender of the Certificates to be exchanged at the
Corporate Trust Office.
(c) Every Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the Holder or his attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer and exchange shall be canceled and
subsequently disposed of by the Trustee.
(d) No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
SECTION 15.4. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b) there
shall be delivered to the Certificate Registrar or the Trustee such security or
indemnity as may be required by them to save each of them harmless, then in the
absence of notice that such Certificate shall have been acquired by a bona fide
purchaser, the Trustee on behalf of the Trust shall execute and the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination. In connection with the issuance of any new Certificate
under this Section 15.4, the Trustee and the Certificate Registrar may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section 15.4 shall Constitute conclusive evidence of ownership
in the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
SECTION 15.5. Persons Deemed Owners. Prior to due presentation
of a Certificate for registration of transfer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 14.5 and for all other purposes whatsoever, and neither the
Trustee nor the Certificate Registrar shall be bound by any notice to the
contrary.
SECTION 15.6. Access to List of Certificateholders Names and
Addresses. At such time as the Certificates exist as Definitive Certificates,
the Trustee shall furnish or cause to be furnished to the Servicer and the
Surety Bond Issuer, within 15 days after receipt by the Trustee of a request
therefor from the Servicer or the Surety Bond Issuer in writing, a list, of the
names and addresses of the Certificateholders as of the most recent Record Date.
If three or more Certificateholders, or one or more Holders of Certificates
aggregating not less than 25% of the Certificate Balance, apply in writing to
the Trustee, and such application states that the applicants desire to
communicate with other Certificateholders with respect to their rights under
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the Agreement or under the Certificates and such application shall be
accompanied by a copy of the communication that such applicants propose to
transmit, then the Trustee shall promptly after the receipt of such application,
afford such applicants access during normal business hours to the current list
of Certificateholders. Each Holder, by receiving and holding a Certificate,
shall be deemed to have agreed to hold neither the Servicer nor the Trustee
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
SECTION 15.7. Maintenance of Office or Agency. The Trustee shall
maintain in the Borough of Manhattan, the City of New York, an office or offices
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates and the Agreement may be served. The Trustee
initially designates the Corporate Trust Office as specified in the Agreement as
its office for such purposes. The Trustee shall give prompt written notice to
the Servicer and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 15.8. Book-Entry Certificates. The Certificates, upon
original issuance (except for the Residual Certificate), will be issued in the
form of one or more global Certificates registered in the name of the nominee of
The Depository Trust Company, the initial Clearing Agency, by or on behalf of
the Depositor. The Certificates delivered to The Depository Trust Company shall
initially be registered on the Certificate Register in the name of CEDE & CO.,
the nominee of the initial Clearing Agency, and no Certificate Owner will
receive a physical certificate representing such Certificate Owner's interest in
the Certificates, except as provided in Section 15.10. Unless and until
definitive, fully registered Certificates (the "Definitive Certificates") have
been issued to Certificate Owners pursuant to Section 15.10:
(i) the provisions of this Section 15.8 shall be in full force
and effect;
(ii) the Depositor, the Servicer, the Certificate Registrar and
the Trustee may deal with the Clearing Agency for all purposes
(including the making of distributions on the Certificates) as the
authorized representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section 15.8
conflict with any other provisions of the Agreement, the provisions of
this Section 15.8 shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Certificate Owners and the Clearing
Agency and/or the Clearing Agency Participants. Pursuant to the
Depository Agreement, unless and until Definitive Certificates are
issued pursuant to Section 15.10, the initial Clearing
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Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the Certificates to such Clearing Agency Participants; and
(v) whenever the Agreement requires or permits actions to be
taken based upon instructions or directions of Holders of Certificates
evidencing a specified percentage of the Pool Balance the Clearing
Agency will take such actions with respect to specified percentages of
the Pool Balance only at the direction of and on behalf of Clearing
Agency Participants whose holdings include undivided interests that
satisfy such specified percentages. DTC may take conflicting actions
with respect to other undivided interests to the extent that such
actions are taken on behalf of Clearing Agency Participants whose
holdings include such undivided interests.
SECTION 15.9. Notices to Clearing Agency. Whenever notice or
other communication to the Certificateholders is required under the Agreement,
other than to the Holder of the Residual Certificate, unless and until
Definitive Certificates shall have been issued to Certificate Owners pursuant to
Section 15.10, the Trustee and the Servicer shall give all such notices and
communications specified herein to be given to Holders of the Certificates to
the Clearing Agency.
SECTION 15.10. Definitive Certificates. If (i) the Depositor
advises the Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities as Depository with respect to
the Certificates and the Trustee or the Depositor is unable to locate a
qualified successor, (ii) the Depositor, at its option, elects to terminate the
book-entry system through the Clearing Agency, or (iii) after the occurrence of
an Event of Default, Certificate owners representing beneficial interests
aggregating not less than 51% of the Certificate Balance advise the Trustee and
the Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificate Owners, then the Trustee through the
Clearing Agency shall notify all Certificate Owners of the occurrence of any
such event and of the availability through the Clearing Agency of Definitive
Certificates. Upon surrender by the Clearing Agency of the global Certificates
representing the Certificates and instructions for re-registration, the Trustee
shall issue the Definitive Certificates and deliver such Definitive Certificates
in accordance with the instructions of the Clearing Agency. Neither the
Depositor, the Certificate Registrar nor the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder. The Trustee shall not be liable if
the Trustee or the Depositor is unable to locate a qualified successor Clearing
Agency.
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ARTICLE XVI
The Depositor
SECTION 16.1. Representations of Depositor. The Depositor
makes the following representations on which the Trustee relies in accepting
the Receivables in trust and executing and authenticating the Certificates.
(i) Organization and Good Standing. The Depositor shall have
been duly organized and shall be validly existing as a corporation in
good standing under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its business as such
properties shall be currently owned and such business is presently
conducted, and had at all relevant times, and shall have, power,
authority and legal right to acquire and own the Receivables.
(ii) Due Qualification. The Depositor shall be duly qualified to
do business as a foreign corporation in good standing, and shall have
obtained all necessary licenses and approvals, in all jurisdictions in
which the ownership or lease of property or the conduct of its business
shall require such qualifications.
(iii) Principal Place of Business. The Depositor's principal
place of business is located in the State of Texas.
(iv) Power and Authority. The Depositor shall have the power and
authority to execute and deliver the Agreement and to carry out its
terms; the Depositor shall have full power and authority to sell and
assign the property to be sold and assigned to and deposited with the
Trustee as part of the Trust and shall have duly authorized such sale
and assignment to the Trustee by all necessary corporate action; and the
execution, delivery and performance of the Agreement shall have been
duly authorized by the Depositor by all necessary corporate action.
(v) Valid Sale; Binding Obligations. The Agreement shall
evidence (A) a valid sale, transfer and assignment of the Receivables,
enforceable against creditors of and purchasers from the Depositor, and
(B) a legal, valid and binding obligation of the Depositor enforceable
in accordance with its terms.
(vi) No Violation. The consummation of the transactions
contemplated by the Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time
or both) a default under, the articles of incorporation or by-laws of
the Depositor, or any indenture, agreement or other instrument to which
the Depositor is a party or by which it shall be bound; nor result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other
instrument (other than the Agreement); nor violate any law or, to the
best of the Depositor's knowledge, any
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order, rule or regulation applicable to the Depositor of any court or of
any Federal or State regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or
its properties.
(vii) No Proceedings. There are no proceedings or investigations
pending, or to the Depositor's best knowledge, threatened, before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties: (A) asserting the invalidity of the Agreement or the
Certificates; (B) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by the
Agreement; (C) seeking any determination or ruling that might materially
and adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, the Agreement or the
Certificates; or (D) relating to the Depositor and which might adversely
affect the Federal income tax attributes of the Certificates.
(viii) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in connection with the execution and delivery
by the Depositor of the Agreement, the Reimbursement Agreement and the
Certificates, the performance by the Depositor of the transactions
contemplated by the Agreement, the Reimbursement Agreement and the
Certificates, and the fulfillment by the Depositor of the terms hereof,
have been obtained; provided, however, that the Depositor makes no
representation or warranty regarding State securities or "blue sky" laws
in connection with the distribution of the Certificates.
SECTION 16.2. Liability of Depositor; Indemnities. The Depositor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under the Agreement:
(i) The Depositor shall indemnify, defend and hold harmless the
Trustee (which for purposes of this Section 16.2 shall include its
directors, employees, officers and agents) and the Trust from and
against any taxes that may at any time be asserted against the Trustee
or the Trust with respect to, and as of the date of, the sale of the
Receivables to the Trustee or the issuance and original sale of the
Certificates, including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but, in the case
of the Trust, not including any taxes asserted with respect to ownership
of the Receivables or Federal or other income taxes arising out of the
transactions contemplated by the Agreement) and costs and expenses in
defending against the same.
(ii) The Depositor shall indemnify, defend and hold harmless the
Trustee (which for purposes of this Section 16.2 shall include its
directors,
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employees, officers and agents) and the Trust from and against any loss,
liability or expense incurred by reason of (a) the Depositor's willful
misfeasance, bad faith or negligence in the performance of its duties
under the Agreement, or by reason of reckless disregard of its
obligations and duties under the Agreement, (b) the Depositor's
violation of Federal or State securities laws in connection with the
registration of the sale of the Certificates or (c) any action taken by
the Trustee at the direction of the Servicer pursuant to Section 13.1 or
otherwise.
Indemnification under this Section 16.2 shall survive the
termination of the Agreement and the resignation or removal of the Trustee, and
shall include, without limitation, reasonable fees and expenses of counsel and
expenses of litigation. If the Depositor shall have made any indemnity payments
to the Trustee pursuant to this Section 16.2 and the Trustee thereafter shall
collect any of such amounts from others, the Trustee shall repay such amounts to
the Depositor, without interest.
SECTION 16.3. Merger or Consolidation of, or Assumption of the
Obligations of Depositor. Any Person (a) into which the Depositor may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Depositor shall be a party, or (c) which may succeed to the properties and
assets of the Depositor substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Depositor under the Agreement and the Reimbursement Agreement, shall be
the successor to the Depositor hereunder without the execution or filing of any
document or any further act by any of the parties to the Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 12.1 shall have been
breached and no Event of Default, and no event that, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing, (ii) the Depositor shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
16.3 and (iii) the Depositor shall have delivered an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Trustee in the
Receivables, and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interest. The Depositor shall provide notice of any merger,
consolidation or succession pursuant to this Section 16.3 to each Rating Agency
and the Surety Bond Issuer. Notwithstanding anything herein to the contrary, the
Depositor shall not consummate any transaction of a type referred to in clauses
(a), (b) or (c) above unless at such time or prior thereto the foregoing
agreement of assumption shall have been executed and the conditions described in
clauses (i), (ii) and (iii) shall have been satisfied.
SECTION 16.4. Limitation on Liability of Depositor and Others.
The Depositor and any director or officer or employee or agent of the Depositor
may rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted
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by any Person respecting any matters arising hereunder. The Depositor shall not
be under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its obligations under the Agreement, and that in its
opinion may involve it in any expense or liability.
SECTION 16.5. Depositor May Own Certificates. The Depositor and
any Person controlling, controlled by or under common control with, the
Depositor may in its individual or any other capacity become the owner or
pledgee of Certificates with the same rights as it would have if it were not the
Depositor or an affiliate thereof, except as otherwise provided in the
definition of "Certificateholder" specified in Section 11.1. Certificates so
owned by or pledged to the Depositor or such controlling or commonly controlled
Person shall have an equal and proportionate benefit under the provisions of the
Agreement, without preference, priority or distinction as among all the
Certificates.
SECTION 16.6. Depositor's Interest in Reserve Account; No
Transfer. The Depositor hereby acknowledges that the Reserve Account shall not
be a part of the Trust. The Depositor hereby acknowledges that any amounts on
deposit in the Reserve Account (and any investment earnings thereon) is owned
directly by it, and the Depositor agrees to treat the same as its assets (and
earnings) for federal tax and all other purposes. Funds deposited therein shall
be distributable to the Collection Account, the Surety Bond Issuer and the
Depositor as described in this Agreement and in the Reimbursement Agreement.
ARTICLE XVII
The Servicer
SECTION 17.1. Representations of Servicer. The Servicer makes
the following representations on which the Trustee relies in accepting the
Receivables in trust and executing and authenticating the Certificates. The
representations speak as of the execution and delivery of the Agreement and
shall survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Servicer shall have been
duly organized and shall be validly existing as a corporation in good
standing under the laws of the State of its incorporation, with power
and authority to own its properties and to conduct its business as such
properties shall be currently owned and such business is presently
conducted, and had at all relevant times, and shall have, power,
authority and legal right to acquire, own, sell and service the
Receivables and to hold the Receivable Files as custodian on behalf of
the Trustee.
(ii) Due Qualification. The Servicer shall be duly qualified to
do business as a foreign corporation in good standing, and shall have
obtained all necessary licenses and approvals, in all jurisdictions in
which the ownership or
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lease of property or the conduct of its business (including the
servicing of the Receivables as required by the Agreement) shall require
such qualifications.
(iii) Power and Authority. The Servicer shall have the power and
authority to execute and deliver the Agreement and to carry out its
terms; and the executions delivery and performance of the Agreement
shall have been duly authorized by the Servicer by all necessary
corporate action.
(iv) Valid Sale; Binding Obligations. The Agreement shall
constitute a legal, valid and binding obligation of the Servicer
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and
similar laws relating to creditors' rights generally and subject to
general principals of equity.
(v) No Violation. The consummation of the transactions
contemplated by the Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time
or both) a default under, the articles of incorporation or by-laws of
the Servicer, or any indenture, agreement or other instrument to which
the Servicer is a party or by which it shall be bound; nor result in the
creation or imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other instrument (other
than the Agreement); nor violate any law or, any order, rule or
regulation applicable to the Servicer of any court or of any Federal or
State regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer or its properties.
(vi) No Proceedings. There are no proceedings or investigations
pending, or, to the Servicer's knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties:
(A) asserting the invalidity of the Agreement or the Certificates; (B)
seeking to prevent the issuance of the Certificates or the consummation
of any of the transactions contemplated by the Agreement; (C) seeking
any determination or ruling that might materially and adversely affect
the performance by the Servicer of its obligations under, or the
validity or enforceability of, the Agreement or the Certificates; or (D)
relating to the Servicer and which might adversely affect the Federal
income tax attributes of the Certificates.
(vii) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in connection with the execution and delivery
by the Servicer of the Agreement and the Reimbursement Agreement, the
performance by the Servicer
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of the transactions contemplated by the Agreement, the Reimbursement
Agreement and the Certificates, and the fulfillment by the Servicer of
the terms hereof, have been obtained; provided, however, that the
Servicer makes no representation or warranty regarding State securities
or "blue sky" laws in connection with the distribution of the
Certificates.
SECTION 17.2. Liability of Servicer; Indemnities. The Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under the Agreement:
(i) The Servicer shall defend, indemnify and hold harmless the
Trustee (which for purposes of this Section 17.2 shall include its
directors, officers, employees and agents), the Trust, the
Certificateholders and the Surety Bond Issuer from and against any and
all costs, expenses, losses, damages, claims and liabilities, arising
out of or resulting from the use, ownership or operation by the Servicer
or any affiliate thereof of a Boat.
(ii) The Servicer shall indemnify, defend and hold harmless the
Trustee, (which for purposes of this Section 17.2 shall include its
directors, officers, employees and agents), the Trust and the Surety
Bond Issuer from and against any taxes that may at any time be asserted
against the Trustee, the Trust or the Surety Bond Issuer with respect to
the transactions contemplated herein or in the Reimbursement Agreement,
including, without limitation, any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes
(but, in the case of the Trust, not including any taxes asserted with
respect to, and as of the date of, the sale of the Receivables to the
Trust or the issuance and original sale of the Certificates, or asserted
with respect to ownership of the Receivables, or Federal or other income
taxes arising out of distributions on the Certificates) and costs and
expenses in defending against the same.
(iii) The Servicer shall indemnify, defend and hold harmless the
Trustee (which for purposes of this Section 17.2 shall include its
directors, officers, employees and agents), the Trust, and the
Certificateholders from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent that such cost, expense,
loss, claim, damage or liability arose out of, or was imposed upon the
Trustee, the Trust, the Surety Bond Issuer or the Certificateholders
through, the negligence, willful misfeasance or bad faith of the
Servicer in the performance of its duties under the Agreement or the
Reimbursement Agreement or by reason of reckless disregard of its
obligations and duties under the Agreement or the Reimbursement
Agreement.
(iv) The Servicer shall indemnify, defend and hold harmless the
Trustee (which for purposes of this Section 17.2 shall include its
directors,
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officers, employees and agents), from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties,
including any action by the Trustee at the direction of the Servicer
taken pursuant to Section 13.1, herein contained and the trusts and
duties contained in the Reimbursement Agreement, except to the extent
that such cost, expense, loss, claim, damage or liability: (a) shall be
due to the willful misfeasance, bad faith or negligence (except for
errors in judgment) of the Trustee; (b) relates to any tax other than
the taxes with respect to which either the Depositor or the Servicer
shall be required to indemnify the Trustee; (c) shall arise from
Trustee's breach of any of its representation or warranties set forth in
Section 19.8; (d) shall be one as to which the Depositor is required to
indemnify the Trustee; or (e) shall arise out of or be incurred in
connection with the acceptance or performance by the Trustee of the
duties of successor Servicer hereunder unless such cost, expense, loss,
claim, damage or liability was caused by the act or omission of the
predecessor Servicer.
For purposes of this Section 17.2, in the event of the
termination of the rights and obligations of NationsCredit Commercial (or any
successor thereto pursuant to Section 17.3) as Servicer pursuant to Section
18.1, or a resignation by such Servicer pursuant to the Agreement, such Servicer
shall be deemed to be the Servicer pending appointment of a successor Servicer
(other than the Trustee) pursuant to Section 18.2.
Indemnification under this Section 17.2 shall survive
termination of the Agreement and the resignation or removal of the Trustee and
shall include, without limitation, reasonable fees and expenses of counsel and
expenses of litigation. If the Servicer shall have made any indemnity payments
pursuant to this Section 17.2 and the recipient thereafter collects any of such
amounts from others, the recipient shall promptly repay such amounts to the
Servicer, without interest.
SECTION 17.3. Merger or Consolidation of, or Assumption of the
Obligations of the Servicer. Any Person (a) into which the Servicer may be
merged or consolidated, (b) which may result from any merger or consolidation to
which the Servicer shall be a party, or (c) which may succeed to the properties
and assets of the Servicer substantially as a whole, or any Person, more than
50% of the voting stock of which is, directly or indirectly, owned by
NationsBank Corporation, which Person in each of the foregoing cases executed an
agreement of assumption to perform every obligation of the Servicer hereunder
and under the Reimbursement Agreement, shall be the successor to the Servicer
under the Agreement without further act on the part of any of the parties to the
Agreement; provided, however, that (i) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default shall have happened and be
continuing, (ii) the Servicer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
17.3, and (iii) the Servicer shall have delivered to the Trustee an
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Opinion of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Trustee in the Receivables, and reciting the details of such
filings, or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interest. The Servicer shall
provide notice of any merger, consolidation or succession pursuant to this
Section 17.3 to each Rating Agency and the Surety Bond Issuer. Notwithstanding
anything herein to the contrary, the Servicer shall not consummate any
transaction of a type referred to in clauses (a), (b) or (c) above unless at or
prior thereto the foregoing agreement of assumption shall have been executed and
the conditions described in clauses (i), (ii) and (iii) shall have been
satisfied.
SECTION 17.4. Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of the directors or officers or employees or
agents of the Servicer shall be under any liability to the Trust or the
Certificateholders, except as provided under the Agreement, for any action taken
or for refraining from the taking of any action pursuant to the Agreement;
provided, however, that this provision shall not protect the Servicer or any
such person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties under the Agreement. The
Servicer and any director or officer or employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under the Agreement.
(b) Except as provided in the Agreement, the Servicer shall not
be under any obligation to appear in, prosecute, or defend any legal action that
shall not be incidental to its duties to service the Receivables in accordance
with the Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of the Agreement and
the rights and duties of the parties to the Agreement and the interests of the
Certificateholders under the Agreement.
ARTICLE XVIII
Default
SECTION 18.1. Events of Default. (a) If any one of the following
events (each an "Event of Default") shall occur and be continuing:
(i) Any failure by the Servicer to deliver to the Trustee for
distribution to Certificateholders any proceeds or payment required to
be so delivered under the terms of the Certificates and the Agreement
that shall continue unremedied for a period of three Business Days after
written notice from the Trustee is received by the Servicer as specified
in the Agreement or after discovery of such failure by an officer of the
Servicer; or
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(ii) any failure on the part of the Servicer or the Depositor
duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer or the Depositor (as the case
may be) set forth in the Certificates or in the Agreement, which failure
shall (a) materially adversely affects the rights of Certificateholders
as determined by the Holders of Certificates evidencing not less than a
majority of the Certificate Balance and (b) continue unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (1) to
the Servicer or the Depositor (as the case may be), by the Trustee, or
(2) to the Servicer or the Depositor (as the case may be) and to the
Trustee by the Surety Bond Issuer; or
(iii) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator for the Servicer or
the Depositor in any bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities, or similar proceedings, or for the
winding up or liquidation of their respective affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(iv) The consent by the Servicer or the Depositor to the
appointment of a conservator or receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities, or similar proceedings of or relating to the Servicer or
the Depositor or relating to substantially all their property; or the
Servicer or the Depositor shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(v) Any representation or warranty by the Servicer in the
Agreement shall prove to have been incorrect in any material respect
when made, which continues to be incorrect in any material respect for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, or to the Servicer and the Trustee by the
Surety Bond Issuer and as a result of which the interests hereunder of
Certificateholders are materially and adversely affected;
then, and in each and every case, so long as an Event of Default shall not have
been remedied, the Surety Bond Issuer, by notice then given in writing to the
Servicer may terminate all the rights and obligations of the Servicer under the
Agreement (a "Servicer Transfer").
(b) In addition to a Servicer Transfer effected pursuant to
clause (a) of this Section 18.1, the Surety Bond Issuer with notice in writing
to the Servicer, may effect a Servicer Transfer upon the occurrence of any of
the following events: (i) the Depositor or the Servicer, as
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the case may be, shall fail to pay when due any amount payable by it hereunder
or under the Reimbursement Agreement which failure shall have continued for
three (3) Business Days after receipt of notice thereof by the Depositor or the
Servicer, as the case may be; (ii) the Surety Bond Issuer determines that the
performance of the Servicer is not, in the opinion of the Surety Bond Issuer, in
conformity with the Servicing Standards; (iii) if, with respect to any
Distribution Date, the average of the Net Credit Loss Ratio for the three
preceding calendar months exceeds 3.5%; or (iv) any Trigger Event (as defined in
the Reimbursement Agreement).
(c) On or after the receipt by the Servicer of such written
notice which effects a Servicing Transfer, all authority and power of the
Servicer under the Agreement, whether with respect to the Certificates or the
Receivables or otherwise, shall, without further action, pass to and be vested
in the Trustee or such successor Servicer as may be appointed under Section 18.2
pursuant to and under this Section 18.1; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of the Receivables and related
documents, or otherwise. The predecessor Servicer shall cooperate with the
successor Servicer and the Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under the Agreement,
including the transfer to the successor Servicer for administration by it of all
cash amounts that shall at the time be held by the predecessor Servicer for
deposit, or shall thereafter be received with respect to a Receivable. All
reasonable costs and expenses (including attorneys' fees and disbursements)
incurred in connection with transferring the Receivable Files to the successor
Servicer and amending the Agreement and the Reimbursement Agreement to reflect
such succession as Servicer pursuant to this Section 18.1 shall be paid by the
predecessor Servicer upon presentation of reasonable documentation of such costs
and expenses.
SECTION 18.2. Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 18.1 or the Servicer's
resignation in accordance with the terms of the Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under the
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(x) the date 45 days from the delivery to the Trustee of written notice of such
resignation (or written confirmation of such notice of resignation) in
accordance with the terms of the Agreement and (y) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and an accompanying Opinion of Counsel. In the event of
the Servicer's resignation or termination hereunder, a successor Servicer
appointed by the Trustee and consented to by the Surety Bond Issuer in writing
which consent shall not be unreasonably withheld or the Trustee (unless it is
unwilling or legally unable to do so) will succeed to all the responsibilities,
duties and liabilities of the Servicer under the Agreement and will be entitled
to similar compensation arrangements. The successor Servicer shall accept its
appointment by a written assumption in form acceptable to the Trustee and the
Surety Bond Issuer. Notwithstanding the above, the
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Trustee, if it is unwilling or unable so to act, shall appoint or petition a
court of competent jurisdiction to appoint, an established institution, having a
net worth of at least $50,000,000 and whose regular business shall include the
servicing of marine retail installment sale contracts, as the successor to the
Servicer under the Agreement.
(b) Upon appointment, the successor Servicer shall be the
successor in all respects to the predecessor Servicer and shall be subject to
all the responsibilities, duties and liabilities arising thereafter relating
thereto placed on the predecessor Servicer, and shall be entitled to the
Servicing Fee and other fees payable to the Servicer pursuant to Section 13.8
hereof, and all the rights granted to the predecessor Servicer, by the terms and
provisions of the Agreement. No such appointment shall make the successor
Servicer responsible for any liabilities of the predecessor Servicer incurred
prior to such appointment or for any acts, omissions or misrepresentations of
such predecessor Servicer.
(c) In connection with such appointment, the Trustee may, with
the consent of the Surety Bond Issuer, make such arrangements for the
compensation of such successor Servicer out of payments on Receivables as it and
such successor Servicer shall negotiate on an arms-length basis, but in no event
shall the Servicing Fee Rate be greater than 1.0% per annum.
SECTION 18.3. Notification to Certificateholders. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article XVIII, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register and to each Rating Agency.
SECTION 18.4. Waiver of Past Defaults. So long as no Surety Bond
Issuer Default shall have occurred and be continuing, the Surety Bond Issuer
may, on behalf of all the Holders of Certificates, waive any default by the
Servicer in the performance of its obligations hereunder and its consequences,
except a default in making any required deposits to or payments from the
Certificate Account in accordance with the Agreement. Upon any such waiver of a
past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of the
Agreement. No such waiver shall impair such Certificateholders' rights or the
Surety Bond Issuer's rights with respect to subsequent defaults.
ARTICLE XIX
The Trustee
SECTION 19.1. Duties of Trustee. (a) The Trustee, both prior to
the occurrence of an Event of Default and after an Event of Default shall have
been cured or waived, shall undertake to perform only such duties as are
specifically set forth in the Agreement. If an Event of Default shall have
occurred and shall not have been cured or waived and, the Trustee has received
notice of such Event of Default pursuant to Section 13.10(b), the Trustee shall
exercise such of the rights and powers vested in it by the Agreement, and shall
use the same degree of
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care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs; provided, however, that if
the Trustee shall assume the duties of the Servicer pursuant to Section 18.2,
the Trustee in performing such duties shall use the degree of skill and
attention customarily exercised by a servicer with respect to comparable
receivables that it services for itself or others. For purposes of this Article
XIX, an Event of Default shall be deemed to have been cured upon the appointment
of a successor Servicer (including the Trustee in such capacity).
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee that shall be specifically required to be furnished
pursuant to any provision of the Agreement, shall examine them to determine
whether they conform to the requirements of the Agreement.
(c) The Trustee shall take and maintain custody of the Schedule
of Receivables included as an exhibit to the Agreement and shall retain all
Servicer's Certificates identifying Receivables that become Purchased
Receivables.
(d) No provision of the Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act (other than errors in judgment) or its own bad faith; provided,
however, that:
(i) Prior to the occurrence of an Event of Default (or in the
case of an Event of Default described in clause (i) of Section 18.1,
before the Trustee has received notice of such Event of Default pursuant
to Section 13.10(b)), and after the curing or waiving of all such Events
of Default that may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions of the
Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as shall be specifically set forth in the
Agreement, no implied covenants or obligations shall be read into the
Agreement against the Trustee and, in the absence of bad faith or
willful misfeasance on the part of the Trustee, the Trustee may
conclusively rely on the truth of the statements and the correctness of
the opinions expressed in any certificates or opinions furnished to the
Trustee and conforming to the requirements of the Agreement;
(ii) The Trustee shall not be liable for an error of judgment
made in good faith by a Trustee Officer, unless it shall be proved that
the Trustee shall have been negligent in ascertaining the pertinent
facts;
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken in good faith in accordance with
the Agreement or at the direction of the Holders of Certificates
evidencing not less than 25% of the Certificate Balance relating to the
time, method and place of continuing any
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proceeding for any remedy available to the Trustee, or relating to the exercise
of any trust power conferred upon the Trustee, under the Agreement;
(iv) The Trustee shall not be charged with knowledge of any
failure by the Servicer to comply with the obligations of the Servicer
referred to in clauses (i) or (ii) of Section 18.1, or of any failure by
the Depositor to comply with the obligations of the Depositor referred
to in clause (ii) of Section 18.1, or of any incorrect representation or
warranty referred to in clause (v) of Section 18.1, unless a Trustee
Officer assigned to the Corporate Trust Office receives written notice
of such failure or incorrectness from the Servicer or the Depositor, as
the case may be, from the Surety Bond Issuer or from the Holders of
Certificates evidencing not less than 25% of the Certificate Balance, it
being understood that knowledge of the Servicer or the Servicer as
custodian is not attributable to the Trustee;
(v) Without limiting the generality of this Section 19.1 or
Section 19.4, the Trustee shall have no duty (i) to see to any
recording, filing or depositing of the Agreement or any agreement
referred to therein or any financing statement or continuation statement
evidencing a security interest in the Receivables or the Boats, or to
see to the maintenance if any such recording or filing or depositing or
to any rerecording, refiling or redepositing of any thereof, (ii) to see
to any insurance of the Boats or Obligors or to effect or maintain any
such insurance, (iii) to see to the payment or discharge of any tax,
assessment or other governmental charge or any Lien or encumbrance of
any kind owing with respect to, assessed or levied against, any part of
the Trust, (iv) to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Trustee pursuant to the
Agreement believed by the Trustee to be genuine and to have been signed
or presented by the proper party or parties, (v) to inspect the Boats at
any time or ascertain or inquire as to the performance or observance of
any of the Depositor's or the Servicer's representations, warranties or
covenants or the Servicer's duties and obligations as Servicer and as
custodian of the Receivable Files under the Agreement, or (vi) to
prepare or make any filings with the Securities and Exchange Commission
with respect to the Trust; and
(vi) The Trustee shall not be deemed to be a fiduciary for the
Surety Bond Issuer in its capacity as such, and the Trustee's sole
responsibility with respect to the Surety Bond Issuer, in its capacity
as such, shall be to perform those duties with respect to the Surety
Bond Issuer as are specifically set forth herein and no implied
covenants shall be read into the Agreement against the Trustee with
respect to the Surety Bond Issuer.
(e) Neither the Trustee nor the Collateral Agent shall be
required to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties
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hereunder, and the Trustee shall have no liability in connection with losses on
Permitted Investments made pursuant to this Agreement or in the exercise of any
of its rights or powers, and none of the provisions contained in the Agreement
shall in any event require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Servicer under the
Agreement except during such time, if any, as the Trustee shall be the successor
to, and be vested with the rights, duties, powers and privileges of, the
Servicer in accordance with the terms of the Agreement.
(f) Notwithstanding anything to the contrary contained herein,
the Collateral Agent shall have the same rights, indemnities and protections
afforded the Trustee.
SECTION 19.2 Trustee's Certificate. On or as soon as practicable
after each Distribution Date on which Receivables shall be assigned to the
Depositor or the Servicer, as applicable, pursuant to Section 19.3, the Trustee
shall execute a Trustee's Certificate, based on the information contained in the
Servicer's Certificate for the related Collection Period, amounts deposited to
the Certificate Account and notices received pursuant to the Agreement,
identifying the Receivables repurchased by the Depositor pursuant to Section
12.2, purchased by the Servicer pursuant to Section 13.7 or 20.2 during such
Collection Period, and shall deliver such Trustee's Certificate, accompanied by
a copy of the Servicer's Certificate for such Collection Period to the Depositor
or the Servicer, as the case may be. The Trustee's Certificate submitted with
respect to such Distribution Date shall operate, as of such Distribution Date,
as an assignment, without recourse, representation or warranty, to the Depositor
or the Servicer, as the case may be, of all the Trustee's right, title and
interest in and to such repurchased Receivable, and all security and documents
relating thereto, such assignment being an assignment outright and not for
security.
SECTION 19.3. Trustee's Assignment of Purchased Receivables.
With respect to all Receivables repurchased by the Depositor pursuant to Section
12.2 or purchased by the Servicer pursuant to Section 13.7 or 20.2, the Trustee
shall by a Trustee's Certificate assign, without recourse, representation or
warranty, to the Depositor or the Servicer (as the case may be) all the
Trustee's right, title and interest in and to such Receivables, and all security
interests and documents relating thereto.
SECTION 19.4. Certain Matters Affecting Trustee. Except as
otherwise provided in Section 19.1:
(i) The Trustee may rely conclusively and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, Servicer's Certificate, certificate of auditors, or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond, or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties.
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(ii) The Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
under the Agreement in good faith and in accordance with such advice or
Opinion of Counsel.
(iii) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by the Agreement, or to institute,
conduct or defend any litigation under the Agreement or in relation to
the Agreement, at the request, order or direction of any of the
Certificateholders pursuant to the provisions of the Agreement, unless
such Certificateholders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities
that may be incurred therein or thereby.
(iv) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by the Agreement.
(v) Prior to the occurrence of an Event of Default (or in the
case of an Event of Default described in clause (i) of Section 18.1,
before the Trustee has received notice of such Event of Default pursuant
to Section 13.10(b)), and after the curing or waiving of all Events of
Default that may have occurred, the Trustee shall not be bound to make
any investigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, or other paper or document, unless
requested in writing so to do by the Surety Bond Issuer or by Holders of
Certificates evidencing not less than 25% of the Certificate Balance;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation shall be, in the opinion of the
Trustee, not assured to the Trustee by the security afforded to it by
the terms of the Agreement, the Trustee may require indemnity
satisfactory to it against such cost, expense or liability as a
condition to so proceeding. The expense of every such examination shall
be paid by the Servicer or, if paid by the Trustee, shall be reimbursed
by the Servicer upon demand. Nothing in this clause (v) shall affect the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors.
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties under the Agreement either directly or
by or through agents or attorneys or a custodian. The Trustee shall not
be responsible for any misconduct or negligence of any such agent or
custodian appointed with due care by it hereunder or of the Servicer in
its capacity as Servicer or custodian.
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(vii) Subsequent to the sale of the Receivables by the Depositor
to the Trustee, on behalf of the Trust, the Trustee shall have no duty
of independent inquiry, except as may be required by Section 19.1, and
the Trustee may rely upon the representations and warranties and
covenants of the Depositor and the Servicer contained in the Agreement
with respect to the Receivables and the Receivable Files.
SECTION 19.5. Trustee Not Liable for Certificates or
Receivables. (a) The recitals contained herein and in the Certificates (other
than the certificate of authentication on the Certificates) shall be taken as
the statements of the Depositor or the Servicer, as the case may be, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee shall
make no representations as to the validity or sufficiency of the Agreement or of
the Certificates (other than the certificate of authentication on the
Certificates), or of any Receivable or related document.
(b) The Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any security interest in any Boat or any Receivable, or the perfection and
priority of such a security interest or the maintenance of any such perfection
and priority, or for or with respect to the efficacy of the Trust or its ability
to generate the payments to be distributed to Certificateholders under the
Agreement, including, without limitation: the existence, condition, location and
ownership of any Boat; the review of any Receivable File; the existence and
enforceability of any physical damage insurance thereon; the existence and
contents of any Receivable or Receivable File or any computer or other record
thereof; the validity of the assignment of any Receivable to the Trust or of any
intervening assignment; the completeness of any Receivable or Receivable File;
the performance or enforcement of any Receivable; the compliance by the
Depositor or the Servicer with any warranty or representation made under the
Agreement or in any related document and the accuracy of any such warranty or
representation prior to the Trustee's receipt of notice or other discovery of
any noncompliance therewith or any breach thereof; any investment of monies by
the Servicer or any loss resulting therefrom; the acts or omissions of the
Depositor, the Servicer or any Obligor; any action of the Servicer taken in the
name of the Trustee; or any action by the Trustee taken at the instruction of
the Servicer; provided, however, that the foregoing shall not relieve the
Trustee of its obligation to perform its duties under the Agreement.
(c) Except with respect to a claim based on the failure of the
Trustee to perform its duties under the Agreement or based on the Trustee's
negligence or willful misconduct, no recourse shall be had for any claim based
on any provision of the Agreement, the Certificates or any Receivable or
assignment thereof against the Trustee in its individual capacity, the Trustee
shall not have any personal obligation, liability or duty whatsoever to any
Certificateholder or any other Person with respect to any such claim, and any
such claim shall be asserted solely against the Trust or any indemnitor who
shall furnish indemnity as provided in the Agreement.
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(d) The Trustee shall not be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Servicer in respect of the Receivables.
(e) Any obligation of the Trustee to give any notice or
statement to any rating agency hereunder shall constitute only a best efforts
obligation and such notice or statement shall be so provided only as a matter of
courtesy and accommodation, the Trustee having no liability to any rating agency
or any other Person for any failure to so provide such notice or statement. The
Depositor hereby certifies to the Trustee that each Rating Agency is rating the
Certificates and that each Rating Agency's address is as set forth in Section
21.5. The Trustee may rely on the accuracy of such certification until it
receives from the Depositor an Officer's Certificate superseding such
certification.
SECTION 19.6. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
and may deal with the Depositor and the Servicer in banking transactions with
the same rights as it would have if it were not Trustee.
SECTION 19.7. Trustee's Fees and Expenses. (a) The Servicer
shall pay to the Trustee, and the Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it and in the execution of the trusts created by the Agreement, and in the
exercise and performance of any of the Trustee's powers and duties under the
Agreement. The Servicer shall pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) incurred or made by the Trustee in
accordance with any provisions of the Agreement except any such expense,
disbursement or advance as may be attributable to its willful misfeasance,
negligence or bad faith.
(b) The Depositor shall indemnify the Trustee (which for
purposes of this subsection (b) shall include its directors, officers, employees
and agents) for, and shall hold it harmless against, any loss, liability or
expense incurred without willful misfeasance, negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the Agreement and the Trust and the trusts created by the Reimbursement
Agreement, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties under the Agreement or the Reimbursement Agreement.
Additionally, the Depositor, pursuant to Section 16.2, and the Servicer,
pursuant to Section 17 .2, respectively, shall indemnify the Trustee with
respect to certain matters, and Certificateholders, pursuant to Section 19.4,
shall upon the circumstances therein set forth, indemnify the Trustee under
certain circumstances. In the event that the Depositor fails to pay the amounts
it is obligated to pay to the Trustee pursuant to this Section 19.7(b), the
Trustee shall be entitled to receive such amounts from the Servicing Fee prior
to the
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payment thereof to the Servicer. The indemnification provided under this Section
19.7 shall survive termination of the Agreement and removal or resignation of
the Trustee.
SECTION 19.8. Representations and Warranties of Trustee. The
Trustee shall make the following representations and warranties on which the
Depositor and Certificateholders shall rely:
(i) The Trustee is a banking corporation duly organized, validly
existing and in good standing under the laws of the State of New York.
(ii) The Trustee has full corporate power, authority and legal
right to execute, deliver and perform its duties and obligations under
the Agreement, and shall have taken all necessary action to authorize
the execution, delivery and performance by it of the Agreement.
(iii) The Agreement shall have been duly executed and delivered
by the Trustee.
SECTION 19.9. Eligibility Requirements for Trustee. The Trustee
under the Agreement shall at all times: be a banking corporation having an
office in the same State as the location of the Corporate Trust Office as
specified in the Agreement; be organized and doing business under the laws of
such State or the United States of America; be authorized under such laws to
exercise corporate trust powers; have a combined capital and surplus of at least
$50,000,000; and be subject to supervision or examination by Federal or State
authorities.
If the Trustee shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section 19.9, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section l9.9, the Trustee shall resign
immediately in the manner and with the effect specified in Section 19.10.
SECTION 19.10. Resignation or Removal of Trustee. (a) The
Trustee and the Collateral Agent may at any time resign and be discharged from
the trusts hereby created by giving not less than 60 days' prior written notice
thereof to the Servicer; provided, however, that any such resignation in either
capacity shall be deemed a resignation as both Trustee and Collateral Agent.
Upon receiving such notice of resignation, the Servicer with the consent of the
Surety Bond Issuer (unless a Surety Bond Issuer Default shall have occurred and
be continuing) shall promptly appoint a successor Trustee and Collateral Agent
by written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and Collateral Agent and one copy to the
successor Trustee and Collateral Agent. If no successor Trustee and Collateral
Agent shall have been so appointed and have accepted appointment within 60 days
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after the giving of such notice of resignation, the resigning Trustee and
Collateral Agent may petition any court of competent jurisdiction for the
appointment of a successor Trustee and Collateral Agent.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 19.9 and shall fail to resign after
written request there for by the Servicer, or if at any time the Trustee shall
be legally unable to act, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Servicer may remove the Trustee and Collateral Agent. If it shall remove the
Trustee and Collateral Agent under the authority of the immediately preceding
sentence, the Servicer shall promptly appoint a successor trustee and collateral
agent acceptable to the Surety Bond Issuer by written instrument, in duplicate,
one copy of which instrument shall be delivered to the Trustee and Collateral
Agent so removed and one copy to the successor Trustee and Collateral Agent.
(c) Any resignation or removal of the Trustee and Collateral
Agent and appointment of a successor Trustee and Collateral Agent pursuant to
any of the provisions of this Section 19.10 shall not become effective until
acceptance of appointment by the successor Trustee pursuant and Collateral Agent
pursuant to Section 19.11 and payment of all fees and expenses owed to the
outgoing Trustee and Collateral Agent. The Servicer shall provide notice of such
resignation or removal of the Trustee to each Rating Agency.
SECTION 19.11. Successor Trustee and Collateral Agent. (a) Any
successor Trustee or Collateral Agent appointed pursuant to Section 19.10 be
approved as both Trustee and Collateral Agent and shall execute, acknowledge and
deliver to the Servicer and to its predecessor Trustee and Collateral Agent an
instrument accepting such appointment under the Agreement, and thereupon the
resignation or removal of the predecessor Trustee and Collateral Agent shall
become effective and such successor Trustee and Collateral Agent, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor under the Agreement, with like
effect as if originally named as Trustee and Collateral Agent. The predecessor
Trustee and Collateral Agent shall deliver to the successor Trustee and
Collateral Agent all documents, statements and monies held by it under the
Agreement; and the Servicer and the predecessor Trustee and Collateral Agent
shall execute and deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and confirming in the
successor Trustee and Collateral Agent all such rights, powers, duties and
obligations.
(b) No successor Trustee and Collateral Agent shall accept
appointment as provided in this Section 19.11, unless at the time of such
acceptance such successor Trustee shall be eligible pursuant to Section 19.9.
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(c) Upon acceptance of appointment by a successor Trustee and
Collateral Agent pursuant to this Section 19.11, the Servicer shall mail notice
of the successor of such Trustee and Collateral Agent under the Agreement to all
Holders of Certificates at their addresses as shown in the Certificate Register.
If the Servicer shall fail to mail such notice within 10 days after acceptance
of appointment by the successor Trustee and Collateral Agent, the successor
Trustee and Collateral Agent shall cause such notice to be mailed at the expense
of the Servicer.
SECTION 19.12. Merger or Consolidation of Trustee. Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 19.9, without the execution or
filing of any instrument or any further act on the part of any of the parties
hereto; anything herein to the contrary notwithstanding.
SECTION 19.13. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of the Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Boat may at the time be located, the Servicer and the
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust, and to vent in such Person, in such capacity
and for the benefit of the Certificateholders, such title to the Trust, or any
part thereof, and, subject to the other provisions of this Section 19.13, such
powers, duties, obligations, rights and trusts as the Servicer and the Trustee
may consider necessary or desirable. If the Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in the case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee under the Agreement shall be required to meet the terms of
eligibility as a successor trustee pursuant to Section 19.9 and no notice of a
successor trustee pursuant to Section 19.11 and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required
pursuant to Section 19.11.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee under the
Agreement or as successor to the Servicer under the Agreement), the
Trustee shall be incompetent or unqualified to perform such act
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or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) No trustee under the Agreement shall be personally liable
by reason of any act or omission of any other trustee under the
Agreement; and
(iii) The Servicer and the Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to the Agreement and
the conditions of this Article XIX. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trusts or separately, as may be provided therein, subject to all the provisions
of the Agreement, specifically including every provision of the Agreement
relating to the conduct of, affecting the liability of, or affording protection
to the Trustee. Each such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time appoint
the Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of the
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall become incapable of acting, resign or be removed, all its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee. Notwithstanding anything to the contrary in the Agreement,
the appointment of any separate trustee or co-trustee shall not relieve the
Trustee of its obligations and duties hereunder.
ARTICLE XX
Termination
SECTION 20.1. Termination of the Trust. (a) The respective
obligations and responsibilities of the Depositor, the Servicer, the Trustee and
the Trust created hereby shall terminate upon (i) the payment in full or other
liquidation of the last Receivable and the disposition of any amounts received
upon liquidation of any remaining Receivables, including Defaulted Receivables,
(ii) the payment to the Certificateholders of all amounts required to be paid to
them pursuant to the Agreement and the payment to the Surety Bond Issuer of all
amounts required to be paid to it pursuant to the Agreement and the
Reimbursement Agreement and disposition of all property held by the Trust or
(iii) the purchase as of the last day of any Collection Period by the Servicer
at its option, pursuant to Section 20.2, of the corpus of the
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Trust; provided, however, that in no event shall the trust created by the
Agreement continue beyond the expiration of 21 years from the date hereof. The
Servicer shall promptly notify the Trustee of any prospective termination
pursuant to this Section 20.1.
(b) Notice of any termination, specifying the Distribution Date
upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final distribution and cancellation, shall be given
promptly by the Trustee by letter to Certificateholders mailed not earlier than
the 15th day and not later than the 25th day of the month next preceding the
specified Distribution Date stating (A) the Distribution Date upon which final
payment of the Certificates shall be made upon presentation and surrender of the
Certificates at the office of the Trustee therein designated, (B) the amount of
any such final payment, and (C) if applicable, that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Trustee
therein specified. The Trustee shall give such notice to the Certificate
Registrar (if other than the Trustee) at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders amounts
distributable on such Distribution Date pursuant to Section 14.5.
(c) In the event that all the Certificateholders shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets that shall remain
subject to the Agreement. Any funds remaining in the Trust after exhaustion of
such remedies shall be distributed by the Trustee upon written direction of the
Servicer delivered to the Trustee to the United Way of Metropolitan Dallas.
As soon as practicable after the Distribution Date specified for
the final distribution or upon such other date upon which all amounts to be paid
to Certificateholders pursuant to the Agreement have been paid, the Trustee
shall deliver a letter to the Surety Bond Issuer in substantially the form of
Exhibit C to the Surety Bond.
SECTION 20.2. Optional Purchase of All Receivables. On the last
day of any Collection Period as of which the Pool Balance shall decline to 5% or
less of the Original Pool Balance, the Servicer shall have the option to
purchase the corpus of the Trust. To exercise such option, the Servicer shall
deposit pursuant to Section 14.4 in the Collection Account an amount equal to
the aggregate Purchase Amount for the Receivables, as of the beginning of the
Collection Period related to such Record Date plus the appraised value of any
other property held by the Trust less the amount of all Collections, any amounts
referred to in clause (ii) of the
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definition of Available Funds, and Liquidation Proceeds received by the Servicer
during such Collection Period, and shall succeed to all interests in and to the
Trust; provided, however, that without the consent of the Surety Bond Issuer the
Servicer may not make any such purchase if, after giving effect to such purchase
and the distributions on the related Distribution Date there would be
outstanding amounts under the Reimbursement Agreement and the Agreement, which
have not been paid to the Surety Bond Issuer.
ARTICLE XXI
Miscellaneous Provisions
SECTION 21.1. Amendment. (a) The Agreement may be amended by the
Depositor, the Servicer and the Trustee, without the consent of the
Certificateholders or the Surety Bond Issuer, to cure any ambiguity, to correct
or supplement any provisions in the Agreement, or to add any other provisions
with respect to matters or questions arising under the Agreement that shall not
be inconsistent with the provisions of the Agreement; provided, however, that
such action will not, in the opinion of counsel satisfactory to the Trustee,
materially and adversely affect the interest of any Certificateholder or the
Surety Bond Issuer.
(b) The Agreement may also be amended by the Depositor, the
Servicer and the Trustee, with the consent of the Surety Bond Issuer and the
Holders of Certificates (which consent of any Holder of a Certificate given
pursuant to this Section 21.1 or pursuant to any other provision of the
Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate and of any Certificate issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Certificate) evidencing not less than 51% of the
Certificate Balance as of the most recent Record Date, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Agreement, or of modifying in any manner the rights of the
Certificateholders or the Surety Bond Issuer; provided, however, that no such
amendment may (i) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, Collections of payments on Receivables or distributions
that are required to be made on any Certificate, or (ii) reduce the aforesaid
percentage required to consent to any such amendment, in each case without the
consent of the holders of all Certificates then outstanding.
(c) Prior to the execution of any such amendment or consent, the
Servicer shall furnish written notification of the substance of such amendment
or consent to each Rating Agency. Promptly after the execution of any such
amendment or consent, the Trustee shall forward such written notification
provided to the Trustee by the Servicer of the substance of such amendment or
consent to each Certificateholder.
(d) It shall not be necessary for the consent of
Certificateholders pursuant to this Section 21.1 to approve the particular form
of any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization of the execution thereof by Certificateholders
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shall be subject to such reasonable requirements as the Trustee may prescribe,
including the establishment of record dates pursuant to the Depository
Agreement.
(e) Prior to the execution of any amendment to the Agreement,
the Trustee shall be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by the
Agreement and the Opinion of Counsel referred to in Section 21.2(h)(i)(1). The
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Trustees own rights, duties or immunities under the Agreement or
otherwise.
(f) The provisions combined in clauses (a) and (b) of this
Section 21.1 shall not apply to an amendment to the definition of "Specified
Reserve Account Requirement."
SECTION 21.2. Protection of Title to Trust. (a) The Depositor
shall execute and file such financing statements and cause to be executed and
filed such continuation statements, all in such manner and in such places as may
be required by law fully to preserve, maintain and protect the interest of the
Certificateholders and the Trustee in the Receivables and in the proceeds
thereof. The Depositor shall deliver (or cause to be delivered) to the Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Depositor nor the Servicer shall change its
name, identity or corporate structure in any manner that would, could or might
make any financing statement or continuation statement filed by the Depositor in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Trustee at least 30
days' prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Depositor and the Servicer shall give the Trustee at
least 30 days' prior written notice of any relocation of its principal executive
office if, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement, and shall promptly
file any such amendment. The Servicer shall at all times maintain each office
from which it shall service Receivables, and its principal executive office,
within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
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(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under the Agreement of the Receivables to the
Trustee, the Servicer's master computer records (including any back-up archives)
that refer to a Receivable shall indicate clearly with reference to the
particular grantor trust that such Receivable is owned by the Trustee.
Indication of the Trustee's ownership of a Receivable, on behalf of the Trust,
shall be deleted from or modified on the Servicer's computer systems when, and
only when, the Receivable shall have been paid in full or repurchased.
(f) If at any time the Depositor or the Servicer shall propose
to sell, grant a security interest in, or otherwise transfer any interest in
marine receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Trustee.
(g) The Servicer shall permit the Trustee and its agents at any
time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Trustee,
within five Business Days, a list of all Receivables (by contract number and
name of Obligor) then held as part of the Trust, together with a reconciliation
of such list to the Schedule of Receivables and to each of the Servicer's
Certificates furnished before such request indicating removal of Receivables
from the Trust.
(i) The Servicer shall deliver to the Trustee:
(1) promptly after the execution and delivery of the
Agreement and of each amendment thereto, an Opinion of
Counsel either (a) stating that, in the opinion of such
counsel, all financing statements and continuation statements
have been executed and filed that are necessary fully to
preserve and protect the interest of the Trustee in the
Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details
are given, or (b) stating that, in the opinion of such counsel,
no such action shall be necessary to preserve and protect such
interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more
than three months after the Cutoff Date, an Opinion of Counsel,
dated as of a date during such 90-day period, either (a)
stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the
interest of the Trustee, on behalf of the Trust, in the
Receivables, and reciting the details of such filings or
referring to prior Opinions
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of Counsel in which such details are given, or (b) stating
that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (i)(l) or (i)(2)
above shall specify any action necessary (as of the date of such opinion) to be
taken in the following year to preserve and protect such interest.
(j) The Depositor shall, to the extent required by applicable
law, cause the Certificates to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the Securities Exchange
Act of 1934, as amended, within the time periods specified in such sections, and
shall prepare and make all filings required by such Act with respect to the
Trust.
(k) For the purpose of facilitating the execution of the
Agreement and for other purposes, the Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
SECTION 21.3. Limitation on Rights of Certificateholders. (a)
The death or incapacity of any Certificateholder shall not operate to terminate
the Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties to
the Agreement or any of them.
(b) No Certificateholder shall have any right to vote (except as
provided in Section 21.1 or 18.4) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties to the
Agreement, nor shall anything in the Agreement set forth or contained in the
terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken pursuant to any provision of the Agreement.
(c) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of the Agreement to institute any suit, action
or proceeding in equity or at law upon or under or with respect to the
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates evidencing not less than
25% of the Certificate Balance shall have made written request upon the Trustee
to institute such action, suit or proceeding in its own name as Trustee under
the Agreement and shall have offered to the Trustee such reasonable indemnity as
it may require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustee, for 30 days after its receipt of such
notice, request
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and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding and during such 30-day period no direction
inconsistent with such written request has been given to the Trustee pursuant to
this Section 21.3 or Section 18.4; no one or more Holders of Certificates shall
have any right in any manner whatever by virtue or by availing itself or them
selves of any provisions of the Agreement to affect, disturb or prejudice the
rights of the Holders of any other of the Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right, under the Agreement except in the manner provided in the Agreement and
for the equal, ratable and common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 21.3, each
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 21.4. GOVERNING LAW. THE AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 21.5. Notices. All demands, notices and communications
under the Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, or by overnight courier or telecopied
(with the original followed by mail within 24 hours) and shall be deemed to have
been duly given upon receipt (a) in the case of the Depositor, to the agent for
service as specified in the Agreement, at the following address: NationsCredit
Securitization Corporation, 225 E. John Carpenter Freeway, Irving, Texas 75062,
Telecopy (972) 506-5096, or at such other address as shall be designated by the
Depositor in a written notice to the Trustee, (b) in the case of the Servicer,
to the agent for service as specified in the Agreement, at the following
address: NationsCredit Commercial Corporation of America, 225 E. John Carpenter
Freeway, Irving, Texas 75062, Telecopy (972) 506-5096, or at such other address
as shall be designated by the Servicer in a written notice to the Trustee, (c)
in the case of the Trustee, at the Corporate Trust Office, Telecopy (212)
250-6439 and (d) in the case of the Surety Bond Issuer, at the following
address: Capital Markets Assurance Corporation, 885 Third Avenue, New York, New
York 10022, Attention: Managing Director-Credit Enhancement, Telecopy (212)
755-5462. Any notice required or permitted to be mailed to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in the Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder shall receive such notice. All
communications and copies of all notices and reports from the Trustee or the
Servicer shall be mailed to each Rating Agency at the following addresses:
Moody's Investors Services, Inc.
99 Church Street (4th Floor)
New York, New York 10007
Telephone No.: (212) 553-0300
Telecopy No.: (212) 553-0881
Attention: ABS Monitoring Department
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Standard & Poor's Ratings Services
26 Broadway (l0th Floor)
New York, New York 10004
Telephone No.: (212) 208-8925
Telecopy No.: (212) 208-8208
Attention: Asset-Backed Surveillance Group
SECTION 21.6. Severability of Provisions. If any or more of the
covenants, agreements, provisions or terms of the Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of the Agreement and shall in no way affect the validity or
enforceability of the other provisions of the Agreement or of the Certificates
or the rights of the Holders thereof.
SECTION 21.7. Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 16.3 and 17.3 and as
provided in the provisions of the Agreement concerning the resignation of the
Servicer, the Agreement may not be assigned by the Depositor or the Servicer
without the prior written consent of the Trustee, the Holders of Certificates
evidencing not less than 66% of the Certificate Balance and the Surety Bond
Issuer, provided that the consent of Surety Bond Issuer shall not be
unreasonably withheld.
SECTION 21.8. Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and, upon
authentication thereof by the Trustee pursuant to Section 15.2 or 15.3,
Certificates shall be deemed fully paid.
SECTION 21.9. No Petition. Neither the Trustee nor the Servicer
will not institute against, or join any other Person in instituting against, the
Depositor or the Trust any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, until August 16, 2014.
SECTION 21.10. Surety Bond Issuer as Controlling Party. Each
Certificateholder by purchase of the Certificates held by it acknowledges that
the Trustee on behalf of the Trust, as partial consideration of the issuance of
the Surety Bond, has agreed that the Surety Bond Issuer shall have certain
rights hereunder for so long as no Surety Bond Issuer Default shall have
occurred and be continuing. Notwithstanding anything to the contrary contained
herein, but subject to the last sentence of this Section 21.10, so long as a
Surety Bond Issuer Default has occurred and is continuing, any provision giving
the Surety Bond Issuer the right to direct, appoint or consent to, approve of,
or take any action under this Agreement shall be
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inoperative during the period of such Surety Bond Issuer Default and such right
(other than any rights pursuant to Section 18.1 (b)) shall instead vest in the
Trustee acting at the direction of Certificateholders evidencing in the
aggregate not less than a majority of the Certificate Balance as of the most
recent Record Date. The Surety Bond Issuer may disclaim any of its rights and
powers under this Agreement (but not its duties and obligations under the Surety
Bond or the Reimbursement Agreement) upon delivery of a written notice to the
Trustee. The Surety Bond Issuer may give or withhold any consent hereunder in
its reasonable discretion. In the event that the Servicer substitutes a new
surety bond for the Surety Bond pursuant to Section 14A.4, the new surety bond
issuer shall have all of the rights to direct, appoint or consent to, approve
of, or take any action under this Agreement vested in the Surety Bond Issuer
immediately prior to the occurrence of the downgrading of the Surety Bond Issuer
as set forth in Section 14A.4
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EXHIBIT A
A-1
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EXHIBIT B: FORM OF CERTIFICATE
[Front]
NATIONSCREDIT GRANTOR TRUST 1997-1
NATIONSCREDIT GRANTOR TRUST 1997-1 6.75% MARINE
RECEIVABLE-BACKED CERTIFICATE
evidencing a fractional undivided interest in
the Trust, as defined below, the property of
which includes a pool of retail installment sale
contracts secured by new and used boats, boat
motors and boat trailers, and sold or caused to
be sold to the Trust by NationsCredit
Securitization Corporation.
(This Certificate does not represent an interest
in or obligation of NationsCredit Commercial
Corporation of America, NationsCredit
Securitization Corporation or any affiliate
thereof, except to the extent described below.)
NUMBER CUSIP
FINAL SCHEDULED DISTRIBUTION
DATE: $________________
THIS CERTIFIES THAT _________________is the registered owner of
a $________ dollars nonassessable, fully-paid, fractional undivided interest in
the NationsCredit Grantor Trust 1997-1 (the "Trust") formed by NationsCredit
Securitization Corporation, a Delaware corporation (the "Depositor"). The Trust
was created pursuant to a Pooling and Servicing Agreement, including the
Standard Terms and Conditions of Agreement incorporated by reference therein,
dated as of April 30, 1997 (the "Agreement") among the Depositor, NationsCredit
Commercial Corporation of America, as Servicer, and Bankers Trust Company, as
Trustee (the "Trustee") and as Collateral Agent (the "Collateral Agent"), a
summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Agreement. This Certificate is one of the
duly authorized Certificates designated as "NationsCredit Grantor Trust 1997-1
6.75% Marine Receivable-Backed Certificates" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to time,
the holder of this Certificate by virtue of the acceptance hereof assents and by
which such holder is bound. The property of the
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Trust includes a pool of retail installment sale contracts (the "Receivables")
secured by new and used boats, boat motors and boat trailers ("Boats"), all
payments (other than late fees and certain other amounts) received thereunder,
in the case of Simple Interest Receivables, and due thereunder, in the case of
Precomputed Receivables after April 30, 1997, the interest of the Depositor in
the security interests in the Boats, such amounts as may be held from time to
time in certain trust accounts, the Surety Bond, any property that shall have
secured a Receivable and that shall have been acquired by the Trustee, the
Purchase Agreement, proceeds from claims on physical damage, credit life and
disability insurance policies covering Boats, or the Obligors as the case may
be, the interests of the Depositor in any proceeds from recourse to Dealers on
the Receivables, and the proceeds of all of the foregoing.
Under the Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next Business Day
(the "Distribution Date"), commencing on June 16, 1997, to the person in whose
name this Certificate is registered at the close of business on the Business Day
prior to such Distribution Date (the "Record Date"), such Certificateholder's
fractional undivided interest in the Monthly Interest Payment, any Carry-Over
Monthly Interest, the Monthly Principal Payment and any Carry-Over Monthly
Principal, all as more specifically set forth in the Agreement. On the Final
Scheduled Distribution Date, each Certificateholder shall be entitled to receive
an amount equal to the Monthly Interest Payment and an amount necessary to
reduce the Certificate Balance to zero.
Distributions on this Certificate will be made by the Trustee by
check or money order mailed to the Person entitled thereto without the
presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency maintained for that
purpose by the Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
[Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of CEDE & CO. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
CEDE & CO., has an interest herein.]
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Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not
in its individual capacity has caused this Certificate to be duly executed.
DATED: NATIONSCREDIT GRANTOR
TRUST 1997-1
By: BANKERS TRUST COMPANY,
as Trustee
By: ____________________________
Title:
Authenticated:
BANKERS TRUST COMPANY,
as Trustee
By: ______________________
Title:
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[Reverse]
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the Servicer, the Trustee or any affiliate of any of
them. The Certificates are limited in right of payment 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.
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 Surety Bond Issuer
and without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this 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 the Borough
of Manhattan, The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The Certificates are issuable only as registered
Certificates without coupons in denominations of $1,000 and integral multiples
hereof. As provided in the Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of authorized
denominations evidencing the same aggregate denomination, as requested by the
holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the 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
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 obligations and responsibilities created by the Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Agreement and the disposition of all property held as part of the Trust. The
Servicer may at its option purchase the corpus of the Trust at a price specified
in the Agreement, and such purchase of the Receivables and other property of the
Trust will effect early retirement of the Certificates; however, such right of
purchase is exercisable only as of the last day of a Collection Period as of
which the Pool Balance is equal to or less than 5% of the Original Pool Balance.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
(Please print or typewrite name and address, including postal
zip code, and taxpayer I.D. or Social Security Number of assignee)
the within certificate, and all rights thereunder, hereby irrevocably
constituting and appointing __________________________ Attorney to transfer said
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated: *
Signature Guaranteed:
*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
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EXHIBIT C
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EXHIBIT D
NATIONSCREDIT COMMERCIAL CORPORATION OF AMERICA
MONTHLY SERVICER REPORT
CURRENT DATE:
I. Monthly Principal Payment:
(A) Principal received from Obligors:
(1) Total principal collected $ __________
(2) Percent relating to Unsold Contracts $ __________
(3) Principal owed to Trust $ __________
(B) Purchased Receivables $ __________
(C) Liquidation Proceeds $ __________
II. Principal to Investors:
(A) Principal Balance at beginning of month $ __________
(B) Certificate Factor at beginning of month $ __________
(C) Principal Balance at end of month $ __________
(D) Monthly principal due investors $ __________
(E) Carry-Over Monthly Principal $ __________
III. Monthly Interest Payment:
(A) Principal Balance at beginning of month $ __________
(B) Pass-Through Rate % $ __________
(C) Monthly Interest Payment $ __________
(D) Carry-Over Monthly Interest $ __________
IV. Draw on Reserve Account and Surety Bond:
(A) Total Available Funds equals:
(1) Principal received from Obligors
(or Dealers and insurers on non-Defaulted
Receivables), plus $ __________
(2) Interest received from Obligors, plus $ __________
(3) Cash received from Depositor/Servicer on
Purchased Receivables, plus $ __________
(4) Liquidation Proceeds, plus $ __________
(5) Interest on Collection Account. $ __________
(6) Total Available Funds $
==========
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(B) Total Distributions equal:
(1) Monthly Interest Payment and any
carry-over Monthly Interest Payment $ __________
(2) Monthly Servicing Fee and any carry-over,
plus Monthly Servicing Fee (if
NationsCredit Commercial is not the
Servicer), plus $ __________
(3) Monthly Principal Payment and any
carry-over Monthly Principal Payment. $ __________
(4) Total Distributions $
==========
(C) Total Surplus/(Deficiency) (IV(A)-IV(B)) $ __________
(D) Reserve Account balance $ __________
(E) Reserve Account withdrawal $ __________
(F) Surety Bond demand $ __________
V. Monthly Servicing Fee and any carry-over Monthly Servicing
Fee (if NationsCredit Commercial is the Servicer) $ __________
VI. Reconciliation of Reserve Account:
(A) Beginning Reserve Account balance $ __________
(B) Interest on Reserve Account $ __________
(C) Amounts paid to Reserve Account under
the Pooling and Servicing Agreement $ __________
(D) Reserve Account withdrawal $ __________
(E) Reserve Account prior to release of excess $ __________
(F) Required Reserve Account balance:
(1) As percent of Principal Balance $ __________
(2) Minimum Reserve Account balance $ __________
(3) Required amount $ __________
(G) Release of excess $ __________
(H) Ending Reserve Account balance $ __________
VII. Delinquency/Charge-off Experience:
(A) Principal Balance at end of month $ __________
(B) Number of Units $ __________
(C) Delinquency $ #
30-59 Days $0.00 0
60-89 Days $0.00 0
90+ Days $0.00 0
TOTAL $0.00 0
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(D) As % of EOM Outstanding
(E) Receivables charged-of
during month $0.00 0
(F) Recoveries of Receivables previously charged-off $ __________
(G) Net loss during month $ __________
(H) Annualized monthly net loss rate $ __________
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EXHIBIT E
NATIONSCREDIT COMMERCIAL CORPORATION OF AMERICA
CERTIFICATEHOLDER STATEMENT
A-C (Per $1,000 Initial Balance):
(A) The amount of the Certificateholder's
distribution which constitutes the Monthly
Principal Payment (including any Carry-
Over Monthly Principal).................................. $________
(B) The amount of the Certificateholder's
distribution which constitutes the Monthly
Interest Payment (including any Carry-
Over Monthly Interest)................................... $________
(C) The Certificateholder's pro rata portion of
the Servicing Fee (including any Carry-
Over Monthly Servicing Fee).............................. $________
(D) Certificate Balance as of Record Date.................... $________
(E) Certificate Factor as of Record Date..................... $________
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EXHIBIT F-1
Trustee's Certificate
pursuant to Section 19.3 of
the Pooling and Servicing Agreement
Bankers Trust Company, as trustee (the "Trustee") of the
NationsCredit Grantor Trust 1997-1 created pursuant to the Pooling and Servicing
Agreement (including the Standard Terms and Conditions of Agreement incorporated
by reference therein, the "Agreement") dated as of April 30, 1997, among
NationsCredit Securitization Corporation, as Depositor (the "Depositor"),
NationsCredit Commercial Corporation of America, as Servicer, and the Trustee,
does hereby sell, transfer, assign and otherwise convey to the Depositor,
without recourse, representation or warranty, all the Trustee's right, title and
interest in and to all the Receivables (as defined in the Agreement) identified
in the attached Servicer's Certificate as "Purchased Receivables," which are to
be repurchased by the Depositor pursuant to Section 12.2 of the Agreement and
all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this ________day
of 199_.
-----------------------------------
Title:
F-1-1
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EXHIBIT F-2
Trustee's Certificate
pursuant to Section 19.3 of
the Pooling and Servicing-Agreement
Bankers Trust Company, as trustee (the "Trustee") of the
NationsCredit Grantor Trust 1996-1 created pursuant to the Pooling and Servicing
Agreement (including the Standard Terms and Conditions of Agreement incorporated
by reference therein, the "Agreement") dated as of April 30, 1997, among
NationsCredit Securitization Corporation, as Depositor, NationsCredit Commercial
Corporation of America, as Servicer (the "Servicer"), and the Trustee, does
hereby sell, transfer, assign and otherwise convey to the Servicer, without
recourse, representation or warranty, all the Trustee's right, title and
interest in and to all the Receivables (as defined in the Agreement) identified
in the attached Servicer's Certificate as "Purchased Receivables," which are to
be purchased by the Servicer pursuant to Section 13.7 or Section 20.2 of the
Agreement, and all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this
__________day of 19_.
-----------------------------------
Title:
F-2-1
<PAGE> 1
EXHIBIT 4.2
PURCHASE AGREEMENT
This PURCHASE AGREEMENT is made as of April 30, 1997, by and
between NATIONSCREDIT COMMERCIAL CORPORATION OF AMERICA, a North Carolina
corporation (the "Seller"), having its principal executive office at 3350
Cumberland Circle, N.W., Suite 1000, Atlanta, Georgia 30339 and NATIONSCREDIT
SECURITIZATION CORPORATION, a Delaware corporation (the "Purchaser"), having its
principal executive office at 225 E. John Carpenter Freeway, Irving, Texas
75062-2731.
WHEREAS, in the regular course of its business the Seller has
purchased the Receivables (as hereinafter defined) and the security interests
therein from the Dealer and in turn desires to sell the Receivables and the
security interests therein to the Purchaser pursuant to this Purchase Agreement.
WHEREAS, the Seller and the Purchaser wish to set forth the
terms pursuant to which the Receivables are to be sold by the Seller to the
Purchaser, which Receivables will be transferred by the Purchaser, pursuant to
the Pooling and Servicing Agreement (as hereinafter defined) to the
NationsCredit Grantor Trust 1997-1 to be created thereunder, which Trust will
issue certificates representing fractional undivided interests in such
Receivables and the other property of the Trust (the "Certificates").
NOW, THEREFORE, in consideration of the foregoing, other good
and valuable consideration, and the mutual terms and covenants contained herein,
the parties hereto agree as follows:
<PAGE> 2
ARTICLE I
CERTAIN DEFINITIONS
Terms not defined in this Purchase Agreement shall have the
meaning set forth in Article VI and XI of the Pooling and Servicing Agreement.
As used in this Purchase Agreement, the following terms shall, unless the
context otherwise requires, have the following meanings (such meanings to be
equally applicable to the singular and plural forms of the terms defined):
"Assignment" shall mean the document of assignment attached to
this Purchase Agreement as Exhibit A.
"Capital Contribution" shall mean $5,453,433.77 which will be
contributed to the capital of the Purchaser by the Seller on the Closing Date.
"Closing Date" shall mean May 22, 1997.
"Cutoff Date" shall mean April 30, 1997.
"Pooling and Servicing Agreement" shall mean the Pooling and
Servicing Agreement (including the Standard Terms and Conditions of Agreement
attached thereto) dated as of April 30, 1997 by and among NationsCredit
Commercial Corporation of America as Servicer, the Purchaser as Depositor, and
Bankers Trust Company as Trustee and Collateral Agent.
"Property" shall mean collectively, the Receivables, and all
payments received thereunder, in the case of Simple Interest Receivables, and
all payments due thereunder, in the case of the Precomputed Receivables, in each
case, after the Cutoff Date; the interest of the Seller in the security interest
in the Boats granted by Obligors pursuant to the Receivables; the
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interest of the Seller in any proceeds from claims on any physical damage,
credit life or disability insurance policies covering Boats or Obligors; the
interest of the Seller in any proceeds from recourse to Dealers on Receivables;
and any proceeds of all of the foregoing.
"Prospectus" shall mean the Prospectus, dated May 15, 1997,
relating to the Certificates.
"Purchase Agreement" shall mean this Purchase Agreement and
all amendments hereof and supplements hereto.
"Purchaser" shall mean NationsCredit Securitization
Corporation, a Delaware corporation, its successors and assigns.
"Receivable" shall mean any marine installment sale contract
which shall appear on Exhibit B hereto.
"Receivables Purchase Price" shall mean $26,575,342.66.
"Repurchase Event" shall have the meaning specified in
Section 6.2 hereof.
"Schedule of Receivables" shall mean the list of Receivables
annexed hereto as Exhibit B.
"Seller" shall mean NationsCredit Commercial Corporation of
America, a North Carolina corporation, its successors and assigns.
"Trust" shall mean the NationsCredit Grantor Trust 1997-1.
"UCC" shall mean the Uniform Commercial Code, as in effect
from time to time in the relevant jurisdictions.
"Underwriting Agreement" shall mean the Underwriting
Agreement, dated May 15, 1997 between NationsBanc Capital
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Markets, Inc. as representative of the several underwriters and the Purchaser.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2.1 Purchase and Sale of Receivables.
On the Closing Date, subject to the terms and conditions of
this Purchase Agreement, the Seller agrees to sell to the Purchaser, and the
Purchaser agrees to purchase from the Seller, the Property.
(a) Transfer of Receivables. On the Closing Date and
simultaneously with the transactions pursuant to the Pooling and Servicing
Agreement, the Seller shall sell, transfer, assign and otherwise convey to the
Purchaser, without recourse, all of its right, title and interest in and to the
Property.
The Seller intends that the assignment and transfer herein
contemplated constitute a sale of the Receivables, conveying good title thereto
free and clear of any liens and encumbrances, from the Seller to the Purchaser
and that such property not be part of the Seller's estate or property of the
Seller in the event of any insolvency by the Seller, and the Purchaser
acquiesces in such characterization. In the event that such conveyance is deemed
to be, or to be made as security for, a loan, the Seller hereby grants to the
Purchaser a first priority perfected security interest in all of the Seller's
right, title and interest in and to the Receivables, and this Purchase Agreement
shall constitute a security agreement under applicable law.
(b) Receivables Purchase Price. In consideration for the
Property, the Purchaser shall, on the Closing Date, pay
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to the Seller the Receivables Purchase Price. The amount paid to the Seller
shall be in immediately available funds but shall be reduced by the Capital
Contribution.
2.2 The Closing. The sale and purchase of the Receivables
shall take place at a closing (the "Closing") at the offices of Stroock &
Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038 on the Closing
Date, simultaneously with the closing under the Pooling and Servicing Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Warranties of The Purchaser. The Purchaser hereby
represents and warrants to the Seller as of the date hereof and as of the
Closing Date:
(a) Organization and Good Standing. The Purchaser shall
have been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties shall be
currently owned and such business is presently conducted, and has at all
relevant times, and shall have, power, authority and legal right to acquire, own
and sell the Receivables.
(b) Due Qualification. The Purchaser shall be duly
qualified to do business as a foreign corporation in good standing, and shall
have obtained all necessary licenses and approvals, in all jurisdictions in
which the ownership or lease of property or the conduct of its business shall
require such qualifications.
(c) Power and Authority. The Purchaser shall have the
power and authority to execute and deliver this Purchase
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Agreement and to carry out its terms; the Purchaser has full power and authority
to sell and assign the Property to be sold and assigned to the Trustee as part
of the Trust and shall have authorized such sale and assignment to the Trustee
by all necessary corporate action and the execution, delivery and performance of
this Purchase Agreement shall have been duly authorized by the Purchaser by all
necessary corporate action.
(d) Valid Sale; Binding Obligations. This Purchase
Agreement shall evidence (A) a valid sale, transfer and assignment of the
Receivables, enforceable against creditors of and purchasers from the Purchaser,
and (B) a legal, valid and binding obligation of the Purchaser enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance and similar laws relating to creditors'
rights generally and subject to general principles of equity.
(e) No Violation. The consummation of the transactions
contemplated by this Purchase Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time or both) a default
under, the articles of incorporation or by-laws of the Purchaser, or any
indenture, agreement or other instrument to which the Purchaser is a party or by
which it shall be bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than the Pooling and Servicing Agreement),
nor violate any law, any order, rule or regulation applicable to the Purchaser
of any court or of any Federal or State regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Purchaser or
its properties.
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(f) No Proceedings. There are no proceedings or
investigations pending, or threatened, before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Purchaser or its properties: (A) asserting the invalidity of this
Purchase Agreement; (B) seeking to prevent the consummation of any of the
transactions contemplated by this Purchase Agreement; or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Purchaser of its obligations under, or the validity or
enforceability of, this Purchase Agreement.
(g) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery by the Purchaser
of this Purchase Agreement, the performance by the Purchaser of the transactions
contemplated by this Purchase Agreement, and the fulfillment by the Purchaser of
the terms hereof, have been obtained.
3.2 Representations and Warranties of the Seller. (a) The
Seller hereto represents and warrants to the Purchaser as of the date hereof and
as of the Closing Date:
(i) Organization and Good Standing. The Seller has
been duly organized and is validly existing as a corporation
in good standing under the laws of the State of North
Carolina, with power and authority to own its properties and
to conduct its business as such properties are currently owned
and such business is presently conducted, and has at all
relevant times, and shall have, power, authority and legal
right to acquire, own and sell the Receivables. The Seller's
principal place of business as of the Closing Date is in
Georgia.
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(ii) Due Qualification. The Seller is duly qualified
to do business as a foreign corporation in good standing, and
has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or
the conduct of its business requires such qualifications.
(iii) Power and Authority. The Seller has the power
and authority to execute and deliver this Purchase Agreement
and to carry out its terms; the Seller has full power and
authority to sell and assign the Property to the Purchaser and
shall have duly authorized such sale and assignment to the
Purchaser by all necessary corporate action and the execution,
delivery, and performance of this Purchase Agreement has been
duly authorized by the Seller by all necessary corporate
action.
(iv) Valid Sale; Binding Obligations. The sale of the
Receivables by the Seller to the Purchaser constitutes a valid
sale, transfer and assignment of the Receivables, enforceable
against creditors of and purchasers from the Seller, and this
Purchase Agreement shall constitute a legal, valid and binding
obligation of the Seller enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance and similar laws
relating to creditors' rights generally and subject to general
principles of equity.
(v) No violation. The consummation of the
transactions contemplated by this Purchase Agreement and the
fulfillment of the terms hereof does not and will not conflict
with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time or
both) a default under, the articles of
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incorporation or by-laws of the Seller, or any indenture,
agreement, or other instrument to which the Seller is a party
or by which it shall be bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, or other
instrument (other than the Pooling and Servicing Agreement);
nor violate any law or any order, rule, or regulation
applicable to the Seller of any court or of any Federal or
state regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the
Seller or its properties.
(vi) No Proceedings. There are no proceedings or
investigations pending or threatened, before any court,
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or its
properties: (A) asserting the invalidity of this Purchase
Agreement; (B) seeking to prevent the consummation of any of
the transactions contemplated by this Purchase Agreement, or
(C) seeking any determination or ruling that might materially
and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of this
Purchase Agreement.
(vii) All Consents Required. All approvals,
authorizations, consents, orders or other actions of any
Person or of any governmental body or official required in
connection with the execution and delivery by the Seller of
this Purchase Agreement, the performance by the Seller of the
transactions contemplated by this Purchase Agreement, and the
fulfillment by the Seller of the terms hereof, have been
obtained;
(b) The Seller makes the following representations and
warranties as to the Receivables on which the
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Purchaser relies in accepting the Receivables. Such representations and
warranties speak as of the Closing Date, but shall survive the sale, transfer,
and assignment of the Receivables to the Purchaser and the subsequent assignment
and transfer pursuant to the Pooling and Servicing Agreement:
(i) Characteristics of Receivables. Each Receivable
(a) shall have been originated in the United States by a
Dealer for the retail sale of a Boat in the ordinary course of
such Dealer's business, shall have been fully and properly
executed by the parties thereto, shall be denominated in U.S.
dollars, (b) shall have created or shall create a valid,
subsisting and enforceable first priority perfected security
interest in favor of the Seller in the related Boat, which
security interest shall be validly assignable to the
Purchaser, (c) shall contain customary and enforceable
provisions such that the rights and remedies of the holder
thereof shall be adequate for realization against the
collateral of the benefits of the security, (d) shall provide
for level monthly payments (provided that the payment in the
first or last month in the life of the Receivable may be
minimally different from the level payment) that fully
amortize the Amount Financed by maturity and yield interest at
the Annual Percentage Rate, and (e) shall provide for, in the
event that such contract is prepaid, a prepayment that fully
pays the Principal Balance and includes accrued but unpaid
interest due through the date of the prepayment in an amount
at least equal to the Annual Percentage Rate.
(ii) Schedule of Receivables. The information set
forth in Exhibit B to this Purchase Agreement shall be true
and correct in all material respects as of the close of
business on the Cutoff Date, and no
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<PAGE> 11
selection procedures believed to be adverse to the Purchaser
shall have been utilized in selecting the Receivables.
(iii) Compliance with Law. Each Receivable and the
sale of the related Boat shall have complied at the time it
was originated or made, and at the Closing Date shall comply
in all material respects with all requirements of applicable
Federal, State, and local laws, and regulations thereunder,
including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Federal Trade Commission Act, the Fair Credit Billing Act, the
Fair Credit Reporting Act, the Fair Debt Collection Practices
Act, the Magnuson-Moss Warranty Act, the Federal Trade
Commission Credit Practices Rule, State unfair and deceptive
trade practice laws and the State adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code, and any
other applicable consumer credit laws and equal credit
opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable shall
represent the genuine, legal, valid, and binding payment
obligation in writing of the Obligor, enforceable by the
holder thereof in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance and similar laws relating to creditors' rights
generally and subject to general principles of equity.
(v) No Government Obligor. None of the Receivables
shall be due from the United States of America or any State or
local government or from any agency, department, or
instrumentality of the United States of America, any State or
local government.
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<PAGE> 12
(vi) Receivables in Force. No Receivable shall have
been satisfied, subordinated or rescinded, nor shall any Boat
have been released from the security interest granted by the
related Receivable in whole or in part.
(vii) No Waiver. No provision of a Receivable shall
have been waived.
(viii) No Defenses. The Receivables are free and
clear of all security interests, liens, charges, and
encumbrances and to the best knowledge of the Seller, no right
of rescission, setoff, counterclaim, or defense shall have
been asserted or threatened with respect to any Receivable.
(ix) No Liens. No liens or claims shall have been
filed for work, labor, or materials relating to a Boat that
shall be liens prior to, or equal or coordinate with, the
security interest in the Boat granted by the Receivable.
(x) No Default. Except for payment defaults
continuing for a period of less than 60 days as of the Cutoff
Date, no default, breach, violation, or event permitting
acceleration under the terms of any Receivable shall have
occurred and the Seller has not waived and shall not waive any
of the foregoing.
(xi) Insurance. The Obligor has obtained physical
damage insurance covering the Boat and the Obligor is required
under the terms of the Receivable to maintain such insurance.
(xii) Title. It is the intention of the Seller that
the sale and assignment herein contemplated constitute a sale
of the Receivables from the Seller to the
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Purchaser and that the beneficial interest in and title to the
Receivables not be part of the debtor's estate in the event of
the filing of a bankruptcy petition by or against the Seller
under any bankruptcy law. No Receivable has been sold,
transferred, assigned, or pledged by the Seller to any Person
other than the Purchaser. Immediately prior to the sale and
assignment herein contemplated, the Seller had good and
marketable title to each Receivable free and clear of all
Liens, encumbrances, security interests and rights of others
and, immediately upon the sale and assignment contemplated
hereby, the Purchaser shall have good and marketable title to
each Receivable, free and clear of all Liens, encumbrances,
security interests, and rights of others and the sale and
assignment has been perfected under the UCC.
(xiii) Lawful Assignment. No Receivable shall have
been originated in, or shall be subject to the laws of, any
jurisdiction under which the sale, transfer, and assignment of
such Receivable under the Agreement shall be unlawful, void,
or voidable.
(xiv) Security Interest. Upon the Receivables being
conveyed to the Trust pursuant to Section 2.1 of the
Agreement, the Trust shall have a perfected security interest
under the UCC in the Receivables.
(xv) One Original. There shall be in existence one,
and only one, original executed copy of each Receivable.
(xvi) UCC Characterization. Each Receivable
constitutes "chattel paper" under the UCC.
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(xvii) Maximum Balance. No Receivable has a Principal
Balance of greater than $50,000.
(xviii) Original Maturity of Receivables. Each
Receivable shall have an original maturity of not more than
180 months.
(xix) Remaining Maturity of Receivables. As of the
Cutoff Date, each Receivable shall have a remaining maturity
of not more than 180 months.
(xx) Annual Percentage Rate. Each Receivable shall
have a fixed Annual Percentage Rate of not less than 8.246%
and not greater than 21.902%.
(xxi) Ship Mortgage Act. No Boat securing any
Receivable meets the requirements for documentation under the
Ship Mortgage Act.
(xxii) No Default. Except for payment defaults
continuing for a period of less than 60 days as of the Cutoff
Date, no default, breach, violation or event permitting
acceleration under the terms of any Receivable shall have
occurred and neither NationsCredit Commercial nor the
Purchaser shall have waived any of the foregoing.
(xxiii) Location of Receivable Files. The Receivable
Files shall be kept at the offices of NationsCredit Commercial
Corporation at 1000 Holcomb Woods Parkway, Roswell, Georgia
30076 and at 2260 Douglas Boulevard, Suite 100, Roseville,
California 95061.
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<PAGE> 15
(xxiv) No Repossessions. As of the Cutoff Date, no
boat securing any Receivable is in repossession status.
(xxv) No Bankruptcies. As of the Cutoff Date, no
Obligor on a Receivable was noted in the Receivable File as
the subject of any bankruptcy proceeding.
(xxvi) Delinquencies. As of the Cutoff Date, no
Receivable shall have a payment that is 60 or more days
delinquent.
ARTICLE IV
CONDITIONS
4.1 Conditions to Obligation of the Purchaser. The obligation
of the Purchaser to purchase the Receivables is subject to the satisfaction of
the following conditions:
(a) Computer Files Marked. The Seller shall have, at its
own expense, on or prior to the Closing Date, indicated in its computer files
that the Receivables have been sold to the Purchaser pursuant to this Purchase
Agreement and delivered to the Purchaser the Schedule of Receivables certified
by the Chairman, the President, any Vice President, the Treasurer or the
Assistant Treasurer to be true, correct and complete.
(b) Documents to be delivered by the Seller at the
Closing.
(i) The Assignment. At the Closing, the Seller will
execute and deliver to the Purchaser the Assignment. The
Assignment shall be substantially in the form of Exhibit A
hereto.
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<PAGE> 16
(ii) Evidence of UCC Filing. On or prior to the
Closing Date, the Seller shall record and file, at its own
expense, a UCC-1 financing statement in each jurisdiction in
which required by applicable law, executed by the Seller, as
seller or debtor, and naming the Purchaser, as purchaser or
secured party, naming the Receivables and the other Property
as collateral, meeting the requirements of the laws of each
such jurisdiction and in such manner as is necessary to
perfect the sale, transfer, assignment and conveyance of the
Receivables and the Property to the Purchaser. The Seller
shall deliver a file-stamped copy, or other evidence
satisfactory to the Purchaser of such filing, to the Purchaser
on or prior to the Closing Date.
(iii) Other Documents. Such other documents as the
Purchaser may reasonably request.
(c) Other Transactions. The transactions contemplated by
the Pooling and Servicing Agreement shall be consummated on the Closing Date.
4.2 Conditions to Obligation of the Seller. The obligation of
the Seller to sell the Receivables to the Purchaser is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The
representations and warranties of the Purchaser hereunder shall be true and
correct on the Closing Date with the same effect as if then made, and the
Purchaser shall have performed all obligations to be performed by it hereunder
on or prior to the Closing Date.
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<PAGE> 17
(b) Receivables Purchase Price. At the Closing Date, the
Purchaser will deliver to the Seller the Receivables Purchase Price as
provided in Section 2.1(b) hereof.
ARTICLE V
COVENANTS OF THE SELLER
The Seller agrees with the Purchaser as follows, provided,
however, that to the extent that any provision of this ARTICLE V conflicts with
any provision of the Pooling and Servicing Agreement, the Pooling and Servicing
Agreement shall govern:
5.1 Protection of Right, Title and Interest.
(a) Filings. The Seller shall cause all financing
statements and continuation statements and any other necessary documents
covering the right, title and interest of the Purchaser in and to the
Receivables and the other Property to be promptly filed, and at all times to be
kept recorded, registered and filed, all in such manner and in such places as
may be required by law fully to preserve and protect the right, title and
interest of the Purchaser hereunder to the Receivables and the other Property.
The Seller shall deliver to the Purchaser file-stamped copies of, or filing
receipts for any document recorded, registered or filed as provided above, as
soon as available following such recordation, registration or filing. The
Purchaser shall cooperate fully with the Seller in connection with the
obligations set forth above and will execute any and all documents reasonably
requested to fulfill the intent of this Section 5.01(a).
(b) Name Change. Within fifteen days after the Seller
makes any change in its name, identity, principal place of business, chief
executive office or corporate structure which
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would make any financing statement or continuation statement filed in accordance
with paragraph (a) above seriously misleading within the applicable provisions
of the UCC or any title statute, the Seller shall give the Purchaser notice of
any such change and no later than five days after the effective date thereof
shall file such financing statements or amendments as may be necessary to
continue the perfection of the Purchaser's security interest in the Receivables
and the other Property.
(c) Other Actions. The Seller shall cause such additional
actions to be taken as may be required by law to fully preserve and protect the
right, title and interest of the Purchaser hereunder to the Property.
5.2 Other Liens or Interests. Except for the conveyances
hereunder and pursuant to the Pooling and Servicing Agreement, the Seller will
not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on the Property or any interest
therein, and the Seller shall defend the right, title, and interest of the
Purchaser in, to and under the Property (other than the Purchased Receivables)
against all claims of third parties claiming through or under the Seller;
provided, however, that the Seller's obligations under this Section 5.2 shall
terminate upon the termination of the Trust pursuant to the Pooling and
Servicing Agreement.
5.3 Chief Executive Office. During the term of the
Receivables, the Seller will maintain its chief executive office in the United
States, except for Colorado, Kansas, Louisiana, New Mexico, Oklahoma, Utah,
Vermont or Wyoming.
5.4 Costs and Expenses. The Seller agrees to pay all costs and
disbursements in connection with the perfection, as
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against all third parties, of the Purchaser's right, title and interest in and
to the Receivables.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Obligations of Seller. The obligations of the Seller under
this Purchase Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable.
6.2 Repurchase Events. The Seller hereby covenants and agrees
with the Purchaser for the benefit of the Purchaser, the Trustee, the
Certificateholders and the Surety Bond Issuer, that a breach of any of the
Seller's representations and warranties contained in Section 3.2(b) hereof,
which as a result of such breach would materially and adversely affect the
interests of the Purchaser, the Certificateholders, the Surety Bond Issuer,
unless such breach shall have been cured by the second Record Date following the
discovery thereof (or at the Seller's option the first Record Date following
discovery), shall constitute an event obligating the Seller to repurchase
Receivables hereunder (a "Repurchase Event"), at the Purchase Amount from the
Purchaser or from the Trust. The Purchase Amount shall be paid in the manner
specified in Section 14.4(a) of the Pooling and Servicing Agreement on the
Deposit Date. The repurchase obligation of the Seller shall constitute the sole
remedy to the Certificateholders, the Trustee, the Surety Bond Issuer, or the
Purchaser against the Seller with respect to any Repurchase Event.
6.3 Seller's Assignment of Purchased Receivables. With respect
to all Receivables repurchased by the Seller pursuant to this Purchase
Agreement, the Purchaser shall assign,
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without recourse, representation or warranty, to the Seller all the Purchaser's
right, title and interest in and to such Receivables, and all Property and
documents relating thereto.
6.4 Trust. The Seller acknowledges that the Purchaser will,
pursuant to the Pooling and Servicing Agreement, sell the Property to the Trust
on the Closing Date and assign its rights under this Purchase Agreement to the
Trustee for the benefit of the Certificateholders and the Surety Bond Issuer and
that the representations and warranties contained in this Purchase Agreement and
the rights of the Purchaser under Sections 6.2 and 6.3 hereof are intended to
benefit such Trust, the Certificateholder and the Surety Bond Issuer. The Seller
hereby consents to such sale and assignment and the right of the Trustee to
enforce directly the obligations of the Seller hereunder.
6.5 Amendment. This Purchase Agreement may be amended from
time to time by a written amendment duly executed and delivered by the Seller
and the Purchaser; provided, however, that any such amendment that materially
adversely affects the rights of the Certificateholders or the Surety Bond Issuer
under the Pooling and Servicing Agreement must be consented to by the Surety
Bond Issuer and the Holders of Certificates evidencing not less than 51% of the
Pool Balance.
6.6 Waivers. No failure or delay on the part of the Purchaser
in exercising any power, right or remedy under this Purchase Agreement or the
Assignment shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other or further
exercise thereof or the exercise of any other power, right or remedy.
6.7 Notices. All communications and notices pursuant hereto to
either party shall be in writing and addressed or delivered to it at its address
shown in the opening paragraph of
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this Purchase Agreement or at such other address as may be designated by it by
notice to the other party and, if mailed, shall be deemed given when mailed.
6.8 Costs and Expenses. The Seller will pay all expenses
incident to the performance of its obligations under this Purchase Agreement and
the Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Purchaser, including reasonable fees and expenses of counsel, in connection with
the perfection as against third parties of the Purchaser's right, title and
interest in and to the Receivables and the enforcement of any obligation of the
Seller hereunder.
6.9 Representations to the Seller. The respective agreements,
representations, warranties and other statements by the Seller and the Purchaser
set forth in or made pursuant to this Purchase Agreement shall remain in full
force and effect and will survive the Closing under Section 2.02 hereof.
6.10 Confidential Information. The Purchaser agrees that it
will neither use nor disclose to any person the names and addresses of the
Obligors, except in connection with the enforcement of the Purchaser's rights
hereunder, under the Receivables, under any Pooling and Servicing Agreement or
as required by law.
6.11 Headings and Cross-References. The various headings in
this Purchase Agreement are included for convenience only and shall not affect
the meaning or interpretation of any provision of this Purchase Agreement.
References in this Purchase Agreement to Section names or numbers are to such
Sections of this Purchase Agreement.
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<PAGE> 22
6.12 Governing Law. THIS PURCHASE AGREEMENT AND THE ASSIGNMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK.
6.13 Counterparts. This Purchase Agreement may be executed in
two or more counterparts and by different parties on separate counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
6.14 No Petition. The Seller will not institute against, or
join any other person in instituting against, the Purchaser, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, until August
16, 2014.
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<PAGE> 23
IN WITNESS WHEREOF, the parties hereby have caused this
Purchase Agreement to be executed by their respective officers thereunto duly
authorized as of the date and year first above written.
NATIONSCREDIT SECURITIZATION CORPORATION
By: /s/ Lawrence Angelilli
------------------------------
Name: Lawrence Angelilli
Title: Vice President
NATIONSCREDIT COMMERCIAL CORPORATION OF AMERICA
By: /s/ Lawrence Angelilli
------------------------------
Name: Lawrence Angelilli
Title: Vice President
and Treasurer
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<PAGE> 24
EXHIBIT A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement
dated as of April 30, 1997 (the "Purchase Agreement"), between the undersigned
and NationsCredit Securitization Corporation (the "Purchaser"), the undersigned
does hereby sell, assign, transfer and otherwise convey unto the Purchaser,
without recourse (except as provided in the Purchase Agreement) all right, title
and interest of the undersigned in and to the Receivables and all payments
received thereunder, in the case of Receivables which are Simple Interest
Receivables and all payments due thereunder in the case of Receivables which are
Precomputed Receivables, in each case, after the Cutoff Date; the interest of
the Seller in the security interest in the Boats granted by Obligors pursuant to
the Receivables; the interest of the Seller in any proceeds from claims on any
physical damage, credit life or disability insurance policies covering Boats or
Obligors; the interest of the Seller in any proceeds from recourse to Dealers on
Receivables; and any proceeds of all of the foregoing. The foregoing sale does
not constitute and is not intended to result in any assumption by the Purchaser
of any obligation of the undersigned to the Obligors, insurers or any other
person in connection with the Receivables, Receivable 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 on the part of the undersigned
contained in the Purchase Agreement and is to be governed by the Purchase
Agreement.
<PAGE> 25
Capitalized terms used herein and not otherwise defined shall
have the meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment
to be duly executed as of April 30, 1997.
NATIONSCREDIT COMMERCIAL
CORPORATION OF AMERICA
By:
---------------------------
Title:
--------------------
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Exhibit B
Schedule of Receivables
delivered to Trustee
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<PAGE> 27
Schedule A
Location of Receivable Files
NationsCredit Commercial Corporation
1000 Holcomb Woods Parkway
Roswell, Georgia 30076
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<PAGE> 1
EXHIBIT 4.3
This ASSIGNMENT AGREEMENT, dated as of April 30, 1997, is made between
NATIONSCREDIT MARINE FUNDING CORPORATION, a Delaware corporation ("NCMF") and
BANKERS TRUST COMPANY, as Trustee of the NationsCredit Grantor Trust 1997-1 (the
"Trustee").
WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
Capitalized but undefined terms shall have the meanings set forth in
the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of April 30, 1997, among NationsCredit Securitization Corporation, a
Delaware corporation, as Depositor (the "Depositor"), NationsCredit Commercial
Corporation of America, a North Carolina corporation, as Servicer
("NationsCredit Commercial" or the "Servicer"), and Bankers Trust Company, as
Trustee and as Collateral Agent.
SECTION 1. Conveyance of NCMF Receivables. (a) In consideration of the
payment of $154,703,288.72 (the "Purchase Price") on the Closing Date by the
Trustee, on behalf of the Certificateholders and the Surety Bond Issuer, NCMF
does hereby sell, transfer, assign and otherwise convey on the Closing Date to
the Trustee, in trust for the benefit of the Certificateholders and the Surety
Bond Issuer, without recourse:
(i) all right, title and interest of NCMF in and to the NCMF
Receivables and all payments received thereunder, in the case of Simple
Interest Receivables which are NCMF Receivables and due thereunder in
the case of Precomputed Receivables which are NCMF Receivables, in each
case, after the Cutoff Date;
(ii) the interest of NCMF in the security interests in the
Boats related to NCMF Receivables granted by Obligors pursuant to the
NCMF Receivables;
(iii) the right of NCMF pursuant to Section 1.7 of the
Purchase and Sale Agreement to cause NationsCredit Commercial to
repurchase NCMF Receivables from NCMF for breaches of the
representations and warranties contained in paragraphs (h) or (i) of
Exhibit III to the Purchase and Sale Agreement (provided that paragraph
(i) shall be limited to paragraphs (iii), (vi), (xiii) and (xxiii) of
the definition of Eligible Receivable (as such term is defined in the
Purchase and Sale Agreement));
(iv) the interest of NCMF in any proceeds from claims on any
physical damage, credit life or disability insurance policies covering
Boats related to NCMF Receivables or Obligors related to NCMF
Receivables;
<PAGE> 2
(v) the interest of NCMF in any proceeds from recourse to
Dealers on NCMF Receivables; and
(vi) any proceeds of the foregoing.
"NCMF Receivables" means the marine retail installment
contracts listed on Schedule A.
The interests set forth in clauses (i)-(vi) of this Section
1(a) are hereinafter referred to as the "NCMF Interests."
(b) NCMF intends that the assignment and transfer herein contemplated
constitute a sale of the NCMF Receivables, conveying good title thereto free and
clear of any liens and encumbrances, from NCMF to the Trust and that such
property not be part of NCMF's estate or property of NCMF in the event of any
insolvency by NCMF, and the Trustee acquiesces in such characterization. In the
event that such conveyance is deemed to be, or to be made as security for, a
loan, NCMF hereby grants to the Trust a first priority perfected security
interest in all of NCMF's right, title and interest in and to the NCMF
Receivables, and this Assignment Agreement shall constitute a security agreement
under applicable law.
SECTION 2. Deliveries at Closing. On the Closing Date NCMF shall
deliver to the Trustee the following:
(i) A Certificate of Good Standing of NCMF in the State of
Delaware;
(ii) A Secretary's Certificate of NCMF, which has as exhibits
thereto the Certificate of Incorporation and By-laws of NCMF and
resolutions of the Board of Directors of NCMF authorizing the
transactions contemplated by this Assignment Agreement;
(iii) An Officer's Certificate of NCMF relating to the
incumbency of officers of NCMF;
(iv) UCC-1 Financing Statements executed by NCMF with respect
to the grant of the security interest set forth in Section 1(a)(ii) to
be filed with the Secretary of State of the State of Texas; and
(v) An opinion of Counsel with respect to certain corporate
matters of NCMF in form and substance reasonably satisfactory to the
Trustee.
SECTION 3. Representations and Warranties of NCMF. NCMF hereby makes
the following representations and warranties to the Trustee on behalf of the
Certificateholders and the Surety Bond Issuer:
(a) Organization and Good Standing. NCMF has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with
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<PAGE> 3
power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is now conducted, and had at
all relevant times, and shall have, power, authority and legal right to acquire,
own and sell the NCMF Receivables. NCMF's principal place of business as of the
Closing Date is in Texas.
(b) Due Qualification. NCMF is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualifications, licenses or
approvals, except where the lack of such qualifications or approvals would not
have a material adverse effect on the business or properties of NCMF.
(c) Power and Authority. NCMF has the power and authority to execute
and deliver this Assignment Agreement and to carry out its terms; and the
execution, delivery, and performance of this Assignment Agreement has been duly
authorized by NCMF by all necessary corporate action.
(d) Valid Sale; Binding Obligations. The sale, transfer and assignment
of the NCMF Interests by NCMF to the Trust, pursuant to Section 1, constitutes
(a) a valid sale, transfer and assignment of the NCMF Interests, enforceable
against creditors of and purchasers from NCMF and (b) a legal valid and binding
obligation of NCMF enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and
similar laws relating to creditors' rights generally and subject to general
principles of equity.
(e) No violation. The consummation of the transactions contemplated by
this Assignment Agreement and the fulfillment of the terms hereof does not and
will not conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time or both) a default
under, the articles of incorporation or by-laws of NCMF, or any indenture,
agreement, or other instrument to which NCMF is a party or by which it shall be
bound; nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, or other
instrument; nor violate any law or any order, rule, or regulation applicable to
NCMF of any court or of any Federal or state regulatory body, administrative
agency, or other governmental instrumentality having jurisdiction over NCMF or
its properties.
(f) No Proceedings. There are no proceedings or investigations pending
or threatened, before any court, regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over NCMF or its
properties: (A) asserting the invalidity of this Assignment Agreement; (B)
seeking to prevent the consummation of any of the transactions contemplated by
this Assignment Agreement; or (C) seeking any determination or ruling that might
materially and adversely affect the performance by NCMF of its obligations
under, or the validity or enforceability of this Assignment Agreement.
(g) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any governmental body or official
required in connection with
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<PAGE> 4
the execution and delivery by; and NCMF of this Assignment Agreement, the
performance by NCMF of the transactions contemplated by this Assignment
Agreement, and the fulfillment by NCMF of the terms hereof, have been obtained.
(h) Title. It is the intention of NCMF that the sale, transfer and
assignment of the NCMF Interests contemplated by Section 1 constitute a sale,
transfer and assignment of the NCMF Interests from NCMF to the Trust and that
the beneficial interest in and title to the NCMF Interests not be part of the
debtor's estate in the event of the filing of a bankruptcy petition by or
against NCMF under any bankruptcy law. In the event that such sale, transfer and
assignment is deemed to be made as security for a loan, NCMF hereby grants to
the Trustee a first priority security interest in all of NCMF's right title and
interest in and to the NCMF Interests and this Assignment Agreement shall
constitute a security agreement under applicable law. No Interest in any portion
of the NCMF Interests has been sold, transferred, assigned, or pledged by NCMF
to any person other than the Trust. Immediately prior to the sale, transfer and
assignment contemplated by Section 1, NCMF had good and marketable title to each
NCMF Receivable, free and clear of all Liens, encumbrances, security interests
and rights of others; and the sale and assignment has been perfected under the
Uniform Commercial Code in affect in Texas.
SECTION 4. Payment Instructions. The Trustee shall deposit, or cause to
be deposited, the Purchase Price into an account specified by NCMF.
SECTION 5. Governing Law. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SECTION 6. Counterparts. This Assignment Agreement may be executed in
two or more counterparts and by different parties on separate counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
SECTION 7. No Petition. The Trust will not institute against, or join
any other person in instituting against, NCMF, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or other proceeding under any
federal or state bankruptcy or similar law, until August 16, 2014.
SECTION 8. Further Assurances. Consistent with the terms and conditions
hereof, each party hereto will execute and deliver such instruments,
certificates and other documents and take such other action as any party may
reasonably require in order to carry out this Agreement and the transactions
contemplated hereby.
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<PAGE> 5
IN WITNESS WHEREOF, the parties hereby have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized
as of the date and year first above written.
NATIONSCREDIT MARINE FUNDING CORPORATION
By: /s/ Lawrence Angelilli
--------------------------------------
Name: Lawrence Angelilli
Title: Vice President and Treasurer
BANKERS TRUST COMPANY, as Trustee of
NationsCredit Grantor Trust 1997-1
By: /s/ Lillian Peros
--------------------------------------
Name: Lillian Peros
Title: Assistant Vice President
Acknowledged and agreed to:
NationsCredit Commercial Corporation
of America
By: /s/ Lawrence Angelilli
-------------------------------------
Name: Lawrence Angelilli
Title: Vice President and Treasurer
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